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Business

Ryanair chaos turns tables on workers' rights

An exodus of Ryanair pilots is just the tip of the iceberg as workers fight over diminished rights, say analysts. Amid a tightening labor market, companies can expect more trouble ahead.

Ryanair's sudden cancellation of some 20,000 flights this fall and winter due to an apparent shortage of pilots has exposed deep shortcomings in the Irish airline's labor relations.

The poster child for a changing aviation industry, the budget carrier's rapid expansion has challenged traditional players such as Virgin and British Airways and saw the airline achieve record profits of 1.32 billion euros ($1.55 billion) in 2016 against revenues of 6.54 billion euros.

But amid what some analysts say is an obsessive drive for efficiency, its pilots and cabin crew are increasingly forced to accept weak employment terms and short-term contracts. Many of its air crews are hired on a self-employed basis through agencies, and are often only paid for the hours their planes are in the air.

Ready to walk

"Ryanair has a highly transactional relationship with staff and one that is highly precarious for workers, but now also clearly for the airline," Geraint Harvey, a senior lecturer in human resources management and industrial relations at the University of Birmingham, told DW.

Read more: Up in the air? Ryanair's growing pains

According to Harvey, a majority of Ryanair pilots were until recently "questionably self-employed in that they did not determine their wage or control their schedule and yet worked for themselves."

Until now, he added, pilots have been unable to register their discontent because Ryanair was one of the few airlines enjoying strong growth figures. But the arrival of competitors including Norwegian Air has left it suddenly facing much higher staff turnover.

Ryanair doesn't recognize unions, and due to the tremendous cost of becoming a pilot, there is a huge financial disincentive for pilots to take strike action, Harvey explained.

Watch video 01:41

Pilots revolt at Ryanair

The airline has insisted its winter scheduling debacle, which saw the flights of close to a million passengers cancelled, is not about a shortage of pilots.

Profits hit

The Ryanair chaos is just one example of the surprise blowback that can hit companies that impose increasingly poor labor practices. Earlier this year, a similar mass-resignation by self-employed sales agents at British doorstop lender Provident forced the company to issue a profit warning, as debt collection rates fell by almost half. Due to a massive fall in new lending, revenues for 2017 were likely to fall by 120 million pounds.

At the heart of the crisis was a plan to replace half of Provident's 4,500 self-employed agents with lower-paid contract staff positions, whose schedules would be closely managed by iPad apps connected to head office. Thousands of workers simply refused the new arrangements, and industry analysts say their sudden departure will likely affect profitability at the sub-prime lender for the next three financial years.

"Examples from the gig economy show that collectivism is alive and well and even in the absence of trade unions, workers will still unite to combat egregious employment relations behaviour," said Harvey. 

Black cab London Uber (picture-alliance/empics/A.Devlin)

Last year, scores of Uber drivers complained about low pay and long hours by organizing a go-slow demonstration through the streets of London, blocking traffic for hours

The London-based Institute for Employment Rights (IER) said the rise in unconventional worker rebellion was inevitable, as UK trade unions have to jump over increasingly high hurdles before they can organize lawful strikes. This is a result of a severe weakening of union power that began during former Prime Minister Margaret Thatcher's decade in office.

"UK workers face the most restrictive laws on trade unions in the western world. As a result they also have fewer rights, work longer hours and receive lower pensions than most workers throughout Europe," said Carolyn Jones, the think-tank's director.

Companies underestimate how a worker exodus can push them to the brink of survival, she warned, and that increasingly, workers are prepared to break the law to make their voices heard. She cited the case of prison officers — whose contracts forbid them from taking strike action — but who previously organized stay-at-home "duvet days" to highlight the increased safety risk in Britain's jails.

Watch video 02:41

Why is socialism in decline in Europe?

Unions say the classification of employees as self-employed contractors is endemic in the UK, a move which often helps firms avoid paying even the minimum wage and other benefits.

According to Britain's largest union, Unite, as many as 5.5 million workers are employed on zero-hour contracts, where staff are only called into work as and when required. The practise is common place in the retail, food and beverage and social care sectors.

Workers or serfs?

Academics also bemoan a type of working relationship that echoes one from medieval times, when a serf (or villein) was bonded to a landlord and paid rent despite being guaranteed no income.

"Neo-villeiny" is best expressed by the thousands of personal trainers who must pay rent for the opportunity to attract fitness center clients. Such a business model tends to benefit the gym more than the trainer, amid increasing competition for clients and an abundance of new fitness coaches.

Some labor rights experts point to the rising fortunes of Jeremy Corbyn in Britain, leader of the opposition Labour party, as proof that workers are demanding change. Corbyn promised to end zero-hour contracts and repeal restrictive trade union legislation if elected at a snap election earlier this year, which helped Labour to undo Prime Minister Theresa May's parliamentary majority.

"Those policies are increasingly popular with the next generation of voters," said the IER's Jones, who insisted that governments "have a moral, social and economic duty to ensure that labor relations are conducted in a civilized and constructive way."

As far as Jones is concerned, more unconventional action by British workers is "inevitable" as firms only tend to respond to "wildcat action that hits their profits and reputations."

"This 'free-market' system is now spreading throughout Europe and with the demise in recent years of any concept of "social Europe' this is likely to get worse," she warned. 

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