Analyses the legal standing of an employer in a reciprocal, controlling or group relationship.
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Article 101(1) of the Labour Code (hereinafter referred to as the Labour Code) states that "An employee may undertake to provide work to several employers between whom there is a corporate relationship of reciprocal shareholdings, control or group, or who have common organisational structures", in which case "Employers are jointly and severally liable for the fulfilment of obligations arising from the employment contract, the creditor of which is the employee or a third party" (see Article 101(3)).
This contract is subject to written form and must include a set of circumstances, the non-observance of which gives the employee the right to choose the employer to which he is bound (see paragraphs 2 and 4 of the aforementioned article 101 of the Labour Code).
In turn,
Article 334 of the CT states that "For credit arising from an employment contract, or from its violation or termination, which has been overdue for more than three months, the employer and the company with which it is in a reciprocal participation, control or group relationship are jointly and severally liable, under the terms set out in articles 481 and following of the Commercial Companies Code."
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In the case at hand, the Author brought the action against a plurality of Defendants, alleging for this purpose, and moreover, that the Author provided "(...) his activity inherent to his functions to the companies of the Group in an indiscriminate and regular manner since the Author was shared in various departments, including procurement, in which he was integrated) his activity inherent to his functions to the companies of the Group in an indiscriminate and regular manner, since the services were shared in various departments, including procurement, in which the Plaintiff was integrated"; that there was "a total mixture of companies of the same economic group, with the same head office and unitary management, for which, in an indistinct and repeated manner, A. provided his work, his functions"; that "the founding partners/shareholders of all the Defendants are common to each other, with reciprocal shareholdings"; that the "Defendants share the same organisational structure, which is common to all of them, despite recent changes in headquarters, and also identical corporate purpose, which also determined their unitary administration, as well as the provision of services by the Plaintiff in a common manner to all of them, including the Defendants ! !"; that, for these reasons, "the Plaintiff carried out his duties in all these companies, with a view to satisfying all their needs"; and that "(...) these companies maintained an economic relationship of interdependence, at least with regard to their human resources, specifically in relation to the Plaintiff, comparable to the situations provided for under the terms of article 101 of the Labour Code. Article 101 of the Labour Code."
The other Defendants invoked their illegitimacy to be sued, and an order was made finding that this exception had been verified, on the grounds that "the Author configures the material labour relationship in dispute solely with the 1st Defendant, and does not allege any facts that justify the claim by the other Defendants".
Unsatisfied, the Plaintiff filed the respective Appeal.
The Évora Court of Appeal ruled that the Defendants were legitimate parties to the action, namely in view of the provisions of article 334 of the Labour Code, even though not invoked by the Plaintiff.
As the aforementioned judgement shows, "legitimacy is determined by the material relationship as configured by the plaintiff. The plaintiff alleges the factual circumstances that in his view indicate the existence of a plurality of employers, under the terms of article 101 of the Labour Code. He ends by making a claim against them, based on the solidarity regime prescribed in no. 3 of the aforementioned law. Consequently, the entities are legitimate."
But even if this were not the case, "taking into account the alleged situation of a plurality of employers, the regime of article 334 of the CT should always be taken into account", since, quoting the STJ Judgement of 14/04/2021
"According to the widely prevailing doctrine, this is a liability aimed at a guarantee function by extending to assets other than those of the employer the liability for claims arising from the employment contract, its breach or termination...
The law extends liability to other assets in consideration of the increased risks that a company's creditors, especially its workers, may face as a result of its corporate structure.
The multiplication of legal entities and their inclusion in an organisation where they are exposed to an influence that may prove harmful to them and their respective creditors justifies this form of strict liability...
This liability enshrined in Article 334 arises only by virtue of the existence of a certain organisation of companies, without there being any need on the part of the employee to allege and prove any unlawful conduct on the part of the other company which is not his employer..."
Consequently, it upheld the appeal, ordering the case to proceed as regards the Defendants / acquitted in the sanitising order.
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Summary:
"Although the employment contract was entered into with a single entity, the employee can sue, under the terms of article 101 of the Labour Code, a plurality of entities, as employers, if a subjective modification of the contract has occurred, which can occur if from a certain moment onwards, he started to provide work to them, also performing it for other entities, which are in a corporate relationship as required by the aforementioned article.
The provisions of Article 334 of the Labour Code were intended to strengthen the employee's legal position as a creditor, making different legal entities liable for labour claims.
It is up to the employee to invoke and demonstrate the facts that constitute his right, namely the circumstances that imply a subjective modification of the contract, in the case of article 101 of the Labour Code; and the existence of companies that are in a situation of reciprocal participation, control or group, under the terms of articles 481 et seq. of the CSC, in the case of article 334 of the Labour Code."
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