Schwarzarbeit!
Here in Germany there's a thing called that, "black work." You need the roof repaired, then you get Heinz Hackelschmackel from across town, who happens to work as a roofer. He shows up on the weekend, does the job, gets paid in cash, and vanishes. Same quality work for half the price, so what is not to like?
The kicker is that if Heinz gets caught doing this then you the employer are on the hook for not having paid various taxes, plus he's not insured under the German health-care system for on-the-job injuries. Say he falls off the roof, as sometimes happens .... All hell breaks loose then.
Just a visit from the Arbeitsamt is enough to mean big trouble, when they are even known to swoop upon a gang of navvies, checking if they all are properly employed or not. It's like la migra in the States chasing wetbacks, but done for German citizens working off the books.
So how about using Heinz Hackelschmackel GmbH, which is what Ryanair has been doing? Then the test must be whether Heinz works exclusively for you, or whether he has other customers. If you are his only customer then other tests also might be applied. Do you set his schedule, along with his terms and conditions? Does he present himself to your customers as your employer, wearing your uniform and flying your equipment?
If the guy lives and works in Germany but claims to be self-employed through an agency in Ireland, paying lower Irish taxes while Ryanair pay nothing at all ... I don't see the Germans going along with that loophole. Too, the tax authorities can go back eight years, with the statute of limitations only running from when the tax problem first came to light.
MOL has a certain amount of "pull," since his choosing this or that German airport means increased passenger numbers in a time of austerity. He might get away with only a slap on the wrist if Germany needs Ryanair more than vice-versa. On the other hand, if the pilots can show that a somewhat fake self-employment contract was the only one on offer from Ryanair (as it probably was) then they might be able to escape being totally screwed.