Flying high again… and union recognition September 27, 2013Posted by WorldbyStorm in Economy, The Left.
Reading the story in the Irish Times about Ryanair’s byzantine employment contracts, one is left with only one conclusion. But I’ll come to that in a moment. As to the contracts themselves…
Brookfield Aviation plays a central role in a contract arrangement that a London judge recently described as “not straightforward”.
The system owes its nature to tax law, and the large cases division of the Irish Revenue was consulted at the time it was being devised, according to Liam McNamara, of McNamara & Associates.
“It was known to the Revenue and done with their blessing,” says McNamara, who says his firm is no longer involved in supplying service companies for Ryanair pilots.
One of the key attractions of the system for Ryanair is that it shields it from the obligations created by employment law.
How does this work?
Pilots (are) engaged though English company, Brookfield Aviation International Ltd.
But, pilots aren’t employees of either Ryanair or Brookfield!
A copy of a standard Brookfield contract seen by The Irish Times includes a clause where the signing pilot agrees that he or she is not an employee of Ryanair or Brookfield, and will not at any time be deemed to be an employee.
And it’s even more at arms length than that:
In order to fly for Ryanair, Van Boekel (a ‘Ryanair’ pilot) was asked by Brookfield to choose one firm of accountants from a list of approved Irish accountants and to use a service company provided by the firm he selected for his work with Ryanair.
This arrangement is part of a system that involves pilots being made directors and shareholders in service companies. The affairs of these companies are managed for the pilots by the selected Irish accountancy firm. A number of pilots might be director/ shareholders of the same service company.
Which means that:
The service companies are Irish-registered companies and the pilots are employees of the companies for Irish tax purposes. The service companies have contracts with Brookfield under which their pilots provide services to Ryanair.
And it gets worse, if possible:
All tax and social security payments arising from the pilots’ work for Ryanair are the responsibility of the Irish-registered services companies. If the pilots were engaged by Brookfield or Ryanair on a freelance or sole trader basis, they could be entitled to certain employee rights given that they had only one customer. This is not thought to be the case when they are engaged through the service companies.
[The contract] also stipulates that Brookfield is not an agent of Ryanair and has no power to bind Ryanair in any matter and that, while Brookfield will endeavour to locate work for the pilot, there is no obligation on it to do so.
It also stipulates that the contract can be terminated with the pilot if he or she publishes derogatory statements in writing or on the internet, in public or private chatrooms, about Brookfield or Ryanair.
There’s one main point to all this. The almost crazed complexity of RyanAir’s employment process is directed to one end and one end only, to prevent employees, in this instance pilots, from organising.
What does that suggest? That the key threat, as perceived by RyanAir, is organised employees. That certainly puts all the talk of employee’ associations’, and ‘no need for unions’ both in that and other employments in a different light for those who would take an overly optimistic view of such matters.
And it’s a lesson for all of us who are pushing day in day out for union recognition and expansion of membership. Employers don’t want unions because unions offer employees rights. It’s that simple.
And as seen here they’ll go to almost any length to prevent them from having those rights.
By the way, just for a small insight into how those rights are affected… consider the case of the pilot Van Boekel mentioned above…
Garnett acted for Dutch pilot Van Boekel, who flew for Ryanair between 2009 and 2011 and who successfully contested in the English courts a €5,000 claim for damages for breach of contract which Brookfield brought against him after he gave it three months’ notice.
Three months notice was insufficient? Brookfield refused to accept him It is worth noting that both here and in the UK a contract can impose long periods of notice, how long isn’t specified and I’d like to know does anyone know of particularly unreasonable or excessive time periods. This seems to me another area unions should have looked at very closely, for the scope for problems are self-evident.