On November 15, 2024, Chamber VIII of the National Labor Court of Appeals ruled in the case “Martínez, Nahir v. Café Seis Hermanos S.A. et al. on Dismissal”, modifying the first-instance decision and extending joint and several liability to the franchisor company for the labor obligations of an employee of the franchisee.
The ruling prioritizes labor law, specifically Article 30 of the Labor Contract Law, which establishes joint and several liability in cases of business transfers or subcontracting of core business activities. This approach prevailed over the regulation of franchise agreements in the Civil and Commercial Code of the Nation, whose Article 1520, subsection 1, states that the franchisor is not liable for the franchisee’s obligations.
This decision reinforces a dangerous jurisprudential trend by expanding the scope of joint and several liability in commercial relationships such as franchises.
