Daily Management Review

The German Authorities Check the System of Hiring Pilots


Yesterday it became known that the German city of Koblenz’ prosecutors launched an investigation into the staffing agency that hires pilots and deliver them to lease to low-cost airlines Ryanair. Recruitment agency is suspected of fraud to the payment of taxes and social insurance. In connection with the investigation active discussion began on the issue of how to prevent such a way to the hiring of pilots in general.

Often pilots do not sign contracts not directly with the airline, but with a recruitment agency that provides airlines staff. Now the prosecutor's office of the German city of Koblenz checks the working methods of the British recruitment agency, which collaborates with the budget airline Ryanair. As Attorney Hans Peter Gandner said on Wednesday, recruitment agency and some individual pilots are suspected of involvement in fraud in respect of social security and taxes. Recruitment agency hired pilots and provided them to the leasing of the airline. Pilots, based in Germany, had to pay taxes and contributions in Germany that, according to prosecutors, was not made in full. According to Mr. Gandner, UK Recruitment office has already been searched. The investigation involves 50 to 100 pilots.

As stated on Wednesday in Ryanair, they know nothing about the investigation, the company expects all its partners comply with all rules regarding the tax and social security. Ryanair said that it is common practice at many airlines as part of the pilots employed directly by the airline, and some - in the staffing agency. Two-thirds of Ryanair pilots are working under a contract directly with the airline, and the remaining third - under contracts with employment agencies.

In connection with the present case, discussions of this practice of hiring pilots intensified in general. This practice is criticized by the unions. According to Marcus Val from the German pilots union Vereinigung Cockpit, «in a profession where people every day make serious decisions, where we are talking about human lives, the practice whose sole purpose is to bypass labor laws and social security systems should not dominate." According to experts, the conclusion of contracts not directly with the pilots, but with recruitment agencies allows airlines to save considerably. For example, under such a contract, a company may not provide the pilot with a minimum number of working hours, which could negatively affect the salary. Very often, these contracts are concluded with young drivers, and, according to a recently released study Ghent University, the practice is spreading.

This week, Ryanair reported for the last fiscal year ended in March. The airline’s net profit grew by 66% to € 867 million. The growth in passenger traffic in 2015 was 11%, up to 90.6 million people. The company itself is linked to behavioral change, which has become more friendly to customers. Last year, the carrier launched a so-called AGB program (Always Getting Better), in which passengers are offered additional benefits, and some services were provided free or sold at deep discounts.

source: dailymail.co.uk