Ryanair Charged with Illegal Employment

Photo:en.wikipedia.org/Arpingstone

Photo:en.wikipedia.org/Arpingstone

Following a three-year investigation, the court of Aix-en-Provence reached a final decision on a case involving Irish airline Ryanair and its alleged illegal business on French soil from 2007 to 2010. The low-cost, discount airline had personnel based in Marseille, working under Irish contracts, but was not a registered business in France.

The company was required to pay over €200 000 in fines and €9 million in damages to plaintiffs – €4.5 million to social security, €450 000 to unemployment, €3 million to the pension fund, and the rest to unions.

An investigation began in 2010, with the OCLTI, the Central Office for the Fight Against Illegal Work, and found that Ryanair was truly operating in France. Its employees were living in the region, working in Marignane, and even had assigned lockers with their names on them – which were removed once the investigation began.

Ryanair failed to register its new business activity with the Register of Commerce and the URSSAF, the French union associated with the national social security system, when it first opened business in Marignane, a suburb of Marseille, in 2007.

The company used two sub contractors to recruit and hire stewards and hostesses, meaning temporary workers were hired for permanent posts – a prohibited practice in France.

Furthermore, French labor laws were not applied to its 127 employees at the Marseille-Provence airport. Employees were denied benefits such as mandatory pension, reimbursements for illness and hospitalizations, and union privileges, having only one representative in Ireland that was not elected by employees.

According to one of its lawyers, Luc Brossolet, Ryanair claims that Marseille is only a “technical base”, meaning its personnel fly Irish planes and are traveling through different countries. In this case, Brossolet says that Irish law should apply. A decree from 2006 requires, however, that bases operating on French soil must respect French law.

In refusing to submit to the French legislation, wrote the court in its judgment on Wednesday, the company organized a true “social dumping”, allowing it to reduce the costs of exploitation, more particularly those relative to personnel. Taxes in France are between 40 and 45%, versus 10.75% in Ireland. This situation creates unfair competition against the other airlines that respect the national legislation.

Ryanair rejects the condemnation and plans to appeal the court’s decision to the European Court of Justice. The company continues to claim French law does not apply, underscoring how its planes are only temporarily on French soil.

Since its employees and the business have already paid taxes in Ireland, it should not have to pay taxes again in France, says Ryanair’s Robin Kiely in an interview with the BBC. If the company is forced to pay the social taxes and pension contributions in France, it believes it can reclaim part of costs from the Irish government.

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