Ryanair boss rejects High Court ‘culture of fear’ claim

O’Leary says he was not happy with handling of pilot sick leave by Peter Bellew, who is being sued by Ryanair

Ryanair boss Michael O'Leary rejected in the High Court yesterday that there was "a culture of fear" among the airline's pilots on sick leave from work.

Pilot attendances was an area under the charge of chief operations officer (COO) Peter Bellew, whom Ryanair is suing to prevent him joining rival Easyjet next month.

The airline maintains that Mr Bellew agreed not to join any competitor for 12 months after leaving Ryanair when he accepted share options in the company in 2018.

Mr Bellew says the agreement is null and void and denies any breach of contract. He has pledged to honour confidentiality agreements with Ryanair after joining Easyjet in January.

Responding to Mr Bellew's senior counsel, John Rogers, Mr O'Leary said there were issues with a small number of pilots calling in sick either the day before or the day after they were scheduled to take time off.

Mr O’Leary said he was not happy with Mr Bellew’s handling of this and other areas, and set up meetings to address the problem.

He said Ryanair did not have these pilots “all shot at dawn or hung, drawn and quartered” but spoke to them about improving attendance like any good employer.

Mr O’Leary rejected Mr Rogers’ suggestion that he had created “a culture of fear” among pilots.

An incident

The airline group’s chief executive denied that he had gone “nose-to-nose” with a former employee in an incident that almost sparked violence after allegedly calling the staff member “f***ing useless”. He said the individual had since left Ryanair on very good terms.

Mr O’Leary described as “completely untrue” a claim he had sacked a German aircraft crew for exercising its discretion not fly due to fatigue.

“If that had occurred, we would, I’m sure, have lost the unfair dismissals case,” he said. Mr O’Leary stressed that Ryanair complied fully with all safety requirements at all times.

Mr Rogers put it to him that Mr Bellew attended a hearing conducted by the Irish Aviation Authority, the airline safety regulator, into the matter.

The lawyer said the fact that Ryanair had Mr Bellew deal with the the regulator on its behalf contradicted Mr O’Leary’s claims that the COO’s performance was poor.

Share options

It also emerged that board member Julie O’Neill questioned whether Mr Bellew was bound by the non-compete clause as he did not benefit from share options given to senior managers this year.

Mr O’Leary told Mr Bellew in March that he would withhold the 2019 share option grant unless the COO improved his performance over the coming six months.

The 2019 scheme was meant to replace the options given to managers last year, as Ryanair’s shares have traded below the 2018 option price of €14.40 a share.

The airline told staff in February they would have to surrender the options granted in 2018 if they wanted to benefit from the scheme commenced this year.

As a result, Ms O’Neill asked Mr O’Leary in July if this allowed Mr Bellew to avoid the non-compete clause.

Mr O’Leary explained that staff did not actually surrender their 2018 options in February. He told the court that some managers chose not to take the 2019 offer and to keep their 2018 share options.

Still applies

As a consequence, Ryanair maintains that the 2018 share option scheme still applies, and thus Mr Bellew’s non-compete clause still applies to him.

Ms O'Neill is a member of the board's remuneration committee, along with former Ryanair finance chief Howard Millar and non-executive director Stan McCarthy.

The committee awards the share options. Mr O’Leary told Mr Rogers he could withhold the offer where he felt there were problems with an individual’s performance. He added he had done so with one other person this year.

The share options are conditional on Ryanair reaching a specific after-tax profits target.

Mr Justice Senan Allen restricted the media from reporting the target for the airline's current financial year, which ends March 31st, 2020. Mr O'Leary and Ryanair's senior counsel, Martin Hayden, claimed this would cause the airline to breach stock exchange rules.