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Flying high again… and union recognition September 27, 2013

Posted by WorldbyStorm in Economy, The Left.
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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.

And:

[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.

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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.

Comments»

1. CMK - September 27, 2013

Two initial things to say about this. First, it reminded me of Conor McCabe’s emphasis on the extent to which multinationals being based here is critical to allowing Irish legal and accountancy firms build themselves up through servicing such multinationals with these kinds of arrangements. Secondly, this is the shape of things to come. The unions, as they are currently structured, will not fight outsourcing and will, instead, take the path of least resistance by insisting on flimsy ‘transfer of undertakings’ etc, which won’t be worth a red cent after a few years as companies change ownership etc. In about 20 years time many employees will be ‘contractors’ if employers can get away with it. Actually, a third thought: you’d think an airline would want to cultivate the people its planes? Another reason not to fly Ryanair.

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WorldbyStorm - September 27, 2013

Completely agree. Talking to people about unions at the moment it is clear just how disengaged they are in many places. Not all, and there are honourable exceptions, but some are just going through the motions and aren’t fighting this. In relation to your last point, I refuse point blank to use Ryanair precisely for its labour practices and I’ve got to admit I would think that it would be hard to find a more demotivating approach by any company towards people who work for it.

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workers republic - September 27, 2013

It’s happening already and it was happening during the “boom”, I was working with an instruments tech during the Tiger Years and he was given a choice,Hobsons choice, become “self-employed” ( on a C2) or collect his P45, so, he left. His employer had been a leader of the INLA! ,amazing but that’s what I was told.
I was working with a “contractor” who was employed by an English agency, he was an Irishman with a bogus English address. and actually working for an Irish Company, but that (Irish) company was not paying Employers PRSI, nor was he paying tax to Irish Revenue. We were all being made redundant, but he told me that they the “contractors” would be re-employed after a few weeks. He said he’d get me set-up with the agency if I got an English address. Needless to say, I refused the offer !
As I said before, and I said the same comment at the Desmond Grieves School last week, the IWU fights for workers rights! and the IWW does the same . We need to re-claim the Unions . It’s becoming more urgent day by day!

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2. Enya Rand - September 28, 2013

It’s more and more clear that Trades Unions must become international, and provide the infrastructure for clandestine organising in an outfit like Ryanair.

I doubt that the current Irish trades unions are up to this. I’d love to be proved wrong, however…

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3. Irish Left Review | A Few Referenda Ideas that Just Might Succeed - October 7, 2013

[…] to avoid democratic interventions  (the ever-vigilant WorldbyStorm highlight Ryanair’s byzantine employment contracts to prevent employees from collective bargaining).  However, this threat could be easily dealt […]

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4. Fighting Inequality at Reports from the Economic Front - October 8, 2013

[…] to avoid democratic interventions  (the ever-vigilant WorldbyStorm highlight Ryanair’s byzantine employment contracts to prevent employees from collective bargaining).  However, this threat could be easily dealt […]

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