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Lessons to learn from Ryanair

28/09/2017

Ryanair Chief Executive Michael O’Leary is used to controversy but even he must be aware of the reputational damage the airline is amassing as it cancels up to 50 flights a day due to issues over the management of pilots’ holidays.

While he admits it was Ryanir’s ‘management failure’ that has caused the problem, its appeal to staff for flexibility over leave arrangements – including financial incentives to come back to work - appears to have fallen on deaf ears as pilot representatives demand instead better conditions and pay.

So what can we learn from the fiasco? An employee’s terms and conditions will usually alter during the course of their employment – a pay increase, for example, is often an uncontroversial change and made by mutual consent but sometimes employers want to do something their workers are less willing to accept.

In the case of Ryanair, the company wants to change pilots’ contracts in relation to some fundamental conditions around pay and holiday.  

So can an employer make a change like that legally whilst minimising risks? There are several options:
 
1) A contract can only be amended in accordance with its terms or with the agreement of all parties. Employers have to look at the existing terms of the contract and see if what they are trying to change is what’s called “an express term”. This means a term that is implied into the contract or something incorporated either by statute or as a result of a collective agreement. 
 
2) Unilaterally imposing the change and, if the employee continues to work, state that is an implied agreement to the new terms.
  
3) Bringing the existing contract to an end and offering employment on new terms.
  
Clearly the second and third options carry a high degree of risk for the employer and often gaining an employee’s agreement comes at a price – as Michael O’Leary said in relation to the Ryanair pilots, he was offering them a “whole bunch of goodies” in return for their consent.  

But Mr O’Leary is not going so far as to look at imposing changes or dismissing the pilots and re-engaging them on new terms and conditions. 

If there is a unilateral imposition of the change or a dismissal and re-engagement, unless the employer can establish a potentially fair reason for the dismissal and show it acted reasonably in dismissing an employee for failing to agree the change, employers leave themselves open to a claim for unfair dismissal. 
 
Agreement would always be the best policy!

For more information regards the issues highlighted in this article, feel free to contact Julia on 01952 208420 or j.fitzsimmons@fbcmb.co.uk

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