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Ryanair hit for 9 mn euros by French court

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AFP Aix-En-Provence(France)
Irish airline Ryanair was today ordered to pay nearly nine million euros (USD 12.2 million) in damages and interest after being found guilty of breaching French labour law.

A court in southern France, which also fined the company 2,00,000 euros, awarded the damages after ruling that Ryanair had illegally given locally based staff Irish contracts in order to save money on payroll and other taxes.

The company was also charged with preventing workplace councils from functioning and hampering employees' access to unions.

"By refusing to submit to French legislation on social security contributions, the company set up a system of social dumping allowing it to reduce operating costs," the court said in its ruling.
 

Noting that social charges in France were at a rate of 40-45 per cent -- against only 10.75 per cent in Ireland -- the court said Ryanair had created "a situation of unfair competition vis-a-vis other airlines that respected national law."

Ryanair said in a statement that it would appeal the ruling, insisting it had acted "in full compliance with Irish and EU regulations."

If upheld on appeal, the damages will have to be paid to France's social security system, the state pension funds and unions representing airline workers, all of whom were plaintiffs in the action against Ryanair.

Lawyers for the plaintiffs said they were satisfied with the ruling.

"It was recognised that there was fraud," said Jean-Victor Borel, a lawyer for URSSAF, the French organisation that collects social security contributions and was awarded more than 4.5 million euros under the ruling.

The company could have faced even heavier penalties but the judge rejected a prosecution request for an additional fine equivalent to the value of four Boeing 737s that the airline had flown out of the southern French city of Marseille between 2007-11.

The case centres around a facility operated by the company at Marignane, near Marseille and Aix-en-Provence.

Ryanair based four planes and 127 employees at the site without applying French labour law or filling out tax declarations in the country.

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First Published: Oct 02 2013 | 10:15 PM IST

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