Corporate groups and joint employer liability: the conditions for co-employment even in the absence of fraudulent intent 

Judgment no. 26170 of 25 September 2025, issued by the Italian Supreme Court – Labor Division – falls within a well-established line of case law concerning co-employment (i.e. “codatorialità”) within corporate groups. With this ruling, the Court reiterates the principles for identifying a single employer within multiple formally distinct companies that are nonetheless linked by an economic and functional connection. The decision clarifies that co-employment does not necessarily require evidence of fraudulent corporate fragmentation and may arise even in the context of “genuine” corporate groups. 

The core issue lies in determining whether there is such a degree of integration between the companies’ activities and such promiscuous use of the employee’s work that the employment relationship must be attributed to all entities that effectively exercise employer authority, resulting in joint and several liability (i.e. “responsabilità solidale”) for the obligations arising therefrom. 

Facts of the case 

The dispute originated from a claim brought by an employee who was formally hired by one company but worked as a team leader in the call center of another entity within the same group. Following her dismissal as part of a collective redundancy procedure, the employee filed a claim before the Court of Rome, seeking a declaration of unlawful outsourcing of labor or, alternatively, of an unlawful corporate fragmentation. She sought recognition of an open-ended employment relationship with the company that had benefited from her work (the “substantial employer”). 

The Court of Rome initially rejected the claim, upholding an objection based on external res judicata, arising from an earlier decision (not appealed) that had declared the collective dismissal unlawful and ordered her reinstatement with the formal employer. 

The Court of Appeal of Rome, while amending the reasoning of the first-instance judgment, dismissed the appeal on the merits. The appellate court found that the employee had not demonstrated the necessary conditions for co-employment, such as a unified corporate interest based on fraudulent intent, pervasive interference eliminating corporate autonomy, or promiscuous use of the workforce. The employee then appealed to the Supreme Court. 

The decision of the Italian Supreme Court 

The Supreme Court held the second ground of appeal to be well-founded, concerning incorrect application of the legal rules governing corporate groups and the identification of a single employer. 

Recalling its established case law, the Court reaffirmed that an economic and functional link between companies – for the purposes of identifying a single employer – exists where specific conditions are met: 

a) a unified organisational and productive structure; 

b) integration between the activities of the various companies and a corresponding common interest; 

c) technical, administrative and financial coordination that identifies a single directing entity guiding the companies’ activities towards a common objective; 

d) concurrent use of the employee’s work by multiple companies, meaning that work is performed in an undifferentiated and simultaneous manner for the benefit of several entities. 

The Court emphasised that recent case law has removed the requirement of proving fraudulent intent: co-employment may arise even in “genuine” and highly integrated corporate groups. Where promiscuous use of the workforce is established, the companies involved may be considered joint employers of the same employee. This entails the application of the framework of complex subjective obligations, with joint and several liability pursuant to Article 1294 of the Italian Civil Code. 

The Supreme Court found that the Court of Appeal had incorrectly classified the facts, failing to adequately assess the indices of integration between the companies and the promiscuous use of the employee’s work – both key elements in establishing co-employment. The judgment was therefore quashed and remanded to the Court of Appeal of Rome, in a different composition, for a new assessment consistent with the principles set out by the Supreme Court. 

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