Recently the Third Federal Circuit Court on Labor matters of the First Circuit issued a mandatory legal precedent I.3o.T. J/28 (9a) titled: "Civil professional services contract. If through this contract a third party is obliged to provide personnel to an actual employer undertaking to exempt the latter from any labor obligations, both corporations integrate the economic unit referred to by Article 16 of the Federal Labor Law and, accordingly, both entities are responsible for the employment relationship with the employee". This precedent establishes as criterion that when a personnel-supply agreement is in effect and an entity (either an individual or a corporation) provides structure and capital, an economic unit of goods and services production is constituted.
What the law says
Accordingly, the Third Federal Circuit Court determines that for purposes of Article 16 of the Federal Labor Law, an economic unit exists, when there is a legal action, regardless of its origin, in terms of which one party supplies the personnel and the other party provides the infrastructure and the economic resources.
Actions to consider
In our opinion, this criterion wrongfully interprets legal concepts such as joint liability and economic unit, whereupon, considering that it is a mandatory court precedent created by the repetition of identical precedents, Labor Authorities may determine that companies (and/or individuals) that administer their personnel through third parties are jointly liable.
By means of an adequate administration of the personnel, review of the contracts with third parties, responsible management of labor obligations and labor litigations, we are of the opinion that there exist legal structures to assist in reducing these types of risks.