9 Apr 2015


Ryanair’s Personnel Policy

Ryanair Ltd. is an Irish low-cost airline, headquartered on the grounds of Dublin Airport in Swords, Ireland, with its primary operational bases at Dublin Airport and London Stansted Airport. The company was founded in 1985 by Tony Ryan and his children. The airline has been characterised by rapid expansion, a result of the deregulation of the aviation industry in Europe in 1997 and the success of its low-cost business model.  Ryanair currently carries about 80 million passengers a year in 25 countries of Europe and Turkey, Cyprus and Morocco.  Ryanair operates over 300 Boeing 737–800 aircraft.
            As a low-cost airlines Ryanair believes it has to seek savings everywhere in its operations to keep prices low.  This includes using third-party staffing companies as contractors to hire probationary workers.  During this process may occur some situations where rights of employees can be violated.  In the last five years there were several situations where the company was facing charges in this regard. One of them was a case where a pilot was fired because he was handing out trade union flyers. The other was a case of French employees who were officially employed in Ireland (ergo insurance and social benefits worked only there), even if they started and finished their shifts in France. The third and probably the best know history of Sarah Foley, whose father started the organization called “Ryanair Don't Care” after her abrupt dismissal.
            There are several parties in this situation. First of all, there is Ryanair that is trying to maximize its profit by continuous efforts to lower its costs. There are third-party staffing companies like Crewlink, St James Management, Dalmac or Cavok who hire the probationary workers and have indirect influence on work environment and policy at Ryaniar. These third-party companies take ~50% of what Ryanair pays them for workers (around 15€ from an hourly salary of 30€).
Second are Ryanair employees who are trying to get decent wages, respected rights, stability of work and variety of other benefits (e.g. health insurance) that are typically guaranteed in first world countries.
Next are the governments of different countries responsible for protecting their citizens’ rights as employees. But on the other hand, these governments want to attract low-cost airlines to the smaller regions to increase the mobility of people and boost the economy, often even paying the airlines like Ryanair and o0ther discount airlines to use their regional airports.
Finally, there are customers who are affected by both – price of service as well as quality of service. They want cheap flights with wide choice of nearby departure airports and destinations.
            Ryanair's cabin crews are ~80% (around 4000 out of 5000) probationary workers, hired by the third-part staffing companies.  These companies recruit via the Internet. They invite respondents judged to be qualified to a training program where they offer them training after which they have the possibility of  employment at Ryanair as probationary workers. As trainees, they have to pay 3000 tuition for 5 weeks of training which is actually regular work on board. After training some of the candidates are employed, some are not.
When trainees become probationary workers, they have 12 months of probation, after which they can be dismiss without further notice. Also probationary workers have to rent uniforms. They have no food allowance or drinking water on board flights. According to Mr. Foley, “… up to 60% of 4000 probationary Ryanair cabin crew are terminated within their first 12 month period. This earns Ryanair – and so called third party providers – a tidy profit. (In their own correspondence Ryanair admit to a rate of 30%, a more believable figure in their eyes.)” So we come to the history of Sarah Foley.
 In late 2008, 18 years old Sarah Foley was terminated after a period of only 7 weeks of employment as probationary Ryanair cabin crew.  Ryanair attributed her dismissal to the recession. Attendance issues were only mentioned once when protests organized by her father started and appeared to be put in place by senior Ryanair management to cover the termination. The day before Sarah was terminated, a Ryanair supervisor had talked to Sarah about resigning (probationary cabin crew wishing to resign have to pay 200€ fee). This Ryanair supervisor apparently was aware of Sarah’s imminent termination.
After termination, Sarah was asked to return her rented Ryanair uniform for security purposes to the Ryanair head office. If she failed to give it back, the money would be taken from her last salary which was still kept by Ryanair/Crewlink (her third party training company). After she’d returned her Ryanair uniform, she asked about her flight home. She was not given any clear answer about her return flight, but was told (by the very same Ryanair supervisor who had talked to her about resigning): “You do not work for Ryanair anymore and you will need to pay for your flight home”. As Sarah had been given a free flight by Ryanair when she started her employment, she presumed the company would return her back to Liverpool.
Sarah decided she would not leave Ryanair’s head office until she spoke to a senior Ryanair employee to confirm this flight issue. After a few hours of waiting, she was told again she’d have no free flight home. She found herself fired, broke and with no way back home. A couple of days later her family collected her from abroad and after that her father started a campaign, “Ryanair Don't Care” which he still conducts with more and more support from ex-workers of Ryanair and other people.
In 2011, there were two cases of other abuse worker's rights. Pilot James Anderson was fired for allegedly "compromising safety", when in fact he was handing out trade union flyers to the other crew members. He sued the company and won £40,000 compensation apart from salary for his unemployment period. At the same time a French prosecutor accused Ryanair of illegal registration as an Irish French workers (Ireland has a more flexible labor law), and also of forbidding employees to join unions. The trial will be held in Aix-en-Provence, near the airport in Marseille, where Ryanair had a small base of four planes and employed about 200 passengers daily from 2006-2011. Ryanair terminated the base in January 2011, when prosecutors refused to withdraw the charges against the company, eliminating several connections from Marseille to cities in Europe and Morocco. Ryanair’s boss Michael O'Leary had argued that the company had the right to register employees in Ireland, where taxes are significantly lower, because they did not live permanently in France. This view is not shared by prosecutors, because the persons employed by Ryanair started and finished their work in France, who according to French law should be treated as the local employees.
            According to this long history of labor work violations Ryanair have faced declining numbers of people who want to work for them. Furthermore passengers in western European countries, especially in Germany, are trying to use services of Ryanair as rarely as possible, choosing different carries like Wizzair, Germanwings or EasyJet. Also Ryan’s recruitment process is being crippled – John Foley states: “Ryanair will only use the Stansted Radisson Hotel for UK recruitment in 2012 as a court order is in place against me for harassment of a John Mudge (who has St James Management registered in his name)”.

