Are you sure it isn't working ? This code with slight modification to yours is working.
<?php
session_start();
$groupname = "test";
echo $groupname;
?>
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" />
<script type="text/javascript">
var menu1=new Array()
menu1[0]='<a href="employercp.php">Job Portal</a>'
menu1[1]='<a href="cggroup.php?id=<?php echo $groupname; ?>">Groups</a>'
document.write(menu1[0] + menu1[1]);
</script>
I believe $groupname is empty in your case. :-/