Legal Updates

Employer Identity is reviewed under a set of material tests and not according to an agreement

February 10, 2020
Print

A cleaning services company hired employees through an employment agency and did not pay them their rights.
The Labor Court held that the companies are deemed to be joint employers and both are liable for the debts to the employees. When reviewing labor relations in a triple employment structure, the true employer identity is checked by a material examination of the relations between the parties, including the question of whether the relationship is authentic or intended to avoid employer's obligations. Thus, for example, one should check who hires the employee, who supervises the employee, who places the employee in the workplace, who determines the terms and bears the payment and who is authorized to terminate the employee. Here, the labor relations structure was not authentic, because the contract between the companies was a losing contract, the paychecks provided by the employment agency were fictitious and the whole relationship between the companies was an attempts to avoid payment of rights. Indeed, the employees were hired by the employment agency and it was also the one who paid them their wages, but the cleaning company was the one who supervised their work, gave them the uniforms they wore, and set their work shifts. Thus, the companies are jointly obligated to pay the rights of the employees.