Pilots are employed by Ryanair – even if they are placed through a foreign company

LSG Berlin-Brandenburg 21.01.26 – L 16 Ba 48/23

Ryanair pilots are employed. This also applies if they are formally self-employed and are placed through a third-party company. The intermediary placement company, which only handles contracts and payments, is neither an employer nor a temporary employment agency and is therefore not liable for social security contributions.

Facts

The plaintiff was a limited company based in the United Kingdom with no branch in Germany. It provided the airline Ryanair with pilots from an exclusive pool on an on-call basis. From 2009 onwards, the pilots acted as "one-man limited companies." Their activities were essentially limited to contract management and payment processing in return for an agency fee.

Ryanair made the selection decisions itself, determined home bases, integrated the pilots into duty rosters, organized training, and checked their operational readiness. Vacation requests and sick notes also went through Ryanair's systems. The plaintiff invoiced the remuneration based on the data provided by the airline and forwarded the payments.

The defendant classified the pilots as dependent employees and regarded the plaintiff as their employer or, alternatively, as a temporary employment agency. The Berlin Social Court overturned the decision. Although employment did exist, the plaintiff was not the employer. The pension insurance fund appealed against this decision.

Decision

The Berlin-Brandenburg Social Court confirmed the existence of dependent employment under Section 7 (1) of the German Social Security Code IV (SGB IV). The decisive factors were the obligation to follow instructions and integration into the work organization. Both characteristics were clearly fulfilled – but not in the plaintiff's business. The pilots were fully integrated into Ryanair's operational processes and were subject to its professional supervision. In particular, there was no entrepreneurial decision-making leeway.

The interposition of single-person companies did not change the assessment. The decisive factor was the actual implementation. Even in the case of contracts between legal entities, an employment relationship with the operating company could exist if the natural person was in fact employed as an employee.

However, the court denied that the plaintiff was an employer. The employer is the party who decides on deployment and organization. The plaintiff did not take on any personnel management or operational management. Her role was limited to administrative tasks.

The court also rejected liability as a temporary employment agency under Section 28e (2) SGB IV in conjunction with the AÜG. The plaintiff did not have its own employer function. All key management decisions were made by Ryanair. The plaintiff's activity was therefore more likely to be classified as agency work with an accounting function.

Practical note

The decision underscores that the assessment of social security status is consistently based on the actual reality of the assignment. Contractual arrangements with foreign companies that are not subject to social security law or formal self-employment agreements do not offer reliable protection. The only decisive factor is whether the operational involvement of the persons concerned corresponds to that of an employee.

When using external personnel concepts, companies should clearly analyze the allocation of responsibility within the contractual structure. This is particularly important in view of the considerable economic and criminal law risks associated with misjudgment. Anyone who effectively employs personnel as if they were their own employees must expect to be classified as an employer under social security law. The decision provides further confirmation of this and is likely to further increase the sensitivity of the auditing authorities to complex pooling and placement models.