- The full Social Chamber of the Supreme Court declares an employment relationship between the members of the Servicarne cooperative and the meat companies where they work.
- The ruling abandons the 2001 doctrine and finds fraud of law: the cooperative only supplied labour.
- It calls for a review of any outsourcing through cooperatives or contractors with little organisation of their own.
On 26 September 2024 the Supreme Court released a ruling of the full bench of its Social Chamber on the worker cooperative Servicarne. It declares that there is an employment relationship between the cooperative’s members and the meat-industry companies on whose premises they work. It thus resolves the appeals of the Social Security General Treasury and the trade union CCOO against a ruling of the High Court of Justice of Navarre. The ruling is of interest beyond the meat sector, because it addresses a model of work organisation, the cooperative that provides services to third parties, which can arise in any activity.
The decision breaks with the doctrine the Supreme Court had maintained since 2001, which rejected the existence of an employment contract between the member of a cooperative and the company that hired it. It also unifies the previously divergent criteria of the regional high courts. The conclusion on how the cooperative operated was reached with two judges dissenting.
What the cooperative did
According to the Court’s press note, Servicarne assigned to the plants the number of members needed according to the volume of services contracted. Those members cut and handled meat products and, in some cases, acted as supervisors or foremen. They worked with the meat company’s premises, tools and equipment, and the company also provided knives, clothing and protective gear and invoiced them to the cooperative, together with a rented office.
The cooperative’s only infrastructure was an office in Barcelona, and it operated in the same way in all its contracts with the industry. For the Supreme Court, this shows it had the form of a cooperative but its real activity was limited to supplying labour, without the material means that a genuine worker cooperative needs to organise and pool its members’ work. That is why it finds fraud of law. In that context, belonging to a cooperative did not change the day-to-day reality of the work: the one providing the setting and the means was the meat company.
Subcontracting without lending workers
The message concerns any sector that outsources services. Subcontracting is lawful when the contractor has its own business organisation, brings its own means and bears the risk of its activity. When it merely places people at the client’s disposal, working in the client’s premises and under its instructions, employment law allows the real employer to be the one who receives the work, with the consequences that follow. This distinction, which the Workers’ Statute reflects in regulating subcontracting and prohibiting the unlawful assignment of workers, is not new; what the ruling adds is its application to a worker-owned cooperative.
The Court’s note does not detail specific economic effects, such as unpaid wages or contributions, or the scope for other cases. But it makes the criterion clear: legal form, whether cooperative, company or other, is not enough if what exists in reality is a transfer of workers. Each case will depend on its facts, so the ruling is a reading guide, not an automatic rule.
What to review
If your company contracts services performed on its premises, review who directs the work, who provides the means (tools, equipment, uniforms), who sets schedules and shifts and what structure the contractor has of its own. A well-drafted contract does not replace a reality that contradicts it, and courts look at reality.
It is also worth examining the contractor’s background: its registered office, its management staff, its client portfolio and its dependence on you. If most of its activity is concentrated in a single client or its members always work on someone else’s premises, it is worth seeking advice before renewing the contract. This information is general and each case requires its own analysis. And if contracts are already in force, it is better to plan an orderly review than to correct under a Labour Inspectorate request.
Subcontracting is legitimate; lending workers under another name is not.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
