The recent Court of Appeal ruling in Lutz v Ryanair DAC [2025] EWCA Civ 849 considered whether a pilot, supplied to Ryanair through a service company, could bring claims for holiday pay under the Civil Aviation (Working Time) Regulations 2004 (CAWTR) and compensation under the Agency Workers Regulations 2010 (AWR).
Facts
In 2011, MCG Aviation Ltd (MCG, an aviation recruitment company) entered into an agreement with Ryanair DAC (Ryanair) to supply “contracted pilots” via service companies to work alongside Ryanair’s directly employed pilots (the MCG Agreement). The MCG Agreement stated that pilots supplied by MCG would not, at any stage, be employed by Ryanair.
The Claimant, Mr Lutz, was engaged by MCG to provide pilot services to Ryanair via the service company Dishford Port Ltd (Dishford). Dishford was set up by an accountancy firm arranged by MCG. Under an agreement dated 26 April 2018, Dishford was retained as an “independent consultant” for a fixed five-year term to supply Mr Lutz’s services (the Services Agreement). This agreement expressly stated that he was not an officer, agent, employee, or servant of MCG or Ryanair, and included a substitution clause.
In practice, Mr Lutz worked as an integrated member of Ryanair’s pilot workforce: wearing its uniform, operating from a Ryanair base, working on a roster set by Ryanair and booking leave through Ryanair.
The Claims
Following MCG’s termination of the Services Agreement in January 2020, Mr Lutz brought claims for:
- Holiday pay under CAWTR against MCG; and
- Entitlement to the same basic working and employment conditions as if he had been directly employed by Ryanair under the AWR, against MCG and Ryanair.
In order to bring these claims, Mr Lutz needed to be (1) a crew member (i.e. a person “employed” to act as a member of the cabin or flight crew on board a civil aircraft by an undertaking established in the United Kingdom) under CAWTR and (2) an agency worker (i.e. an individual supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer) under AWR.
Both MCG and Ryanair contended that he was self-employed and ineligible to claim under either regime.
The ET and EAT Decisions
A preliminary hearing took place to establish whether Mr Lutz had the required status to bring the claims. The ET concluded that the arrangement through Dishford was a “fiction” and the substitution clause in the Services Agreement was a “sham.” It held that Mr Lutz was employed by MCG as a crew member under CAWTR and was an agency worker under AWR.
On appeal by Ryanair and MCG, the EAT upheld the ET’s decision.
The Court of Appeal Decision
The Court of Appeal dismissed the further appeals by MCG and Ryanair.
In relation to the CAWTR claim, the Court accepted Mr Lutz’s case that MCG was his ’employer’ under the legislation. Relevant factors were that the Services Agreement was between Mr Lutz and MCG, it included express provisions stating he was not employed by Ryanair and there was no contract in place between Mr Lutz and Ryanair. The fact Ryanair directed Mr Lutz’s day-to-day work did not alter this – in tripartite arrangements like this, control can be exercised by the principal [Ryanair] without undermining the employment relationship between the worker [Mr Lutz] and the supplier [MCG].
In relation to the AWR claim, the decision turned on whether Mr Lutz was working “temporarily” for Ryanair. On this, the Court endorsed the interpretation in Moran v Ideal Cleaning Services Ltd [2014] ICR 442 that “temporary” means “not permanent” rather than “short term.” As such, the five-year fixed term of the Services Agreement satisfied the definition. MCG’s practice of renewing contracts after the expiry of the fixed term did not render the arrangement indefinite.
Key Takeaways
This decision indicates that in the context of a tripartite relationship, the concept of worker status has a wide scope and the fact that the principal exercises direction and control is not inconsistent with the individual being a worker of the agency. It is also a reminder of the meaning of “temporarily” in the context of agency workers.
