Facts:
Mr Lutz, a pilot, was supplied to Ryanair by an aviation recruitment agency called MCG Aviation Limited (now known as Storm Global Ltd) (Storm Global).
Storm Global had a contract with Ryanair to supply “contracted pilots”. Storm Global in turn mandated that Mr Lutz must provide his services through a service company called Dishford. There was therefore a secondary contract between Dishford and Storm Global under which Dishford was engaged as an “independent consultant” to supply the services of Mr Lutz, via Storm Global, to Ryanair. Storm Global and Ryanair’s position was that Mr Lutz was therefore not an employee or worker of either of them.
In reality, however, Mr Lutz worked for Ryanair as a fully-integrated part of its pilot workforce. He wore a Ryanair uniform and had a Ryanair ID card. He had to pass Ryanair competency assessments. The base from which he worked was set by Ryanair. Ryanair set the rosters which were “on the same basis” for employed and contracted pilots. He booked his annual leave and time off with Ryanair. He swapped shifts through Ryanair’s “Crew Dock” process. A disciplinary process which ultimatley led to the termination of his assignment was conducted by Ryanair.
Mr Lutz brought a claim for unpaid holiday pay against Storm Global under the Civil Aviation (Working Time) Regulations 2004 (CAWTR), as well as a claim against both the agency and Ryanair for pay parity and equal working conditions compared to directly employed pilots under the Agency Workers Regulations 2010 (AWR). These claims could only succeed if Mr Lutz was deemed to be an employee or worker.
The Law:
Under the AWR, an agency worker is defined as an individual who:
- has a contract with a temporary work agency which is either a contract of employment or a contract to perform work and services personally (meaning individuals who are truly self-employed are excluded); and
- is supplied by the temporary work agency to work temporarily for and under the supervision and direction of a hirer (in this case, Ryanair).
In terms of paid annual leave, this right is only available to workers and employees, with CAWTR containing specific working time regulations relating to aircrew (including pilots).
Decision of the Courts:
Both the Employment Tribunal (ET) and Employment Appeal Tribunal (EAT) found in favour of Mr Lutz, ruling that the service company arrangement through Dishford was a “fiction” and that he was not truly self-employed. The ET and EAT concluded that Mr Lutz was “employed” (within the meaning of the CAWTR) by Storm Global as a crew member under CAWTR, and was an agency worker of Storm Global for the purposes of the AWR.
An appeal was brought by Storm Global and Ryanair in the Court of Appeal.
The appeal concerned the only two remaining “live” issues following the ET and EAT decisions, which were (1) who Mr Lutz’s “employer” was for the purposes of the CAWTR (i.e Storm Global or Ryanair) and (2) whether he had been supplied “temporarily” to Ryanair in relation to the AWR.
First, in relation to the claim brought by Mr Lutz under the CAWTR, the Court of Appeal confirmed the finding of the ET and the EAT that he was a crew member “employed” by Storm Global, entitling him to paid annual leave as a result of his status as a worker.
Storm Global engaged Mr Lutz under a contract, paid him, and supplied him to Ryanair, and was therefore deemed to be the employer for CAWTR purposes, regardless of the fact that Ryanair directed his day-to-day work. The Court of Appeal concluded that there was no need to imply a contract between Mr Lutz and Ryanair, as one already existed between him and Storm Global.
Second, in order to pursue a claim for parity of pay and working conditions pursuant to the AWR, Mr Lutz had to contend with the definition of an agency worker under the AWR being an individual who “is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer”. The central issue here was whether Mr Lutz had been supplied “temporarily”, as the services agreement in place was for a fixed term of 5 years.
Despite the contentions of Ryanair and Strom Global, the Court of Appeal found that a 5-year agreement still constituted a “temporary” supply, despite being long term. The Court clarified that “temporary” and “short term” are not synonymous and that for AWR purposes “temporary” should be interpreted as “not indefinite”. Additionally, whether a supply is temporary is to be judged at the point of contract rather than retrospectively based on length of service (for example, if fixed term arrangements were extended indefinitely).
Comment:
This case highlights the importance of accurately determining employment status in the context of the practical reality of the working conditions. This judgment follows the trend of decisions in recent years to find in favour of worker status.
It is also clear that long term agency arrangements, which are not indefinite, must still comply with the AWR in relation to equal treatment.
It should also be noted that there are 27 claims brought by other Ryanair pilots in similar positions, which had been paused pending the outcome of this case. This decision is therefore unlikely to be a one-off and could have implications not only for Ryanair but the wider aviation industry.
