- The case for obtaining an expert with local knowledge when expanding abroad was perhaps never clearer than when Ryanair was recently fined. A French court ordered the airline to pay more than €8m (£6.7m), ruling it had broken labour laws.
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The court found that Ryanair had illegally employed more than 120 staff on Irish contracts at its former Marseille hub between 2007 and 2010. It denied the original request to fine the company the equivalent value of the four aircraft based at the site, instead saying the firm should pay €200,000 and €4.5m of backdated social charges.
Ryanair is liable for €3m worth of pension contributions and €450,000 in unemployment charges.
While the issue for some is a simple case of the airline’s failure to fully understand French law, Ryanair maintains it should not have to pay the fines.
Announcing the firm would be launching an early appeal, Robin Kiely from the organisation said: “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.”
Should the firm lose the case and be forced to pay social taxes and pension contributions in France, it is thought it will be able to reclaim the majority of this sum from the Irish government.
However, Ryanair appears to be confident that it will receive the outcome it desires at the European Courts.
It claims there is a “clear contradiction” between EU employment regulations and the 2006 French decree that requires airline crews operating in Ireland to pay social taxes and pension contributions in France, despite the fact they have already been paid in Ireland.
Once at the European Courts, Ryanair believes EU regulations protecting the mobile transport of workers will be upheld.
Nonetheless, contracting and compliance errors can be avoided by having a person on the ground when expanding into foreign territory who is familiar with local regulations, laws and customs. TMF Group is the local experts with the global reach to help businesses of all sizes when expanding across borders.