Ryanair loses €8.3m court bid

Budget airline to appeal against order to pay French social charges – saying staff had already paid in Ireland

29 October 2014
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RYANAIR has lost its appeal against an €8.3million fine and damages award for employing aircrew illegally at its Marseille base.

The appeal court in Aix-en-Provence upheld the verdict that the Irish budget airline had flouted French employment regulations and avoided social charges in employing 127 staff on Irish contracts between 2007 and 2010.

Ryanair has long contested its guilt and said after the first hearing that its staff were “employed on Irish contracts, operating on Irish registered aircraft (defined as Irish territory) and have already paid their taxes, social taxes and state pension contributions in Ireland, in full compliance with Irish and EU regulations”.

It was not represented in the Aix appeal court but spokesman Robin Kiely confirmed today that it would appeal as French authorities were seeking double payment of social insurance payments which have already been fully paid in Ireland.

He said: “Ryanair will appeal this ruling to the French Supreme Court on the basis that European employment law clearly allows mobile workers on Irish registered aircraft to pay their taxes and social taxes in Ireland.

“We will also be seeking a referral to the European Court of Justice to prevent these attempts by the French authorities to claim social taxes that have already been paid in full to Ireland.”

Ryanair, which operates services from 17 airports in France, was ordered to pay a fine of €200,000 plus unpaid social charges of €4.5m to Urssaf, €3m to the pension fund and €493,045 in unemployment charges plus interest.

French pilots’ union SNPL welcomed the ruling saying it showed that low-cost companies were not above the law – and Urssaf lawyers told journalists that the court’s message was clear “that European law is not a means of defrauding the social welfare system”.

Ryanair closed its base at Marseille Marignane in 2011 but still operates flights to 37 destinations from the airport, where gendarmes raided the company’s offices as part of a new investigation into its employment practices for these services.

In the original court ruling in Aix the judge said Ryanair was avoiding French social charges of about 40-45% of wages as against just 10.75% in Ireland and accused the budget airline of “dumping its social costs” on France to reduce its staff employment costs.

Other low-cost airlines easyJet and CityJet have already been fined €1.6m and €1m respectively on similar charges.

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