Provide an assessment of the ethics of Ryanair’s policy of using third-party contractors in its employment practices. 

Certainly Ryanair’s treatment of Sarah was inexcusable, if not plain stupid, and the union-busting efforts potentially illegal, but do you consider Ryanair’s treatment of probationary employees unethical?

Case analysis
Provide an assessment of Ryanair’s policy of using third-party contractors in its employment practices.
 Ryanair's policy of using third-party contractors is reasonable. In my view, the only thing they have to worry about is to make payment to the third party contractors on time. All of the human resources issues have to be resolved by the contractors. Third-party contractors just have to fulfill agreement and deliver employees for Ryanair, so the company, even with this great fluctuation of employees, always has a full crew. But on the other hand Ryanair really doesn't care what the contractors are doing on their own. In my view, this a bad strategy, especially when companies in other industries, like clothing and electronics, are being held responsible for the actions of their subcontractors.  But there is a legitimate question to ask if responsibility for safety and health in developing country subcontractor manufacturing is truly translatable to service sector in developed countries?  The question might better focus on the industry norms in the airline industry as a whole?  Are they different for the large air carriers than for the discount airlines? 

For me, Ryanair should take more interest in the actions of its contractors. Management of airlines should enforce on third-party some condition that will guarantee some 'basic' rights for probationary workers, like food and water on board, flight back home, etc. Ryanair is facing this bad publicity, but it still is expanding its market.  A significant segment of the air travel market just wants cheap flights and if they know that their carrier is involved in some gray ethical areas, they simply choose to look away.
Certainly Ryanair’s treatment of Sarah was inexcusable, if not plain stupid, and of the union-busting efforts illegal, but do you consider Ryanair’s treatment of probationary employees unethical?
 I think that Ryanair’s actions were unethical, but I strongly believe in model of conducting business that says employees that are treated as an asset not as a cost are far more effective and productive, so that is why I think that Ryanair could earn even more money if they would invest in employees. The example of good politics towards employees can be other airlines – Southwest Airlines from Texas. They are main low cost carrier in USA, but their workers earn more money than they could in other companies at the same position and they are more involved in company life. This result in this that the Southwest Airlines employees are more satisfied from they work than they could be anywhere else. So to conclude I think that in objective way, Ryanair's action lies in a gray ethical area, but if we really want to move further as a society these actions should be considered unethical.
 In judging Ryanair’s policy as  "unethical," I reference the module materials where there various philosophical frameworks for judging something to be ethical or unethical are laid out.   Specifically, I would cite “fairness,” “promise keeping” (although it is more implicit than explicit in Ryanair’s hiring), and industry norms in the airline industry.  In the case of Ryanair, the organizational culture of cost-cutting is so pervasive as to lead to a discounting of any consideration of ethics in their hiring policy.

 John said.