Ryanair Fined 8 Mln Euros For Violating French Labor Laws

(RTTNews) - A French court on Wednesday ordered Ireland-based low-cost airline Ryanair Holdings Plc (RYA.L, RYAAY) to pay 8 million euros, or $10.88 million, in fines and damages for violating French labor laws by employing Marseille-based crew under Irish contracts. However, Ryanair said it will appeal the French court's ruling and fines.

Ryanair noted that the majority of the fines imposed by the Aix En Provence Court in France related to alleged non-payment of social insurance and state pension contributions in France for Ryanair crew flying to and from Marseille during the period between 2007 and 2010.

The company said that the fines were imposed despite the fact the employees were on Irish contracts, operating on Irish registered aircraft and had already paid their taxes, social taxes and state pension contributions in Ireland, in full compliance with Irish and European Union regulations.

But the French court ruled that Ryanair must comply with a 2006 decree that requires airlines in France to pay their staff under French contracts and also file taxes as well as social security contributions in France.

According to Ryanair, there was a clear contradiction between current EU employment regulations under which these Irish workers paid their taxes and social taxes in Ireland, and the 2006 French decree that seeks to require airline crews operating in Ireland to pay social taxes and pension contributions in France, despite these already having been paid in Ireland.

Ryanair said it will appeal the French court's ruling and fines. The company added that the contradiction can ultimately only be resolved by the European Courts upholding EU regulations on the employment of mobile transport workers, and it intends to pursue this appeal all the way to the European Courts.

Further, Ryanair said that if it was ultimately forced to pay these social taxes and pension contributions in France, then the vast majority of these contributions would be reclaimable from the Irish Government.

Robin Kiely, Head of Communications, Ryanair said, "Ryanair will study today's ruling in detail, and will be lodging an early appeal. Since all of our people operating to/from Marseille 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."

Kiely added that Ryanair would continue to comply fully with Irish and EU employment law, income taxes and social tax obligations.

In a separate statement, Ryanair said that the traffic for the month of September rose 3 percent from the year-ago period to 8.10 million passengers. Load factor for the month rose to 85 percent from 84 percent in the same period last year.

Further, the company noted that its annual traffic to end September grew 2 percent to 80.4 million passengers.

RYAAY closed Wednesday's regular trading on the Nasdaq at $50.02, up $0.11 or 0.22 percent on a volume of 371894 shares.