Jason Lutz v Ryanair & MCG: What employers can learn from the Court of Appeal’s ruling

Last month, the Court of Appeal handed down its judgment in Jason Lutz v Ryanair DAC & MCG (the former name of Storm Global Ltd). Farrer & Co acted on behalf of Jason Lutz and the British Airline Pilots’ Association in this key case, which provides important clarification for employers in relation to agency workers and their employment status.

Background

Jason Lutz worked as a pilot for Ryanair from 2018 to 2020 under a purported contractor arrangement.

When Mr Lutz applied for the role with Ryanair, he was contacted by Storm Global Ltd (an aviation staffing agency) who informed him of his successful application and explained that he would be working for Ryanair via a personal service company which would be set up for him. Mr Lutz had little to do with this personal service company which was managed by accountants suggested by Storm Global.

Mr Lutz was required to enter into a contract as the “company representative” of the personal service company with Storm Global (the “contractor”) under which he was hired out to work as a pilot for Ryanair (the “hirer”) for a five-year period. This contract stated that Mr Lutz was not an employee or a worker of either Storm Global or Ryanair and that he could send a substitute to work in his stead. Storm Global paid Mr Lutz via his personal service company for his work for Ryanair. Mr Lutz did not receive any holiday pay whilst he was working under this arrangement.

There was also a separate contract between Storm Global and Ryanair under which the former agreed to provide the latter with a supply of pilots in exchange for a fee.

Mr Lutz brought claims for:

1. Unpaid annual leave arguing he was a crew member employed by Storm Global; and

2. The same basic working and employment conditions as directly employed Ryanair pilots on the basis that he was an agency worker.

The legal framework

The two key pieces of legislation central to the case were:

• The Agency Workers Regulations 2010 (AWR).

• The Civil Aviation (Working Time) Regulations 2004 (CAWTR). This is broadly analogous to the Working Time Directive but specifically applies to those working in civil aviation.
Under the AWR, agency workers are entitled to receive the same basic working and employment conditions. including pay, as directly employed staff after 12 weeks of working for a hirer. An "agency worker" for the purposes of the AWR is an individual supplied by a temporary work agency to work "temporarily" for and under the supervision and direction of a hirer. Therefore, a key question which the Court of Appeal had to decide in the case was whether Mr Lutz’s five-year contract to work for Ryanair was temporary or not.

Under the CAWTR, crew members are entitled to annual leave. "Crew member" means a person "employed" to act as a member of the cabin crew or flight crew on board a civil aircraft by an undertaking established in the United Kingdom. The Court therefore had to consider the employment status of Mr Lutz and a key question was whether he could be employed by Storm Global whilst he was under the day-to-day control of Ryanair.
Earlier in proceedings, the Employment Tribunal had found that the substitution clause in the contract was a sham and that the personal service company which Mr Lutz was “installed” into was a fiction. These findings were not challenged on appeal.

The Court of Appeal’s decision

The Court of Appeal dismissed Ryanair and Storm Global’s appeals.

Firstly, the Court held that Mr Lutz was an “agency worker” under the AWR, supplied by Storm Global to work “temporarily” for Ryanair, despite the five-year term. The Court clarified that “temporary” means finite in duration, not necessarily short-term.

Secondly, the Court confirmed that Mr Lutz was a “crew member” under the CAWTR employed by MCG and entitled to paid annual leave. Even though Ryanair was responsible for the direction and control of Mr Lutz on a day-to-day basis, this was expected in a tri-partite agency relationship and did not undermine the fact that there was an employment relationship between Mr Lutz and Storm Global.

Practical takeaways for employers

This case provides important clarity for businesses who rely on the services of agency workers and other individuals supplied to work for them by other companies on a temporary basis. Key points are that:

• “Temporary” does not mean short term when it comes to assessing whether or not an individual is an agency worker. Even multi-year contracts can qualify as temporary under the AWR, triggering the various rights and obligations under those regulations.

• This decision confirms the wide and protective scope of the concept of worker status even in tripartite relationships. Where an individual is supplied by a business to work for another business, this does not necessarily mean the supplier is not the employer because the hirer has day-to-day control over the individual.

• Contractual terms matter but so does reality. Courts will have regard to the written agreement but crucially will look at how the relationship operates in practice. This means that employers cannot safely rely on contractual terms which state an individual is not an employee/worker/agency worker.

• The existence of a personal service company will be irrelevant to the legal analysis of the employment relationship if it is found to be a fiction.

In light of the Court’s decision, businesses operating a model which utilises the services of agency workers and/or other individuals supplied to work for them by other companies should consider undertaking an audit of their arrangements.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2025