Lutz v Ryanair and Anor

Jason Lutz v Ryanair DAC & Anor [2025] EWCA Civ 849

Facts

Parties Involved

The case involved Jason Lutz (the Claimant/Respondent), who was a contracted pilot, against Ryanair DAC (First Appellant) and Storm Global Ltd (Second Appellant, formerly MCG Aviation Ltd, referred to as MCG).

The Employment Arrangement

From July 2018 to January 2020, Mr Lutz worked as a contracted pilot for Ryanair, flying Boeing 737s. His services were nominally provided through an Irish limited company, Dishford Port Ltd, supposedly owned and controlled by him, but it was accepted that the true relationship was between Mr Lutz and MCG.

The Contractual Terms

The relationship between Ryanair and MCG was governed by a written agreement from 2011 (the "MCG Agreement"), which stated that pilots supplied were not intended to be employed by Ryanair. This agreement aimed to provide Ryanair with flexibility by accessing a pool of pilots without directly employing them.

Mr Lutz's contract with MCG (the "Services Agreement"), signed in April 2018, explicitly designated him as a "Company Representative" whose services were supplied to Ryanair by MCG. It stated he would not be deemed an employee of MCG or Ryanair. The agreement specified a five-year term for his services. It also required him to operate according to Ryanair's manuals and committed MCG to provide a minimum of 450 flying hours per annum after 12 months.

The Practical Operation 

In practice, Mr Lutz was fully integrated into Ryanair's pilot workforce. He wore a Ryanair uniform, had a Ryanair ID card, passed Ryanair competency assessments, and worked from a base set by Ryanair. Ryanair set his rosters, which were on the same basis as employed pilots, and he booked annual leave and swapped shifts with Ryanair. The disciplinary process leading to his termination was also conducted by Ryanair. MCG's role primarily involved payments and formal contractual actions like sending reprimands or the termination letter. Mr Lutz had repeatedly sought direct employment with Ryanair but was refused.

The Termination and Claims

Mr Lutz's contract was terminated by MCG on 13 January 2020. He then brought two claims in the Employment Tribunal (ET) with the support of BALPA:

The Annual Leave Claim

Against MCG, seeking payment for accrued annual leave under the Civil Aviation (Working Time) Regulations 2004 (CAWTR).

The Equal Terms Claim

Against both MCG and Ryanair, seeking compensation for not being afforded the same working conditions as employed pilots, particularly regarding pay and annual leave, under the Agency Workers Regulations 2010 (AWR).

The Previous Rulings

The ET found in Mr Lutz's favour on preliminary employment status issues, holding he was a "crew member" employed by MCG under CAWTR and an "agency worker" under AWR. The Employment Appeal Tribunal (EAT) dismissed appeals from both Ryanair and MCG, upholding the ET's findings. This case was an appeal to the Court of Appeal.

Held

The Court of Appeal dismissed both appeals from MCG and Ryanair, upholding the earlier tribunal decisions.

  • Annual Leave Claim (against MCG)

    • The Court affirmed that Mr Lutz was a "crew member... employed by [MCG]" within the meaning of the CAWTR.

    • It applied the principle from James v London Borough of Greenwich, which states that if a worker's services to a principal can be fully explained by their express contract with an agency, there is no basis to imply a separate employment relationship with the principal.

    • Despite Ryanair's significant direction and control over Mr Lutz's daily work, this was considered typical in tripartite agency arrangements and did not negate the employment relationship with MCG, which was explicitly established by contract. The Court found that MCG's role was more than just a payroll administrator and that the written contract should be taken at face value as it was not a sham.

  • Equal Terms Claim (against MCG and Ryanair)

    • The Court affirmed that Mr Lutz was an "agency worker" as he was supplied by MCG "to work temporarily" for Ryanair under the AWR.

    • Meaning of "Temporarily": The Court agreed with the EAT's interpretation in Moran v Ideal Cleaning Services Ltd that "temporary" in the context of the AWR means "not permanent" or of "finite duration" (e.g., a fixed-term contract), rather than strictly "short-term". The critical distinction is between relationships that are indefinite/open-ended and those that are terminable upon a specific condition like the expiry of a fixed period.

    • Application to Mr Lutz: The express five-year term in Mr Lutz's Services Agreement with MCG was deemed decisive in establishing that his supply to Ryanair was temporary. The fact that new five-year contracts might be issued at expiry, or that Mr Lutz was fully rostered, did not alter the fundamental fixed-term nature of each individual supply or the initial supply agreement.

Comment

This judgment provides significant clarity on the employment status of "contracted pilots" and agency workers in general, especially in complex triangular relationships where an agency supplies workers to an end-user who exerts day-to-day control.

The Reinforcement of Agency as Employer

The decision reinforces that an agency can be the employer for the purposes of specific employment regulations (like CAWTR) even if the end-user exercises a high degree of operational control. The existence of a clear contractual relationship between the worker and the agency, which fully explains the provision of services to the end-user, can be sufficient to establish the employment relationship with the agency.

The Definition of "Temporary" in AWR

Crucially, the case confirms that "temporary" refers to a finite duration rather than merely a short-term engagement under the Agency Workers Regulations. This means that long fixed-term contracts, such as the five-year term in Mr Lutz's case, are considered "temporary" because they have a defined end date, distinguishing them from indefinite, "permanent" employment relationships. This interpretation ensures broader protection for agency workers, aligning with the intent of the underlying EU Directive.

The Wider Relevance

The Court noted that the issues raised by these appeals are of wider relevance to Ryanair’s contracted pilot workforce, with 27 similar claims stayed pending this outcome. This judgment will therefore have substantial implications for the employment rights of other contracted pilots and potentially other workers in similar agency arrangements within the aviation sector and beyond.

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