MEPs vote on social security

MEPs have voted to close a legal loophole that allows low-cost airlines such as Ryanair to avoid paying social security contributions in some of the countries in which they operate.

Under new rules adopted today by the European Parliament in Strasbourg, cabin crew and pilots will be subject to the social security rules of the country in which they routinely work rather than in the country in which their employing airline is based.

Air crew staff working for Ryanair at the Charleroi base in Belgium, for example, will now be able to acquire social security rights there rather than being subject to Irish labour law as is currently the case.

The new rules confirm the concept of a "home base" as the place from which a flight crew member carries out the majority of their work. Such home bases will be used to establish which country's social security system is used by airline staff in the future.

The legislative resolution was adopted with 540 votes in favour, 19 against and 30 abstentions.

Ryanair has come under widespread criticism in the past for employing foreign crew members under Irish law contracts. The Belgian trade union CNE announced last year it was to take legal action against the airline over its treatment of cabin crew workers employed by Ryanair through its Irish-based recruitment agency partner Crewlink.

The union alleged the carrier engaged in practices such as docking employees' pay to cover the cost of uniforms and not offering sick pay, all of which it said were violations of Belgian law.

Ryanair, which closed its Marseille hub in 2010 following a similar dispute with French authorities, denied the union's claims.

"Today's vote 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. This is also another blow for the free movement of labour which was one of the founding principles of the single market," said Stephen McNamara, head of communications at Ryanair.

"Presumably ferry and cruise ship operators will now be required to pay tax and social insurance in every departure port in Europe as well. Presumably EU bureaucrats will also now pay tax and social taxes in their home country instead of the low rates they all enjoy in Brussels," he added.

The airline has previously said it fully complies with the European Directive on Transport Workers that allows all employees to pay income tax and social insurance in the country they work or where their employer is resident and where they are physically paid - which in its case is Ireland.

The new regulations agreed today in Strasbourg also clarifies the rights of self-employed people who work in other member states.

Under the agreed changes, a self-employed worker who contributes to the social security system in one EU country but then moves to another that does not provide unemployment benefits will be able to claim assistance from the first member state in which they were working before becoming unemployed.

"The new rules will improve the functioning of the single market by enhancing the social protection of a high number of mobile workers in the EU such as aircrew members and cross-border self-employed workers," said Milan Cabrnoch MEP, who steered the legislation through parliament.