I thought that T&C were generally hammered out between employers (who want as much as possible for their money) and unions (who want as much as possible for their members). Regulators define safe limits using the lowest common denominator principle (ie to cover all situations and persons). Duty time should be linked to duty and rostering IHMO. If one's roster is all over the place with rest not properly allowed for or time zone changes mean rest is very difficult then duty times below FTL are well in order. However, I would contend that the closer an Ops department gets to offering a stable 5 on 2 off roster with no change between early and late during a duty cycle, the more an operator is likely to think that crew can fly close to FTL.
Oh, and by the way, I think MoL has done more to harm the image of LCC than anyone else to date. I furthermore think that his method of dealing with staff, customers and pretty much everyone is appalling. Some of FR "so-called" cost saving measures are a) short sighted and b) repugnant. And the Ryanair method of doing business has very little to do with SouthWest Airlines other than looking the same.