Ryanair DAC & Anor v Jason Lutz

An individual supplied by an agency to an end user may be employed by the agency for the purposes of the Civil Aviation (Working Time) Regulations 2004, even though the end user receives and directs the services. The essential inquiry is whether the individual is an independent provider or is in a relationship of subordination; formal self-employment is ineffective where independence is merely notional.

For the Agency Workers Regulations 2010, a constrained ability to swap duties does not displace an obligation of personal performance. Regulatory constraints on substitution remain relevant fetters. A supply is temporary where it is fixed-term or otherwise terminable on a specified condition, rather than indefinite. A five-year supply can therefore be temporary, notwithstanding possible successive fixed terms and integration with the hirer’s workforce.

The claimant was a pilot supplied by MCG Aviation Ltd, now Storm Global Ltd, to fly for Ryanair. He brought an annual-leave claim against MCG under the Civil Aviation (Working Time) Regulations 2004 and claims against MCG and Ryanair under the Agency Workers Regulations 2010.

The London (East) Employment Tribunal held that he was a crew member employed by MCG and an agency worker. It found that his service company and written substitution clause were artificial, that he was not in business on his own account, and that his five-year supply was temporary.

Both companies appealed. The central issues were whether the tripartite arrangement created an EU-law employment relationship with MCG, whether the claimant was obliged to perform services personally, and whether a five-year supply was temporary.

1. Appeals dismissed unanimously. The Employment Tribunal made findings capable of supporting each status conclusion, and no material error of law was established.

2. For regulation 2 of the Civil Aviation (Working Time) Regulations 2004, “employed” was agreed to refer to the EU-law employment relationship. Applying Allonby, such a relationship may exist between an individual and an agency which pays remuneration, although an end user receives and directs the individual’s services. The decisive distinction is between a subordinate worker and an independent service provider. The Tribunal’s unchallenged findings that the claimant had no business of his own, possessed no real bargaining power and had merely notional independence supported its conclusion that MCG employed him as crew member.

3. The Tribunal was entitled to find that the claimant’s contract with MCG was to perform work or services personally under regulation 3(1)(b)(ii) of the Agency Workers Regulations 2010. The contractual substitution clause was a sham. In any event, roster swaps were limited to approved Ryanair pilots and were subject to consent and regulatory flight-time restrictions. Those were material fetters. The fact that the fetters arose from safety regulation did not make them irrelevant. Personal performance was the dominant feature of the arrangement.

4. A supply under regulation 3(1)(a) is temporary if it is non-permanent and terminable upon a specified condition, such as expiry of a fixed term. It is contrasted with a supply that is indefinite or open-ended; it need not be short-term or cover another worker. The inquiry concerns the basis on which the individual was supplied on the relevant occasion, not the length of the wider agency–hirer arrangement, workforce integration, or similarity to directly employed workers.

5. The claimant was supplied for a five-year term and could not simply continue beyond it. Any later five-year arrangement was a new supply to be assessed when made. The Tribunal therefore correctly treated the supply as temporary. The regulation 4(2) payroll exception was neither properly raised nor applicable to an agency which supplied individuals under regulation 4(1)(a).

• Employment Appeal Tribunal: Appeals by Ryanair DAC and Storm Global Ltd dismissed: [2023] EAT 146.
• London (East) Employment Tribunal: At a preliminary hearing, held that the claimant was a crew member employed by MCG and an agency worker. Its decision was sent to the parties on 5 April 2022.