By 6 July 2019, Italy will have to adopt Directive (EU) 2017/1371 (the “PIF Directive”) on the fight against fraud to the Union’s financial interests and approved on 5 July 2017 by the Parliament and European Council. Upon its adoption, VAT fraud will fall in the list of offences established by Legislative Decree 231/01. According to what is established by the PIF Directive, in fact, legal persons may be held liable for “serious offences against the common system of value added tax (“VAT”)” committed to their advantage or in their interest by top managers. A serious offence, specifies the PIF Directive, is deemed an offence that has transnational characteristics affecting two or more member states within the European Union. In addition, the damage against the financial interests of the European Union, for the offence to be defined serious and thus to lead to a penalty, must be at least in the amount of EUR 10,000,000. Among the penalties established by the PIF Directive there are interdictive as well as monetary penalties. Referring specifically to the prohibition penalties, they include the exclusion from entitlement to public benefits or aid, the temporary or permanent closure of establishments which have been used for committing the criminal offence all way to court-ordered compulsory administration or liquidation of the legal entity. This is a novelty of sure interest that will lead, most of all, to the necessary re-thinking of the MOG231 with subsequent updating. Moreover, this legislative intervention will allow the inclusion in the list of the predicate offences as per Legislative Decree 231/01 those offences that are specifically tax-related, reducing, at least in an abstract sense, in Court, the risk of dangerous case-law interpretations not yet anchored to typical regulatory data.
The Milan Court of Appeal, with judgment no. 2116 of 22 January 2019, reversing the judgment of the court of first instance no. 483/2017 of the Court of Monza, ruled on the validity of the trial period annexed to the employment contract and on the legitimacy of the dismissal served on grounds of failure to successfully complete the trial period.
The Facts
A manager applied to the Court of Monza seeking a declaration of invalidity of the trial period annexed to his employment contract and therefore of his subsequent dismissal, and claiming payment by his former employer of the compensation in lieu of notice and the supplementary allowance.
In the opinion of the Court, the trial period was invalid because the indication of “Sales Director” did not fulfil the requirement of specificity of job duties according to the law, to the point that the manager was unable to understand the elements of the trial period and of the related job duties.
The Court of first instance also remarked that the higher the role of the worker, that is, the more intellectual and not merely executive the job is, the clearer and more specific the indication of the duties must be.
Furthermore, according to the Court of Monza, in the case at hand, a reference to the collective labour agreements cannot make up for the non-specification of the job duties in the individual employment contract, because the former only “contains a mere list of personnel with managerial duties.”
In this context, the court of first instance also found that, for the purpose of the legitimacy of the trial period, the circumstance that the petitioner had previously performed the same duties was irrelevant.
The Court therefore granted the claims of the manager with judgment no. 483/2017. Against the judgment of the Court of first instance, the losing party filed an appeal, asking (i) ascertainment of the validity of the trial period; (ii) declaration of the legitimacy of the dismissal and, as an effect thereof, reversal of the judgment of the Court of first instance including the part in which it condemned the company to pay to the manager the compensation in lieu of notice (in addition to the related welfare contribution) and of the supplementary allowance.
The decision of the Court of Appeal
The Milan Court of Appeal granted the appeal of the employer company, totally reversing the judgment of the court of first instance.
More specifically, the Court of Appeal ruled that, especially in case of intellectual and not merely manual work, the duties should not necessarily be indicated in detail, as it is sufficient that these can be determined based on the wording used in the contract.
According to the Court of Appeal, the employment of a worker as Manager in accordance with the National Collective Labour Agreement for Industrial Managers, and with job title “Sales Director“, were sufficiently clear and specific for the worker to understand the type of duties assigned to him by the company.
Contrary to what had been maintained by the Court of Monza, moreover, the Court of Appeal remarked that the reference to the job duties within the context of the trial period made to the declarations of the National Collective Labour Agreement for the sector is perfectly sufficient to identify with certainty the duties assigned to the respondent.
On this point in fact, the Court of Appeal remarked that, according to the National Collective Labour Agreement for Industrial Managers,
Moreover, the Court of Appeal remarked that in the negotiations preceding employment the company had clarified to the worker that the position proposed was that of “Sales Director“, to develop the company sales policy, as the company had yet to define “its own strategy in terms of search for partners and sale strategies by product types.”
