Irish budget airline Ryanair has said a ruling last week by the Court of Cassation in Paris will free up €13 million it had put aside to pay its French social security bill and could pave the way for it to reopen offices in the country.
In an announcement on 19 September, Ryanair said the court had upheld its claim that pilots and cabin crew who were temporarily based in Marseille between 2006 and 2010 were exempt from French social security payments as holders of A1 (formerly E101) certificates, proving they had already paid contributions in Ireland.
According to the airline, France had refused to recognise certificates issued in other member states and imposed double charges on its staff. In 2013, a court in Aix-en-Provence found Ryanair liable for almost €10 million in fines and back payments for failing to pay its dues in France.
However, the airline says a European Court of Justice ruling from last year turned the tables on the French authorities by holding that EU regulations on the application of social security schemes across the bloc meant A1/E101 certificates were binding in the member states where their holders carried out their work.
The ECJ proceedings arose from a dispute involving German cruise ship operator A-Rosa, which was fined more than €2 million by a French regional social security collection organisation in 2007 after staff on ships operating on the rivers Rhône and Saône were found to owe two years’ worth of back payments.
A-Rosa’s administrative branch in Switzerland had procured the workers E101 certificates from the Swiss Social Insurance Office and the company tried to argue this insulated them from the French charges under Regulation (EEC) 1408/71, which holds at article 14(2)(a) that EU workers from one member state posted to another continue to be subject to their home state’s laws. However, a succession of French courts disagreed, pointing out that the employees in question worked solely in the territory of France and couldn’t avail themselves of 1408/71 exceptions.
The Court of Cassation ultimately passed the question to the ECJ, which in April last year upheld the validity of E101 certificates in courts across the bloc, “even where it is found by those courts that the conditions under which the worker concerned carries out his activities clearly do not fall within the material scope of that provision of Regulation No 1408/71.”
Ryanair said the ruling showed the French authorities had “acted unlawfully over the past 10 years” and said it would pursue a full refund of its double taxes. In its announcement last week, the airline said the Court of Cassation had accepted its position on E101 certificates, cancelling “all convictions” against it and returning the case to the Paris Court of Appeal for rehearing.
“We believe that this decision will now lead to an early and favourable conclusion of the criminal cases and tax demands in Aix-en-Provence,” Ryanair’s chief people officer Eddie Wilson said in a statement. “This should in due course lead to the repayment of up to €13m of social tax payments, which Ryanair was required to put into escrow.”
Wilson said that the decision could lead the airline to reopen its office in Marseille, which was shuttered in 2011. “We are already in discussions with a number of French airports, and the French Ministry of Labour, which we hope will lead to Ryanair announcing some bases in France in the near future,” he said. Pilots and cabin crew based in France would, however, be employed under local French contracts and pay their social taxes in France rather than Ireland, he added.