With Order no. 26697 of 21 September 2023, the Italian Court of Cassation ruled that an employer can deny holidays requested by a worker to avoid exceeding the limit of the job retention period only in the event that there are actual and genuine obstacles.
The worker’s illness and the job retention period
Under Articles 32 and 38 of the Italian Constitution the right to health is elevated to a constitutionally guaranteed right. On their basis, Article 2110 of the Italian Civil Code provides that a worker who is absent due to illness has the right not only to retain his or her job, but also to the payment, when provided for by law or by collective bargaining, of remuneration or allowances to the extent and for the time determined by special laws, by corporate rules, by custom or according to equity (the so-called ‘job retention period’ (‘periodo di comporto’)).
Only once this period has elapsed may the employer legitimately withdraw from the employment contract for exceeding the job retention period under Article 2118 of the Italian Civil Code, i.e. by granting the employee notice or the compensation in lieu thereof.
Thus, Article 2110 of the Italian Civil Code achieves a balancing act between conflicting constitutional rights, both of which are considered worthy of protection: the employee’s right to health and to keep his or her job and the employer’s right to freedom of private economic initiative.
Compatibility between holidays and illness: brief case law overview
The right to an annual period of paid leave is a constitutional principle, enshrined in Article 36, paragraph 3, of the Italian Constitution, which confirms that it is a right that cannot be waived: “The worker has the right… to paid annual leave, and cannot waive it”.
Applying the above-mentioned constitutional principle, Article 2109 of the Italian Civil Code states that:
– how holidays are taken is determined by the employer, taking into account business needs and the employee’s interests;
– the employer must notify the employee in advance of the period fixed for the taking of the holiday;
– the notice period cannot be counted as holiday time.
It follows from the above that the right to take leave is imposed by mandatory rules, including those of constitutional importance, which are aimed at protecting the person, personality and dignity of the worker.
The purpose of taking leave is, in fact, to allow the recovery of psycho-physical energy and the full expression of the worker’s personality during the enjoyment of free time.
There are, however, frequent cases in which a worker absent due to illness and unable to return to work at the end of the job retention period, requests that his or her right to retain his or her post be extended for a further period equal to that of the accrued and untaken leave at that date.
In this scenario, the employee’s interest in the enjoyment of the holiday period is, therefore, disconnected from recovery of psycho-physical energy (because it is clear that the sick employee will not be able to enjoy any recovery during the illness: on this point Italian Constitutional Court, judgment no. 616 of 30 October 1987), and is linked, according to well-established case law, to job retention.
Therefore, in such cases, the question arises as to whether the sick employee is actually entitled to be formally placed on leave in order to suspend the accrual of the job retention period and thus avoid dismissal.
The case law of the Italian Court of Cassation, in resolving the question, has oscillated over the years between solutions that are more or less advantageous for the employee.
The most recent guidance had denied the employee this right, affirming, on the basis of the principle that it is not possible to change the grounds for absence from work, the lawfulness of dismissal for exceeding the job retention period, with the employee being entitled only to compensation in lieu of notice (Italian Civil Court of Cassation, Employment Division, no. 5294, 29 September 1998; Italian Civil Court of Cassation, Employment Division, no. 5504, 30 October 1983).
However, after the Constitutional Court’s ruling no. 616 of 30 December 1987, in which the Constitutional Court judges declared Article 2109 of the Italian Civil Code constitutionally unlawful for being in conflict with Articles 3 and 36 of the Italian Constitution, insofar as it did not provide that illness arising during the holiday period would suspend the job retention period, and deferred to the legislature and collective bargaining the definition of detailed regulations to actually implement the principle established therein, the Italian Supreme Court of Cassation reached the opposite conclusion.
A questionable interpretation of the Constitutional Court’s judgment had, in fact, led the Italian Supreme Court to hold that there was a principle of automatic conversion of sick leave into holiday leave. This was on the basis of the “principle that the job retention period, for the purposes of Article 2110, second paragraph, of the Italian Civil Code, is interrupted by the request to take the holiday period, which the employer must grant even during the employee’s illness, implies, in the event that the abovesaid request – submitted within the maximum period of the total job retention period, in the case of intermittent illness – is not granted, that the expiry of the job retention period itself moves to the expiry of the employee’s accrued and untaken holiday days; for this purpose, the temporal coincidence of the single episode of illness with the request to take leave is not relevant, and the operation of the principle cannot be considered to be limited to the days of absence immediately following each request and for the period corresponding to the duration of the leave accrued at that time”. (Italian Court of Cassation, Employment Division, 6 June 1991, no. 6431; Italian Court of Cassation, Employment Division, 30 March 1990, no. 2608; Italian Court of Cassation, Employment Division, 11 March 1995, no. 2847; Italian Court of Cassation, Employment Division, 15 December 1994, no. 10761).
Consequently, the job retention period could also be interrupted as a result of the employee’s request to use the holiday period, with the employer being obliged to accede to that request even during illness.
The application of this criterion aroused enormous perplexity on the part of interpreters, who pointed out its incompatibility with the framing of the leave system outlined by the Italian Constitutional Court itself in 1987, as an instrument aimed at the reinstatement of the worker’s psycho-physical energy consumed during the work period, a recovery, evidently, irreconcilable with the state of illness.
Hence, therefore, an inevitable shift in case law aimed at setting the limits and conditions of access to the benefit of conversion [of the job retention period to leave], through a balancing act between the employee’s need for job retention and the employer’s interest in job performance.
According to what now appears to be a well-established guidance, a worker absent on sick leave and unable to return to work does not have the unconditional right to substitute accrued leave for sick leave as a reason for his or her absence, in order to block the running of the job retention period; on the contrary, it is the employer, adhering, in determining the holiday leave, to the guidelines requiring the reconciliation of business needs with the needs of the employee, who must take into serious consideration the employee’s request and his or her interest in avoiding losing his or her job through the expiry of the job retention period.
On this point, it should also be noted that the employer’s obligation to consider granting leave to an employee during a period of illness only arises if there is a specific request to take it.
It must be the employee, absent due to illness and unable to work, and wishing to avoid the loss of his or her job due to the expiry of the job retention period, who must submit the appropriate application, to allow the employer to assess the applicant’s fundamental interest in keeping his or her job (Italian Civil Court of Cassation, Employment Division, 27 February 2003, no. 3028).
As repeatedly affirmed by the Italian Court of Cassation, the specific interests of individual workers can be taken into account by the employer in determining the period of holiday entitlement only if they are brought to the employer’s attention. The potential conflict between holiday entitlement and illness therefore requires that the sick employee’s holiday entitlement can only be considered if he or she has submitted a specific request to that effect, from which his or her overriding interest in preventing the end of the job retention period is apparent.
The facts of the case and the outcome of the proceedings on the merits
The matter originated from the dismissal of a worker for exceeding the job retention period. The worker challenged the dismissal by providing evidence that she had asked the employer, with a communication sent and received by the company before the job retention period for the position had expired, to use accrued and untaken holidays.
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