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Thursday, April 19, 2012
Ryanair staff costs may increase dramatically after the airline heard it will be forced to pay social welfare contributions for employees at bases around Europe.
Currently, 8,500 cabin crew and pilots have Irish work contracts irrespective of where they reside, on the basis that the low-cost airline is registered in Dublin.

Ireland’s social welfare contributions for employers and employees are one of the lowest in the EU — but so is the country’s spending on social protection.

However, under new European Parliament legislation, airlines will have to pay their staff’s social contributions based on the country staff are located in — the base from which they fly and to which they return after their work shift.

It is designed to prevent air crew being insured by "letter-box companies" or being subject to legislation of a country in which they do not live.

Ryanair criticised the change. Spokesman Peter McNamara said: "This is another example of how the EU introduces regulations which serve no purpose other than to increase the cost of air travel and reduce competitiveness between EU states."

Ryanair chief executive Michael O’Leary recently advised Belgian airline SN to move its headquarters to Ireland and give their staff Irish work contracts. "It’s much cheaper," he said.

Under the legislation, workers who find themselves out of work will be able to claim social welfare payments from the country in which they are living.

British MEP Jane Lambert said the legislation was designed to uphold the rights of those who are covered by social security systems.

"It was not put in place to provide an opportunity for cost-cutting for businesses and asking them to provide an opportunity, particularly for those with mobile workers, for the business to choose the cheapest place to register its workers for social security purposes," she said.

The new rules also clarify the unemployment benefits situation of cross-border self-employed workers who return to their home country at least every week.

It says that where the person’s home country does not have unemployment insurance for the self-employed, the country where they last worked should pay the unemployment benefit.

The new rules have been agreed by the EU member states, and are expected to be adopted by June.


Ryanair faces social welfare costs rise | Irish Examiner
 
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