AT THE INTERSECTION OF CORPORATE AND EMPLOYMENT LAW: PRINCIPAL EMPLOYER – SUB-EMPLOYER RELATIONSHIPS AND LEGAL RISK MANAGEMENT – 3. The Concept of "Joint Employment" in Groups of Companies (Holdings), Organic Connection and Standing

Where legal entities within a group of companies deploy labour on joint projects, or where personnel are rotated between companies connected by an organic link, this gives rise to the concept of "joint employment" (co-employership), an institution legally distinct from the principal employer–sub-employer relationship.

Being under the same holding umbrella, having similar shareholding structures or sharing the same trade registry address are not on their own regarded as sufficient to establish joint employment; the actual working conditions and the manner in which the chain of command is configured are of great importance. In the case law of the Court of Cassation, a finding of an "organic connection" alone does not suffice to establish joint employment.

Factors such as the worker devoting their labour simultaneously or successively to more than one group company, personnel management being conducted from a single centre, the worker in fact working on behalf of another group company rather than the company on whose official payroll they appear, and a chain of command being established in respect of more than one company, are assessed together.

Where these factors are found to be present together, the worker may be regarded as jointly employed by more than one group company, and the liability of those companies for labour claims may arise.

As a result of such a finding, since more than one group company may become liable for the worker's claims, a defence that only the company appearing on the payroll is the employer may not be sufficient. This can increase the number of companies that may be held liable for the recovery of the worker's claims.

Although the evidentiary dimension of this process rests largely on witness statements, electronic evidence has come to the fore in today's corporate litigation.

Email correspondence on shared domains between group companies, instructions passing directly from holding senior management to the worker, or the worker signing commercial documents on behalf of another company on whose payroll they do not appear, are treated by the courts as indicia of an actual working relationship. In this assessment, attention must be paid to whether the worker worked for the companies simultaneously or in successive periods.

Where the work is simultaneous, joint and several liability arises for all the companies; in successive transitions, the rules on transfer of the workplace and the limitation periods operate separately for each company.

Conclusion for Companies: Personnel mobility between group companies brings legal and financial risks with it. For the defence that "we are separate legal entities" to hold good in any future dispute, it is essential that inter-company service agreements, financial settlements and the personnel chain of command be clearly separated.