German-based pilots flying Ryanair aircraft are to be employed in future through a new company based in Dublin in a bid to shake off a German tax and welfare underpayment inquiry.
BlueSky Resources Ltd was set up on August 24th, seven weeks after raids at six Ryanair hubs in Germany by tax and customs officials as part of a long-running investigation into employment practices of employment agencies linked to the firm.
The new entity is managed by CrewLink, a major staffing and training agency for Ryanair cabin crew. BlueSky Ltd will reportedly employ pilots who fly Ryanair aircraft on five-year contracts, deducting income tax at source. The pilots who are based in Germany will pay German social welfare contributions.
German pilot organisation Cockpit has urged pilots not to sign the contracts, which it says are not compatible with European Union law.
Until now, hundreds of staff on Ryanair aircraft, including pilots, were supplied to the airline on a self-employed basis through two British personnel agencies, Brookfield Aviation and McGinley Aviation. This allowed the airline pay pilots only for hours in the air, while saving on welfare payments and sick pay.
The new contracts with BlueSkies Resources Ltd, based in Baldoyle Industrial Estate in Dublin, are likely to supersede Brookfield and McGinley contracts.
With the new arrangement, Ryanair hopes to draw a line under an investigation into its German operations. German investigators quizzed staff and seized materials in early July, suspecting that pilots were pretending to be self-employed although they flew only Ryanair aircraft.
The new arrangements were reportedly agreed with German tax authorities but are unlikely to resolve the question of past taxes and welfare payments.
German authorities say they are investigating about 100 pilots on Ryanair aircraft – and executives from two service companies – in relation to their pseudo-self-employment investigation.
Ryanair declined to comment on “speculation” about contracts involving its employees or contract pilots.