The Court of Appeal recently ruled on a pivotal case (Lutz v Ryanair and Anor) involving a Ryanair pilot, Jason Lutz, who worked through an intermediary agency (MCG Aviation/Storm Global) and a personal service company (PSC). The decision has significant implications for aviation workers, agencies, Professional Employer Organisations (PEOs), and end-user employers.
Lutz applied for a direct role with Ryanair but was instead hired as a contractor via MCG Aviation, which required him to operate through a PSC.
His five-year tripartite contract stipulated fixed flying hours, no substitution rights, and no holiday pay, while labelling him a “Company Representative” rather than an employee.
After a dispute in 2020, MCG terminated his contract, leading Lutz (supported by the British Airline Pilots’ Association) to file claims:
- Worker status claim against MCG for unpaid holiday pay under aviation working time regulations.
- Agency worker claim against both MCG and Ryanair under the Agency Workers Regulations (AWR), seeking equal treatment with direct employees.
The Court of Appeal ruled that contract labels were irrelevant—what mattered was the actual working relationship. Key findings:
- Lutz was not genuinely self-employed—he was integrated into Ryanair’s operations (wore uniform, followed manuals, adhered to rosters).
- The substitution clause was a “sham” due to overly restrictive terms.
- Despite the five-year contract, the arrangement was deemed “temporary” under AWR, meaning Lutz qualified for equal treatment with Ryanair’s direct employees.
He was classified as a “worker” of MCG Aviation, entitling him to holiday pay.
Courts will assess real working conditions, not just contractual terms.
Intermediaries and PSCs may not shield employers if the worker is controlled and integrated like an employee.
Employers cannot circumvent rights through layered contracts or PSCs.
Businesses using agency labour, PEOs, or PSCs must review employment structures to avoid costly claims. Employers should:
- Audit workforce arrangements: Assess whether contractors are de facto employees.
- Review contracts: Ensure compliance with worker rights and AWR obligations.
This ruling reinforces that employment status depends on reality, not paperwork. Businesses must evaluate working practices to mitigate legal and financial risks—especially in sectors reliant on agency labour or complex contracting structures.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