In the general evaluation of the Milan Court of Appeal, relevance has been given also to the fact that the manager had already worked as Sales Director with other companies, and therefore it was highly unlikely that he had not clearly understood the duties assigned to him during the trial period.
Therefore, according to the Milan Court of Appeal, the position of “Sales Director” associated, on the one hand, with the position of “manager” as defined under the National Collective Labour Agreement and, on the other hand, with the type of activities performed, quite precisely defined the duties to be performed during the trial period. Those duties are also consistent with those indicated in the contract, given that, as emerged from the pre-trial assessments, the worker had never complained during the almost 6 months of work about the fact that he had not performed the duties of a “Sales Director“.
The Milan Court of Appeal thus found the trial period fully valid and therefore condemned the manager to return to the company what he had received on the basis of the judgement of the Court of first instance, and to pay the cost of the appeal proceedings.
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With judgment no. 3147 of 1 February 2019, the Court of Cassation remarked that the employers can supplement the grounds for dismissal in the course of proceedings if these are insufficient or generic.
The facts
The Court of Appeal having jurisdiction, upholding the judgment of the Court of first instance, had declared that the dismissal of a manager, namely “Plant Manager“, was legitimate.
More specifically, the Court of Appeal had ruled that:
The manager filed an opposition before to the Court of Cassation against the decision of the Court of Appeal.
The decision of the Court of Cassation
According to the Court of Cassation, the lower-degree courts have correctly interpreted Article 22, National Collective Labour Agreement for Industrial Managers of 1985, evaluating the content of its contractual clause and the relevance attributed by the parties to the lack or incompleteness of the grounds of dismissal, a relevance that can be appreciated by reading the entire provision.
More specifically, Article 22 sets out that “in the event of termination of permanent employment, the terminating party must serve a written notice thereof to the other party. In the event of termination on the part of the employer, this is obligated to specify at that time the reason thereof. If the manager believes that the reason given by the company is insufficient, or if this information is not provided at the time of the notice of dismissal, the manager can apply to the Arbitration Court referred to in Article 19 (…).”
According to the Court of Cassation, the judges of the lower courts have rightly explained that:
In detail, the Court of Cassation, confirming its previous approach, remarked that a manager’s dismissal should be considered illegitimate – and consequently the employer obligated to pay the supplementary allowance provided under the Collective Labour Agreement – if this is not based on any reasons or is based on flimsy excuses and therefore untruthful reasons.
In the case at hand, instead, the dismissal had occurred due to the elimination of the position of Plant Manager, in consequence of the reorganization of the company. Moreover, the above dismissal was unavoidable given that, as specified in the notice of dismissal, at the time of the facts at hand there were no vacant positions available for the manager.
The Court of Cassation also confirmed that, in the pre-trial phase, it had been proven that following dismissal no other director had been hired in his stead and that plant management had been taken over by the two figures hierarchically above the dismissed manager.
In consideration of all of the above, the Court of Cassation confirmed the following principle of the law “If the ground of dismissal of a manager has not been given (or it is insufficient or generic) the employer may – in observance of the principle of cross-examination pursuant to Article 19 (3) of the aforementioned National Collective Labour Agreement for Industrial Managers – make it explicit (or supplement it) within the context of arbitration proceedings; in addition, where the manager elects – in observance with the principle of alternation of available guarantees in labour disputes – to directly apply to an ordinary court of law – the same rights should be recognized to the employer in the course of the legal proceedings.” Otherwise, according to the Court of Cassation, the position of the employer would be compromised as an effect of an autonomous and unquestionable determination of the counterparty.
With judgment no. 4670 of 18 February 2019, the Court of Cassation maintained that the controls requested by the employers of an investigation agency are legitimate if the investigation concerns the control of behaviour that could be criminally relevant or fraudulent actions capable of damaging the employer.
The facts
A company active in the food industry had found out through a private investigation agency that on 22, 23 and 24 December 2014 and on 22 and 23 January 2015 and 5 February 2015, one of its own employees, instead of assisting a family member in relation to whom the worker had requested use of the leave allowed under Article 33 of Law no. 104/1992, had instead been busy with other personal activities (in places of business and other places, in any case not the one in which the assistance activities should have taken place).
The company had therefore started a disciplinary procedure against the employee, at the end of which it had served a notice of termination from employment for cause.
