Co-employment and belonging to a group: an autonomous logic (two rulings)

Belonging to a group is not enough to establish co-employment… but the absence of a group is not enough to rule it out either!

Two rulings handed down by the French Supreme Court on 12 May confirm that the concept of co-employment follows an autonomous logic, distinct from the mere capital structure of companies and their belonging to a group.

Since 2020, co-employment may be recognized in two situations:

• the existence of an employee-employer relationship (lien de subordination) between the employee and the company designated as co-employer; or

• the existence of a "permanent interference" by the alleged co-employer in the economic and social management of the employer, leading to a "total loss of independent decision-making" by the latter.

These two decisions illustrate the distinction between belonging to a group and the characterization of such a situation of co-employment through "permanent interference":

1. First case (n° 24-22.174) — the court of appeal had ruled out co-employment on the ground that, absent a group, there could be no interference by company A in the economic and social management of company B leading to a total loss of independent decision-making by the latter:

• "company A […] is not a shareholder of company B";

• "the two companies, which describe themselves as sister companies in some of the contracts linking them, do not present themselves as parent and subsidiary";

• "no evidence produced [makes it possible] to establish that they are united through the control or influence of a dominant company";

• "companies A and B are distinct from one another in terms of consolidation of accounts, no equity link [exists] between them […] they could not constitute a group within the meaning of Articles L. 2331-1 et seq. of the French Labor Code".

The French Supreme Court sets aside the ruling: the status of co-employer is not conditional on the companies belonging to the same group.

2. Second case (n° 24-19.771) — the existence of a group was established, and the employee argued that his employer's parent company was a co-employer:

• human resources management was "largely taken over by the staff" of the parent company (e.g. an employee of the parent company handled the employee's forfait-jours meetings and had signed his dismissal letter);

• the employee reported hierarchically to the parent company's chief administrative and financial officer;

• the documents produced reflected "the authority exercised" over the employee by a director of the parent company.

These factors, however, which fall within the normal functioning of a group, were not sufficient to establish the existence of a "permanent interference" leading to a "total loss of independent decision-making" by the employer.