In a recent case, the French Cour de cassation stated on the concept of co-employment which, if characterized, implies a joint liability between the parent and its subsidiary company towards employees (Cass., Soc. 25 Nov. 2020, n° 18-13.769). 

In this case, company X, which was taken over in 2010 by a Japanese group, had dismissed its employees for economic reasons in 2012 because of the cessation of activity. The employees contested the dismissals and claimed damages from the company X, but also from its parent company because of its quality of co-employer. The Court of appeal upheld the employees’ claims considering that company X delegated to its parent company, that HR management and that company’s administrative management was assured by a subsidiary and that the parent company had taken over company X’s assets for its benefit and its subsidiaries’ benefit under disadvantageous conditions for company X. 

Within the appeal filed by the parent company, the Court de cassation rules on the concept of co-employment given by the precedent case law which required a confusion of activities, interests and direction, and an interference of the dominant company in economic and social management of the dominated company (Cass., Soc. 2 July 2014, Molex, n. 13-15.208 à 13-21.153). In this case, the Cour de cassation ruled out the existence of co-employment by specifying the two necessary conditions to qualify such situation : first, a permanent interference of the dominant company in economic and social management of the employing company and secondly, the total loss of autonomy of action of the dominated company. 

With this new case law, the characterization of co-employment becomes more difficult and unusual because of the strict conditions required. Furthermore, we draw your attention on the fact that in the international context a constant French case law submit the qualification of co-employment to the contract law, chosen by the parties, regardless of the law of the place of execution of the work, even if it is executed in France. Thus, the choice of applicable law can be a strategic issue not to be overlooked during the conclusion of an international employment contract.