The French Supreme Court has extended the employer's responsibility of the mother company over the employees of a subsidiary to certain cases of confusion of interests, activity and management.
In a decision dated 2 July 2014, the French Supreme Court ruled that (in cases where there is no hierarchical relationship) the mother company can be recognized as the co-employer of the employees of its subsidiary in case of confusion of interest, activity and management exceeding:
- necessary coordination of economic actions between companies belonging to the same group and
- the economic dependency which may result therefrom.
As the conditions of co-employment seem more strictly ruled, we believe co-employment is less likely to be acknowledged by the courts.
If co-employment claims fail, employees may be tempted to argue that the mother company should be held liable for the damages caused to them due to the decision it made and which led to the collapsing of the subsidiary (French Supreme Court, 8 July 2014).
This article is part of the Southern Europe Employment Law Update for December 2014