OD Flash | Co-employment: a company bound to another by an operating contract cannot be deemed a co-employer in the absence of interference in the economic and social management of the other company and the preservation of its autonomy of action.

Court of Cassation, Social Division, October 9, 2024, n° 23-10.488, Published in the bulletin.

Under the article L.1221-1 of the French Labor Code, a company within a group may be classified as a co-employer if there is a persistent interference by this company in the economic and social management of the employing company, leading to a complete loss of autonomy of action. In this decision, the French Supreme Court addresses the case of a company linked to another by an operating contract.

In this instance, Française des Jeux, in order to distribute its products, collaborates with intermediaries with the status of broker-agents. These intermediaries are linked to Française des Jeux by an operating contact.

Employees of these intermediaries filed a claim with the labor tribunal in July 2012, seeking recognition of a direct employment relationship with Française des Jeux and its liability for back pay. In a 2019 judgment, the labor tribunal ruled that Française des Jeux and the two companies held the status of co-employers of the employees from 2012 to 2018. The condemned companies appealed this decision. Française des Jeux argued it was not the employer of the employees, and the acquiring companies requested to be dismissed from the case for periods prior to the takeover of employee activities.

The Court of Appeal held that Française des Jeux was neither the employer of the employees from 2009 to 2012 nor a co-employer with the employing companies of the employees from 2012 to 2018.

Judges found that the documents presented by the employee did not establish a subordination link between Française des Jeux and the employees. Furthermore, the dominance of one company over another is accepted without characterizing co-employment, as long as it does not lead to persistent interference by the former in the economic management of the latter.

The employees appealed to the French Supreme Court, arguing that co-employer status should be recognized. To support their claim, they pointed out that the intermediaries conducted their business using equipment exclusively provided by Française des Jeux, which set commercial priorities, determined intermediaries’ schedules, set targets monitored weekly, imposed guidelines for each retailer, and provided their training.

The French Supreme Court upheld court’s judgment. It stated that “absent a subordination relationship, a company can only be classified as a co-employer of personnel employed by another company if there exists, beyond the necessary coordination of economic actions between them and the state of economic dominance that their commercial relationship may create, persistent interference by this company in the economic and social management of the employing company, leading to a total loss of autonomy of action for the latter.”

The mere fact that the intermediaries must comply with the commercial policy contractually defined between their employer and Française des Jeux does not constitute a confusion of management. The Court emphasized the absence of involvement by Française des Jeux in recruitment, dismissals, salaries, bonuses or commissions, social security schemes, or career progression.

The French Supreme Court thus reiterates that the lack of interference by one company in the economic and social management of other companies and the preservation of these companies’ autonomy of action indicate the absence of co-employer status, even outside a corporate group context. Consequently, this decision aligns with existing case law in this area, which defines as the criterion for co-employment the confusion of management, interests, and activities manifested through abnormal interference in the social and economic management of a company (Cass. Soc., November 25, 2020, n° 18-13.769).