Fixed term employment contract – Disregard of legal personality

In the case under consideration, the employee entered into a number of fixed-term employment contracts with three companies, always receiving orders and instructions from the same person, who, incidentally, was the person who had hired him, signed the three employment contracts on behalf of the employer and who informed him of the termination of those contracts, signing the corresponding written notices.

In light of these facts, the Supreme Court of Justice considered that the autonomy and legal individuality of the employer companies should be disregarded, since it was proved that the same used the legal personality abusively, and there were signs that indicated the intention to fraudulently evade the law.

To support such decision the Supreme Court considered that the three employer companies were used as an instrument to conclude with the employee a sequence of fixed term employment contracts thus avoiding the conversion of these contracts into open ended contracts, consequently eliminating the rights of the claimant that would arise as a result of such situation, in particular in terms of seniority and seniority payments, as well as in terms of job security.

Accordingly, the Supreme Court of Justice, based on the facts deemed proven, seeking the unification of the employment relations established between the employee and the three employer companies and in order to avoid the sidestepping, through the contrivance of the succession of contracts, of the enforcement of mandatory provisions, in particular of time limitations and the prohibition of the succession of fixed-term employment contracts, decided to the disregard of the legal personality.

In the case under consideration, the facts proven provided evidence of the execution and termination of fixed-term employment contracts with the employer companies, which objectively established, at least from the legal – formal standpoint, complete autonomy of the successive employment relations established between the employee and the employer companies, for which reason, resorting to an analogy with the system of multiple employers, the Court considered that the employer companies were jointly and severally liable for the employment claims of the employee.