| The flight industry is somewhat beleaguered with its staff shortages currently and Ryanair won’t welcome the latest tribunal case against it related to employment status.
In Lutz v Ryan Air , it was ruled that Mr Lutz, a Ryanair Pilot, was in fact a worker of MCG and an agency worker for Ryanair, rather than a self-employed contractor as the parties had intended. As an engaged worker, Mr Lutz had accrued certain employment rights including holiday pay.
This is an important decision for any business who engages individuals via their personal service company as it confirms that worker status can still arise.
Mr Lutz applied to be a pilot for Ryanair and was successful. He was then engaged by MCG who agreed to supply Ryanair with pilots. MCG set up a personal service company in order for Mr Lutz to operate as self-employed. The personal service company then entered into a five-year fixed term contract with MCG under which Mr Lutz was to work exclusively for Ryanair and either Mr Lutz ‘or an agreed acceptable and qualified nominated substitute’ would perform the work. Mr Lutz received no holiday pay under this structure.
The crucial element that the Tribunal needed to establish was, the status of Mr Lutz’ employment. It was held that as both a worker and an agency worker, Mr Lutz was entitled to certain rights such as fair working conditions, a limitation of maximum working hours, and annual leave. The Tribunal held that Mr Lutz was a worker engaged by MCG and an agency worker placed by MCG with Ryanair. He was not self-employed, nor an employee of Ryanair as there was no contact of employment between them.
The tribunal held that in order to be an agency worker, the work provided by the worker must be temporary. The five-year fixed term contract between the service company and MCG was not indefinite and was therefore temporary.
Furthermore, the Tribunal held that Mr Lutz had a contract with MCG to provide his services personally and not via the service company. One important factor towards the personal service test was that Mr Lutz’ ability to swap shifts was not a genuine substitution but merely a rearrangement of the day and time when his personal service was required. There was, in fact, no unconditional right of substitution
The tribunal ruled that any documents purported to show that Mr Lutz was self-employed, and Ryanair was a customer of his personal services, were a sham. Mr Lutz was expected to wear the Ryanair uniform, could not negotiate his pay, and was unable, in practice, to determine his working hours. Ultimately, Mr Lutz had a contract with MCG to provide his services personally to Ryanair and was subject to Ryanair’s framework of control
The flight industry is somewhat beleaguered with its staff shortages currently and Ryanair won’t welcome the latest tribunal case against it related to employment status.
In Lutz v Ryanair , it was ruled that Mr Lutz, a Ryanair Pilot, was in fact a worker of MCG and an agency worker for Ryanair, rather than a self-employed contractor as the parties had intended. As an engaged worker, Mr Lutz had accrued certain employment rights including holiday pay.
This is an important decision for any business who engages individuals via their personal service company as it confirms that worker status can still arise.
Mr Lutz applied to be a pilot for Ryanair and was successful. He was then engaged by MCG who agreed to supply Ryanair with pilots. MCG set up a personal service company in order for Mr Lutz to operate as self-employed. The personal service company then entered into a five-year fixed term contract with MCG under which Mr Lutz was to work exclusively for Ryanair and either Mr Lutz ‘or an agreed acceptable and qualified nominated substitute’ would perform the work. Mr Lutz received no holiday pay under this structure.
The crucial element that the Tribunal needed to establish was, the status of Mr Lutz’ employment. It was held that as both a worker and an agency worker, Mr Lutz was entitled to certain rights such as fair working conditions, a limitation of maximum working hours, and annual leave. The Tribunal held that Mr Lutz was a worker engaged by MCG and an agency worker placed by MCG with Ryanair. He was not self-employed, nor an employee of Ryanair as there was no contact of employment between them.
The tribunal held that in order to be an agency worker, the work provided by the worker must be temporary. The five-year fixed term contract between the service company and MCG was not indefinite and was therefore temporary.
Furthermore, the Tribunal held that Mr Lutz had a contract with MCG to provide his services personally and not via the service company. One important factor towards the personal service test was that Mr Lutz’ ability to swap shifts was not a genuine substitution but merely a rearrangement of the day and time when his personal service was required. There was, in fact, no unconditional right of substitution
The tribunal ruled that any documents purported to show that Mr Lutz was self-employed, and Ryanair was a customer of his personal services, were a sham. Mr Lutz was expected to wear the Ryanair uniform, could not negotiate his pay, and was unable, in practice, to determine his working hours. Ultimately, Mr Lutz had a contract with MCG to provide his services personally to Ryanair and was subject to Ryanair’s framework of control.
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