Ryanair has been ordered to pay €8m in damages and interest for breaching French labour law.
A court in southern France awarded the damages after ruling that the airline had illegally given locally based staff Irish contracts in order to save money on payroll and other taxes.
It ruled against Ryanair over non-payment of social insurance and state pension contributions in France, saying employees of foreign airlines living in France come under French social security and tax law.
Ryanair had argued that because its pilots worked in Irish-registered jets, it should be permitted to pay these charges in Ireland rather than France.
Ryanair chief executive Michael O'Leary said he was abiding by European law because his workers were "mobile" and worked on "Irish-registered aircraft defined as Irish territory".
However, the court in Aix-en-Provence ordered the airline to pay €200,000 in fines, in addition to damages including €4.5m of backdated social charges, €3m in pension contributions and €450,000 in unemployment charges.
In a statement, Ryanair said it would appeal the ruling.
"Since all of our people operating to or from Marseille between 2007 and 2010 have already paid their social taxes and pension contributions in Ireland, in full compliance with Irish and EU regulations, we do not believe that Ryanair or our people can be forced to pay these contributions a second time in France," the airline said.