Broker agencies, broken standards

If a pilot is looking for a job and goes online to check the vacancies, it comes as no surprise that broker agencies dominate the job market.

In the past decade brokers – in all shapes and sizes – have filled a void created by airlines who were not able or willing to offer permanent or stable jobs.

Instead, brokers started offering screening and recruitment, training programmes, Pay-to-Fly schemes and in some cases – actual job opportunities. But the rise of temporary work agencies has led to a fall in job quality and employee satisfaction. Until now, this was a sentiment shared by crew and only visible to industry insiders. Now, it is out in the open and confirmed by a recent EU Commission report on aircrew employment in Europe: if there is one common denominator in many of today’s employment and social abuses, it is temporary agencies, brokers & other intermediaries.

Broker agencies have led to a deterioration of terms and conditions for crew, opened the door to labour abuses and cemented precarious atypical employment as the new norm. The brokers have broken the standards in the industry.

But first – what is a broker agency?
There is a certain ambiguity as to what is a broker agency and what is not. Some agencies only screen and select crew for a client airline, some employ crew and then place them to work for airlines, others hold a crew pool or they subcontract supposedly self-employed crew. There are also subsidiaries of air carriers that act as a staffing agency. It is important to make the distinction between those different types of agencies because the EU regulator has only foreseen specific employee protections in case of a ‘Temporary Work Agency’. In the other cases, e.g. an airline subsidiary hiring crew – the broker does not fall immediately under the definition in the relevant EU Directive, making it almost impossible for crew to enforce certain labour rights.

The EU Commission’s report shows that many crew do not know if the broker agency hiring them is really an agency in the sense of the EU law. And if the broker is a ‘Temporary Work Agency’, then it is the official employer. But if it is not, things become more complicated because determining the real employer is a precondition for applying the correct labour law, taxation and social security rights. Employees don’t know their rights and can’t enforce them without spending years in court. For example, German pilots working in Spain for Norwegian under its Irish Air Operator Certificate have written to all countries asking them where they should pay their income tax, with no clear response. Various court cases from pilots are pending in different Courts, some dating back to 2008.
Broker agencies opened the door to labour abuses and cemented atypical employment as the new norm.

This means 8% of European pilots – the official number of pilots working via a sort of intermediary – is vulnerable to legal uncertainties and employment abuses. A large majority of those broker agency workers (69%) flies for Low Cost Carriers (LCC). It is also a phenomenon that is more common among young air crew entering the market with limited experience and therefore vulnerable to such “offers”.
An interesting example is the case of a German pilot, flying for a Hungarian airline, registered in Switzerland. The pilot’s contract was signed via a Dutch broker agency. He was living in Croatia and Poland. In a dispute the agency that hired the pilot claimed that Dutch labour law does not apply to him as he was just “hired through the internet” and didn’t work or live in the Netherlands. And this is just one example. There are many more examples of broker agencies deflecting responsibilities and accountability as an employer.
The EU Commission’s report suggests – and rightly so – that given the high level of complexity, it is likely that agencies and intermediaries are not compliant with EU and national laws. They do not respect EU Posted Workers rules, they provide bogus self-employed crew to their client airlines or offer a string of short-term employment contracts to avoid hiring crew on a direct, long-term basis.

The logical consequence is that broker agency workers report to be less satisfied with their job and the quality of training. But the most significant difference between directly employed pilots and the ones working via a broker agency is the reporting of risks. Directly employed pilots worry less about any negative consequences when reporting safety issues and problems compared to the ones working via agencies. The job insecurity that comes along with broker agency contracts may play a significant role here and it is time regulators look at the safety aspects of such employment structures carefully. Along with that, if employment and tax authorities want to tackle abuse and social engineering, broker agencies must be investigated thoroughly.

It comes as no surprise that broker agencies declined to participate in the European Commission’s research. They are rarely more than letter-box companies – in the UK, Ireland, Poland, on the Guernsey Islands, in Malta or even in Singapore. Some of them are even listed in the Paradise Papers. After all, they managed to remain comfortably in the shadow of their client airlines’ dodgy employment practices for years. But that’s doomed to change.

  ECA


Publicerad 2019-12-04 av Rebecca