Joint and several liability in labor matters in Honduras

By: Susan Perdomo

From the labor field, the needs of commerce have generated the creation of schemes for the rendering of services other than the one known as “employer – employee” relationship. These needs of the market have allowed the emergence of other figures such as intermediaries, contractors, and/or outsourcing, including the so-called employment agencies. For this reason, it is important to delimit the liability of each figure by determining in which cases the so-called “joint and several liability” would apply.

The labor joint and several liability refers to those cases in which an employee may exercise his claims or demand against a “subject” as main defendant and a second subject, who becomes called to comply with the same obligation as the first one, due to particularities and characteristics that the same labor legislation points out, being its main objective, that the employee obtains full satisfaction of his rights.

In order to know about the aspects of joint and several liability, it is necessary to conceptualize the subjects of the labor relationship:

  • “Worker” or “Employee”: is any natural person who renders to another or others, natural or juridical, material, intellectual services, or both, through the payment of a remuneration and by virtue of an employment contract or relationship”. The fundamental element, according to the referred concept, is that the work is performed personally and not through a third party.
  • “Employer”: According to a standard definition, it is a natural or legal person, private or public law, that uses the services of one or more workers, by virtue of an employment contract or relationship, which entails that the obligation to pay all social benefits in force in favor of the employee falls directly on him/her.

In an employer-employee relationship, the liability of each one is clearly identified, but when other persons intervene, whether natural or juridical, the scope of the employer’s liability becomes complete, as well as the application of “solidarity“.  Since several decades ago, our legislators saw the need to protect the payment of social benefits of workers precisely when other persons intervene, and it is therefore relevant to understand their differences, as well as their liability to the employee, among which we can point out the following according to our labor legislation:

  1. Intermediary: The International Labor Organization (ILO), in convention number 86 called “Subcontracted Labor”, conceptualizes it as: “a natural or legal person that makes workers available to a user company on a subcontracting basis, without formally acquiring the status of employer of those workers”. We can identify that its main characteristic is that it hires employees in its own name to perform work for the benefit of an employer, i.e., the intermediary is only a link between the employer who requires labor and the workers who require a job. In which case, the employer is jointly and severally liable for the obligations of the employees for the payment of all labor benefits, due to the intermediary’s management. Therefore, the following question arises: When can we identify an intermediary? We can affirm, based on the definition and the elements provided by the referred convention, that it will be when the work performed is carried out without autonomy, that is to say, that this (the intermediary), is only limited to execute the actions emanated through a mandate and consequently all the risks of the execution of the entrusted work are assumed jointly and severally by “the employer”.

It is important to refer to the Central American region, where we find that the legislators attribute to the owners of the work “joint and several liability” in the payment of all social rights arising from the relationship originated between “the intermediary” and “the employee“, this leads to ensure, in favor of the latter, the payment of all his rights and social benefits arising from the contractual relationship.

  1. Contractors: regarding contractors, we find a uniform definition: they are those persons (natural or legal) who contract the execution of one or several works or tasks for the benefit of others, for a determined price, assuming all the risks to perform them with their own means, with technical and managerial freedom, and are considered true employers of their workers, and not representatives or simple intermediaries.

Specifically in the Honduran legislation, we find that, as a general rule, the beneficiary of the work, owner of the work or industrial base, will be jointly and severally liable with “the contractor” for the value of the salaries and the benefits and indemnities to which the employees are entitled, and exceptionally is exempted from such liability, in those cases in which the work performed is outside the normal activity of its company or business. An example applicable to this exception could be the provision of private security guard services provided to a textile company through a contractor company. In this example, we can determine that the purpose of the company is the manufacture of garments and not the guarding service, in which case, the employee who performs the guarding functions can only claim his rights from the contractor, and not from the owner of the work.

  1. Private Employment Agencies: is a natural or legal person, independent from the authorities, that provides services aimed at linking offers and demands for employment. These agencies cannot provide intermediation services and/or contractors, as it is regulated in agreement 141-2012 regarding the Regulation for the Operation of Private Employment Agencies (AEP) and Related Services, reformed by agreement 155-2017, where it is legalized to charge up to a maximum of 50% of a salary to the job seeker.

Frequently, we can find the companies called “outsourcing” which will respond to the employees and/or employers or owners of the work as “intermediaries” or “contractors”, depending on whether they meet the requirements or elements detailed in paragraphs 1) and 2) above.

Likewise, we consider that it is of utmost importance to point out that many countries have implemented regulations with the purpose of protecting the rights of workers arising from an employment relationship, in the case of the Republic of Chile, specifically in Article 183 of the Labor Code, which states that “the main company shall have the right to be informed by the contractors about the amount and state of compliance with the labor and social security obligations that correspond to them with respect to their workers, as well as the same type of obligations that subcontractors have with their workers. Contractors shall have the same right with respect to their subcontractors, which must be evidenced by certificates issued by the Labor Inspection, and if compliance with labor obligations is not evidenced, the main company may withhold any amount owed to the contractor or intermediary, in order to comply with the outsourced labor obligations by paying the worker by subrogation”. However, taking this example, our Central American legislation has not yet issued regulations of this nature, however, the main companies or owners of the work, before potential claims for being jointly and severally liable, must agree from the civil sphere the obligations and rights that according to their operation are necessary to safeguard their patrimony before an execution for being considered jointly and severally liable.