Is A Parent Company Liable For Its Subsidiary's Employees?

Parent companies need to be aware of their potential duty of care to the employees of their subsidiaries. The Court of Appeal has recently held that, in certain circumstances, a parent company will have a duty of care to, or be assumed to have responsibility for, the employees of its subsidiary and this assumption can be made without needing to the lift the corporate veil.

In Chandler v Cape plc [2012] two companies based on the same site shared a group medical advisor. The employee in question contracted an industrial illness from working for the subsidiary but could neither claim against the subsidiary which had employed him, as it had been dissolved, nor claim under the employer's liability insurance due to a specific exclusion. The Court felt that it was appropriate in these circumstances to impose upon the parent company a duty of care and responsibility for the health and safety of its subsidiary's employees. The Court specified that the duty would be imposed on a parent company where the business of parent and subsidiary companies are the same in a relevant respect, the parent has or ought to have superior health and safety knowledge in relation to the particular industry, the...