Ryanair, alongside its long-standing agency partner, Storm Global, has initiated a legal challenge in the Court of Appeal, seeking to overturn earlier rulings by both the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT). These previous decisions found that a former pilot, Jason Lutz, should be classified as worker and agency worker of Storm Global, rather than self-employed, as the companies asserted.

This legal battle holds potentially far-reaching consequences for not only Ryanair and Storm Global but also for the broader gig economy, the aviation sector, and other industries that rely on flexible workforce models. The outcome could reshape how workers and agency workers are classified, with an impact on the rights that they will be able to receive.

Background

Since 2011, Storm Global has been engaged to provide “contract pilots” across Ryanair’s network and has been appointed as the airline’s primary supplier since 2014.The case centres on Jason Lutz, a former Ryanair pilot, who lodged a successful claim in the ET and EAT arguing that his working arrangement constituted him as a worker, rather than being self-employed. Lutz was hired through the employment agency, Storm Global, and was one of many pilots engaged under similar terms.

Despite being technically contracted through a service company, an arrangement often used in freelance or contract work, the Tribunals found that Lutz’s working conditions and obligations aligned more closely with that of a worker.

Key Tribunal Findings

The ET proceedings highlighted several critical factors which undermined the claim that Lutz was truly self-employed:

• Lack of bargaining power – Lutz had no meaningful opportunity to negotiate the terms of his engagement. He was presented with standardised terms, and had little say over working conditions.

• Disingenuous contractual clauses – The contractual structure, particularly around the use of the service company and clauses allowing for substitution, were deemed to be largely artificial. The Tribunals described these clauses as a “fiction” and a “sham”, intended to give the appearance of self-employment where none truly existed.

• Control and exclusivity – Lutz was requited to wear Ryanair’s uniform and operate under Ryanair’s direction and scheduling. These factors strongly indicated that he was integrated into Ryanair’s operation structure.

The EAT concluded that Lutz an individual delivering a personal service under significant control and supervision. As a result, he was entitled to paid annual leave and equal employment conditions under the Agency Worker Regulations.

Ryanair and Storm Global are now challenging the conclusions reached by the Tribunals. They maintain that Lutz was a self-employed contractor, temporarily assigned and free to substitute someone else in his role if needed.

Broader Implications for Employers and the Gig Economy

Although the Court of Appeal’s decision is not expected for several months, its outcome could significantly influence the way companies classify their workforce. If the original rulings are upheld, the case could serve as an example for others working in the gig economy, potentially unlocking claims for rights such a paid leave, pension contributions, and more secure working conditions.

The ruling would also pressure companies, particularly those in highly regulated sectors like aviation to reassess the structures they use to engage workers if the day to day working relationship resembles that of employment. Further, this could drive a shift towards more transparent and fair hiring models, where rights and obligations are aligned with the realities of the role.

The Employment Rights Bill will introduce two new significant protections for zero-hour and low-hour contract workers; the right to be offered guaranteed working hours and the right to reasonable notice of shifts. Following the Government’s amendments to the Bill in March to extend these rights to agency workers, this case takes on heightened importance. It will be even more critical for employers to properly classify who within their workforce qualifies as an agency worker (as opposed to being self-employed) and would be entitled to benefit from these new rights.

For further information, or to discuss the issues raised within this case, please contact us to speak to a member of our Employment Team.