Ryanair is facing a major legal challenge from 262 former pilots who claim they are owed backdated holiday pay and pension contributions.
The group action, filed in London’s Commercial Court last week, is being led by former Ryanair pilot Richard Phillips alongside 261 fellow aviators.
At the centre of the dispute is the budget airline’s long-standing practice of engaging pilots as contractors through recruitment agencies rather than employing them directly.
The claimants argue the arrangement unlawfully denied them statutory employment rights.
Their legal representatives, Claims Compensation Group, say the pilots should have received holiday pay, pension contributions and other workplace protections throughout their time flying for the Irish airline.
The legal action names Ryanair as well as aviation recruitment agencies Storm Global and Brookfield Aviation International, alongside Dublin-based tax consultancy Scanlon Associates.
The agencies acted as intermediaries, supplying contract pilots to support Ryanair’s permanent workforce.
The Group Chief Executive Officer of Ryanair is Michael O’Leary
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RYANAIR
Under the arrangement, Ryanair maintained it was not responsible for providing holiday pay or sick pay because the pilots were not directly employed by the airline.
The model enabled the low-cost carrier to operate with greater flexibility while avoiding the additional costs associated with full employment status.
However, the legal basis of the contractor model has come under increasing scrutiny in Britain and across Europe in recent years.
A landmark Court of Appeal ruling last year found that pilot Jason Lutz was an employee of Ryanair during his time with the airline rather than a self-employed contractor.
Ryanair sued by 262 pilots over holiday pay and pension claims in London court
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GETTY
The airline’s attempt to appeal the decision to the Supreme Court was later rejected.
Claims Compensation Group, which represents Mr Phillips and the other claimants, said the judgment “closed the door on the agency defence in aviation”.
The firm has also urged pilots who worked for Ryanair or other airlines through recruitment agencies to come forward if they believe they may have been underpaid.
The case builds on the precedent set by the Supreme Court’s 2021 ruling involving Uber, which found that the company’s drivers were workers entitled to fundamental employment rights rather than independent contractors.
Ryanair’s employment practices have also faced legal challenges elsewhere in Europe.
In January, the Berlin-Brandenburg State Social Court ruled that pilots based at the airline’s German hubs were employees who should be subject to social security contributions.
The court described the airline’s corporate structure as a “legal fiction” designed to conceal the true nature of the employment relationship.
The legal action comes at a challenging time for Ryanair as it deals with the economic impact of the conflict in Iran.
Higher jet fuel costs and weaker passenger demand contributed to profits falling by 34 per cent to €593million (£503million) during the April-to-June quarter.
The airline said it had been forced to reduce fares in an effort to boost summer bookings.
Ryanair’s share price has fallen 16.52 per cent since the start of the year.