Ryanair to Appeal French Decision

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Michael O’Leary not beaten yet after costly wrist-slapping from French court

Irish low-cost airline Ryanair has responded to last week’s decision from a French court to fine the company €8 million by saying that they will appeal the decision.

The airline was found guilty as charge of not paying a French social security and state pension charge at their base in Marseilles. From 2007 to 2010, Ryanair brought in their own employees and subjected them to Irish taxation regimes rather than French ones. The court found however, that this runs contrary to a decree from 2006 in French law which obliges people working in France to essentially pay French taxes. The social charges were an important point of argument in the case, with the Ryanair side making the contention that the Irish workers shouldn’t be subject to such a charge if they aren’t French citizens and residents benefiting from the French social system.

The court didn’t see it that way – something that’s hard to argue against when you’re working in the same place for two or three years.

The Ryanair counter-argument runs along the lines of the workers in question being Irish citizens working on Irish contracts with Irish-registered aeroplanes and who had already paid their taxes and social contributions to the Irish republic. In compliance with EU and Irish law and with the reciprocal tax arrangement between Ireland and France, they argued, these workers should not be subject to double taxation.

Precedent was against Ryanair, however, as two other foreign airlines were fined on similar grounds a few years back – namely EasyJet of the UK and another Irish airline CityJet.

But O’Leary & Co are not beaten yet. They believe that the court in Aix-en-Provence was in breach of EU employment regulations and that that will be the winning of their argument.

The battle between EU law and French law, Ryanair say, can only be resolved by EU courts upholding their own regulations on the employment of mobile transport workers.

“Ryanair will study [the] ruling in detail, and will be lodging an early appeal,” said spokesman Robin Kiely. “Since all of our people operating to/from Marseilles between 2007 and 2010 have already paid their social taxes and pension contributions in Ireland, in full compliance with Irish and EU employment regulations, we do not believe that either Ryanair or our people can be forced to double-pay these contributions a second time in France.

“Should Ryanair be ultimately forced to pay these social taxes and pension contributions in France, then the vast majority of these contributions will be reclaimable from the Irish government.”

That won’t be good news for an Irish government intent on austerity.

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