Ryanair could face millions in claims and legal costs, writes Siobhán Creaton, Finance Correspondent

The High Court ruling to allow the Labour Court to investigate Ryanair pilots' complaints about their terms and conditions could, if upheld by the Supreme Court, mark the beginning of a new chapter for the airline.

Yesterday's verdict amounted to a pummelling, with Mr Justice Michael Hanna finding against the airline on all counts and ordering it to pick up the tab for the case.

Ryanair's chief executive, Michael O'Leary, will be anything but pleased and will already be barking orders at the airline's lawyers telling them to pull out all the stops for the Supreme Court hearing.

In a statement, the airline said it expects its appeal to be filed next week. "We are confident that the Supreme Court will find in our favour," it said yesterday.

This confidence is based on its understanding of the 2004 Industrial Relations Act its Dublin-based pilots are using to allow the Irish Airline Pilots Association (IALPA) to bring their dispute over terms and conditions to the Labour Court to investigate.

Ryanair, which refuses to negotiate with trade unions, had challenged the Labour Court's entitlements to hear the pilots' complaints under this legislation.

It argues that this legal provision was never intended to apply to "high-pay" multinational companies in Ireland like Ryanair and is tantamount to bringing union recognition in by the back door. The airline claims its employees fare better, in terms of their pay rates and terms and conditions, by engaging with Mr O'Leary and his management team directly rather than being represented by trade unions. "Collective bargaining has resulted in better pay for Ryanair's pilots than equivalent pilots employed by our competitors," the statement added.

The pilots, who have waged a battle with Mr O'Leary since the summer, are cock-a-hoop with the outcome.

IALPA president Evan Cullen, who has represented the Ryanair pilots, says the ruling also bodes well in terms of another case the airline has taken to block the Labour Relations Commission investigating the more than 200 victimisation claims made by the pilots.

"This would expose Ryanair to claims of up to €50 million and further legal costs," Mr Cullen said.

Almost all of Ryanair's Irish-based pilots are claiming to have been victimised by the airline and have lodged multiple complaints. Each pilot could be awarded compensation of up to €260,000, equal to two years' pay. Sixty-four pilots have also taken High Court proceedings claiming that Ryanair's refusal to negotiate with a union is a breach of their constitutional rights.

While Ryanair has tried to portray this row as the pilots seeking union recognition, staff argue that all they want is fair and equitable treatment reflected in their contracts.

This row has been rumbling for almost a year and was sparked by the need for the airline's 100 Dublin-based pilots to be trained to fly Ryanair's new fleet of Boeing 737-800 jets. The aircraft they were using were to be phased out and the airline wanted to alter the pilots conditions in a way that greatly upset their most powerful employees.

Things turned nasty when Ryanair's eight senior pilots entered into a dispute with the airline over their right to training and their contracts and rights where redundancies would be sought. One of them, Captain John Goss, was subsequently suspended. He claimed Ryanair was conducting a campaign of bullying and harassment against him because he was seeking to use normal industrial relations procedures in his dealings with the airline and to have his concerns represented by IALPA.

During the summer, Mr O'Leary and Ryanair were virtually a permanent fixture in the Four Courts as they fought Capt Goss's claim and sought to block the growing number of suits being taken against it by his pilot colleagues. The pilots joked that Ryanair had moved its human resources department to the courts.

After many charges and counter-charges involving the issuing of redundancy notices to pilots who refused to accept the airline's terms, a resolution was eventually reached.

The pilots agreed to pay their own training costs, of about €15,000 each, rather than to accede to the airline's request that as part of the truce, they should drop all claims against the company.

Many of the pilots have already completed their training and will watch developments to see whether they may be entitled to win back that sum from the airline as well as other sums in compensation for their grievances.

Beyond Ryanair, other employers will follow the saga to gauge the full implications of this controversial industrial relations legislation on non-unionised companies.