Mr. Brendan O'Hanlon:

I thank the committee for this opportunity to outline to it the developments in the aviation sector. I do not know whether members think it is unusual that a pilot is in bogus self-employment. Deputy Joan Collins asked what sectors bogus self-employment is growing in. We see it growing in aviation. In one company in particular, Ryanair, more than 50% of the pilots are on self-employment contracts. Senator Nash asked how it impacts on our ability to collectively bargain. It is very obvious that the strategy is designed to keep people in these contracts of employment where they cannot be collectively represented like their colleagues who are employed directly as pilots. This is an attempt to deliberately influence our ability to improve terms and conditions, deal with issues with regard to recognition and enforce the statutory rights the pilots have.

This growing area is not linked only to low-cost carriers. It is a significant issue in the low-cost carriers across the board and there is no doubt about this. Ryanair is not unique. However, it is also in some of the legacy airlines. It will increase when the legacy airlines must start to compete on certain routes and the costs they incur are significantly more than those with bogus self-employment contracts. There is only one way this is going, which is up.

According to a 2015 study by Ghent University in Belgium, one in six pilots throughout Europe was on a bogus self-employment contract. This information was backed up by 2016 research by the London School of Economics. When we look at this trend it is very easy to see that if this is not changed, the airlines with direct employment, which we describe as responsible airlines that are fulfilling their obligations with regard to PRSI, tax and employment law, will have to compete in this area. We will see continual growth of what we are seeing in low-cost airlines. It will creep into some of the larger airlines that have good agreements with trade unions and negotiate. They will ask us quite legitimately what we are doing about it. If we are seen to be doing nothing, they will tell us they are now competing in that field and will have to go down a similar road.

The Irish Air Line Pilots Association made an extremely detailed presentation to the Department in 2013. It focused in particular on Ryanair. It demonstrated the extent to which these organisations are willing to go to create bogus self-employment. I will give an example of how far they are willing to take this to avoid the detection of people being seen as direct employees. It is important to state that in all of these cases where people are on bogus self-employment contracts they are absolutely 100% under the control of the airline. The airline determines what routes they fly, when they fly and when they are available. There are obligations with regard to the maximum number of flying hours a pilot can do per annum, which is 900. Ryanair will recruit somebody in April and max him or her out during the peak period so when that person is let go his or her flying hours have been used up and he or she cannot gain other employment. It is open to Ryanair to do this and it gives it a significant competitive advantage over its competitors.

To focus on the extent some of the companies are willing to go to, Ryanair uses a UK contractor as a hiring agency. I will avoid going into names but the companies in question were mentioned in the submission to the Department in 2013. Ryanair uses two particular companies to do this. They are based in the UK and neither is regulated by the aviation authorities. The pilots become part of a limited company. They set up the pilots in a limited company and an accountant acts as the financial director. Two or three pilots might be in this limited company. Ryanair is not party to the contract. The pilot provides services directly and exclusively to Ryanair and, as such, is totally and absolutely under its control. The nature of the contract means that when Ryanair decides to dispense with the services of the person or the contract comes to an end, that person has no recourse to any employment legislation or protection. Mr. Dooley and Mr. Wall have touched on various employment rights. Pilots in the airline industry do not have any of these protections. When we see this elaborate set-up to avoid the obligation it tells us the benefits involved in doing so. It is very obvious. What organisation would go to these lengths if there was not something to be gained by it?

Mr. Dooley ended his presentation on the issue of us being able to collectively bargain. When contracts of employment contain clauses - this exists for direct and non-direct employees of some of these airlines - providing that the employee's home base can be changed overnight such that he or she is based in Dublin today and Poland tomorrow and this will be the location from which he or she will work, and there is no means available to prevent that from happening, this threat alone will stop people wanting to raise any issue. The fact that he or she would have to move his or her family to the other side of Europe to be based there is enough to keep any worker quiet. That is the effect of such contracts and we see it. We had a recent dispute with one of the low-cost airlines where our ability to organise the workers was limited.

It had been deliberately designed that way to get all of the benefits of the cost and competitive advantages. It also prevents workers from joining trade unions because they are not direct employees. It prevents us from being able to represent them. The only recourse they have is to challenge their employment status when they run the risk of being shipped anywhere across Europe as their new home base. They are major challenges for us in the aviation sector, but it is important to emphasise that it is not unique to Ryanair. We have it in Norwegian and all of the other low-cost carriers because they are directly competing with each other. However, we also see evidence of it in the legacy airlines. Recently, I spoke to my colleague who represents cabin crew staff in the aviation sector and there are now examples of bogus self-employment contracts in one of the low-cost airlines in Poland. That is the start of it. It will creep in and the other low-cost airlines will be in the same position. Deputy Joan Collins asked which sectors were involved. Aviation is definitely one of them and one can see the implications across the board with which we are trying to deal.