The worker had applied to the labour court for a declaration of unlawfulness of the dismissal in question and application of all the legal consequences resulting therefrom.
Even though the Court had excluded from the disciplinary measure the days of 22, 23 and 24 December given that the company had decided to suspend all work activities during the Christmas Holidays, it rejected the claim of the worker, declaring the dismissal legitimate.
The worker then filed a complaint before the Court of Appeal having jurisdiction pursuant to Law no. 92 of 2012, claiming also that the investigation agency was not licensed to carry out the investigations.
The Court of Appeal had upheld the judgment of the court of first instance and, in particular, had declared the dismissal legitimate, on the basis that the investigations aimed at the ascertainment of an improper use of the leaves pursuant to Law no. 104/1992 did not concern the performance of work activities. This is so because the investigations had been carried out during non-working hours and during suspension of the primary obligation to perform.
The court therefore ruled that the findings of the investigations and the first-hand testimony of the investigators were admissible, and that the argument of the agency not holding a license issued by the Prefecture had come too late.
In conclusion, the Court found that the worker had misused the right under Article 33 of Law no. 104/1992, betraying the confidence placed in the employee and constituting such a reproachable behaviour that the measure adopted was justified, even in the absence of other previous disciplinary measures.
The worker therefore filed an appeal before the Court of Cassation against the judgment of the Court of Appeal.
The ruling of the Court
The Court of Cassation upheld the decision of the Court of Appeal having jurisdiction and:
According to the Court of Cassation, the activities of the investigation agencies – in order to be lawful – should not extend to the work activities in the strictest sense. Indeed, under Article 3 of the Workers’ Statute, this is the direct responsibility of the employer and its collaborators. Therefore, the actions in question are justified not only because of the occurred wrongdoing and of the need to assess its nature, but also in the event of a mere suspicion or hypothesis that wrongdoings are being committed (see Court of Cassation no. 3590 of 14 February 2011; Court of Cassation no. 848 of 20 January 2015).
According to the Court, neither the principle of good faith nor the prohibition of remote controls referred to in Article 4 of the Workers’ Statute prevent the above, given that the employer can autonomously decide how and when to carry out the controls, including secretive controls, and given that the worker is obliged to act diligently while the employment contract is in force (see Court of Cassation no. 16196, 10 July 2009). This is so because the conduct of the worker:
Conclusions
In brief, it follows from the judgment at hand that the employer can legitimately hire an investigation agency to verify if during the periods of leave from work, on grounds of assistance to a family member, the worker performs other activities and, in the event of evidence in this sense, it can legitimately proceed to the dismissal of the worker.
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https://www.delucapartners.it/en/news/2017/employers-can-hire-a-private-investigator-to-make-sure-that-the-leaves-envisaged-in-law-no-10492-are-not-improperly-used/
Ascertainment of breaches of discipline by private detectives
Article 2 (31) of Law no. 92/2012 (so-called Fornero Law) introduced the payment of a fee by the employers, in relation to each worker dismissed from permanent employment, in all cases that, regardless of the contribution requirement, qualify for the ASPI unemployment allowance (presently, NASPI). The amount due is equal to 41% of the NASPI’s maximum monthly amount for each year of seniority in the last three years (so-called “Termination fee“). In regard to 2019, in Circular Letter no. 5/2019, INPS has set out that the salary to be used for the calculation of the NASPI unemployment allowance is equal to Euro 1,221.46. Therefore, the companies that dismiss a worker in the current year must remit to INPS a termination fee equal to Euro 500.79 (41% of Euro 1,221.46, as opposed to Euro 495.34 of 2018) for each year of seniority accrued by the worker, up to the maximum amount of Euro 1,502.36 (as opposed to Euro 1,486.02 in 2018). According to INPS Circular Letter no. 44/2013, the Termination fee must be paid within the 16th day of the second month after the end of the month in which the termination of employment has occurred. The 2018 Budget Law introduced amendments to the legislation governing the fee in case of collective layoffs, setting forth a higher percentage for NASPI maximum amount for each year of seniority in the last three years, from 41% to 82%. Therefore, in the event of collective layoffs, the 2019 fee is equal to Euro 1,001.59, up to the maximum amount of Euro 3,004.79. The amount as provided for by Article 2 (35) of the Fornero Law is multiplied by three in the event of collective layoffs without agreement with the trade unions.
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