French legal moves against NetJets Europe gathering pace

 - July 28, 2011, 8:25 AM

More than four years after some French executive charter operators began voicing concerns about the legality of NetJets Europe’s operations in that country, the trial of the fractional ownership operator started in earnest on June 23 in Bobigny, near Paris. The main charge is “dissimulated work,” as the plaintiffs and the prosecutor allege that a number of NetJets pilots should have been employed under French (as opposed to other European countries’) job contracts. NetJets asserts it is complying with “European rules.”

THS, a Lyon-based operator, filed a formal complaint in 2008. That year, according to NetJets, 19.3 percent of aircraft movements flown by the company’s 156 French pilots originated or ended at French airports. Since 2007, they had been working under UK job contracts. Before that they were employed under contracts that complied with Isle of Man laws (which differ from those of the European Union). They now pay their income taxes in Portugal, NetJets confirmed.

The prosecutor is seeking a €120,000 ($170,000) penalty against NetJets, saying there is ample evidence to support the claim that NetJets has a stable and permanent business performed by French residents. According to Jean-Baptiste Vallé, president of air charter operator lobby Scara, 56 NetJets aircraft regularly stop overnight in the country.

In addition to Scara and THS, plaintiffs are two pilot trade unions (SNPL France Alpa and Unac), French social security organization Urssaf and crew retirement fund CRPN. Vallé said Scara has requested compensation of €50,000 ($70,000). Urssaff and CRPN are seeking damages, too, for a combined amount that exceeds €12 million ($17 million).

NetJets contends that it “complies with European rules on social security and worker representation” and claims it has not violated any law. However, a search on the European Commission’s website suggests that while member states have bilateral agreements on social security there is no indication of any harmonization or Europe-wide standard. Vallé said the Commission had validated the fact that the French judicial system is suing NetJets.

NetJets Europe maintains that it adheres to the Rome Convention for international workers. This convention allows the parties to choose which country’s law is applicable, while guaranteeing workers’ rights, a spokeswoman told AIN. NetJets chose the UK because British crews, customers and flights are the most numerous in the firm’s operations, she said.

Last year budget airline Easyjet was convicted of “dissimulated work” in similar conditions and has since filed an appeal to avoid paying a fine and massive damages. Another low-cost carrier, Ryanair, is also facing the prospect of a trial for “dissimulated work” in France. In NetJets’ case, the Bobigny court is slated to issue its decision on October 25.