The Employment Tribunal (ET) in Lutz v (1) Ryanair DAC and (2) MCG Aviation Ltd held that they were workers.
Facts
Mr Lutz was a first officer on Ryanair’s fleet of Boeing 737s. He had applied to work as a pilot for Ryanair, and when he was successful at interview, he was passed to a company called MCG Aviation Limited (MCG). MCG managed Ryanair's pool of "contracted pilots".
These contracted pilots worked alongside Ryanair’s employed pilots. MCG organised the setting up of a service company, so that Mr Lutz could operate as self-employed. MCG then entered into a five-year fixed-term contract with the service company, under which all work was exclusively for Ryanair, and Mr Lutz "or an agreed acceptable and qualified nominated substitute" would perform the work.
On a preliminary point in a wider claim, Mr Lutz argued that he should be treated as a worker, rather than as self-employed and should not be excluded from the Agency Worker Regulations.
The Law
The distinction between workers and those who are self-employed is not always clear. However, in summary, those who are self-employed can decide when and how they provide their services to customers, and importantly do not have any protection under employment legislation.
In contrast, while a worker may not enjoy the same protections as employees, workers are entitled to certain employment rights, including National Minimum Wage, holiday pay and the right to the statutory minimum length of rest breaks whereas self-employed individuals are not.
Decision
The ET held that Mr Lutz was not a self-employed pilot with Ryanair as a customer of his service company, and decided instead that he was a worker. In reaching this decision, the ET considered a range of facts, including the following:
- Mr Lutz had to pass Ryanair’s competency assessment;
- Mr Lutz wore a Ryanair uniform;
- Mr Lutz was rostered by Ryanair;
- No one could possibly think that Mr Lutz was other than part of the crew of the planes he flew;
- Every part of Mr Lutz’s engagement with Ryanair was structured as Ryanair dictated and Mr Lutz had no say in anything and did what he was told. The ET held this was the polar opposite from running a business.
- Importantly, the ‘right to substitute another’ (a key test in deciding if an individual is self-employed was non-existent and at the very best Mr Lutz was sometimes allowed to change the days he would work, but would have to always pilot the flights he was rostered to – such is the regulatory framework.
The ET therefore held that Mr Lutz was not a self-employed pilot with Ryanair as a customer of his service company, and held instead that he was a worker.
Comment
Sean McEntee, Solicitor in our Employment team comments:
“Earlier this year, the UK Supreme court ruled that uber drivers must be treated as workers rather than self-employed.
“In many aspects, this case is not dissimilar and the comments set out in our previous Prism Article about this (Lindsays | Are Uber taxi drivers workers or self-employed?) remain applicable. It is therefore useful to address them again.
“As stated, when considering whenever an individual is a worker or self-employed, several the below factors need to be considered. This includes:
- Whether a person is required to provide services in person or is allowed to send a substitute;
- If the individual is allowed to determine the number of hours they work, their days of work or how much they are paid to do the work;
- Written evidence such as a contract of employment, payslips or the requirement to comply with company policies;
- Who provides the equipment, specialist tools or uniforms; or
- Degree of power and control when taking instructions and deciding the way in which the work should be done.
