The Constitutional Court’s ruling starts to take effect in proceedings involving dismissals in the context of progressive-indemnity employment contracts [‘contratti di lavoro a tutele crescenti’ in Italian]. In the wake of Order no. 7016, issued by the Court of Bari on 11 October 2018, which applied the Constitutional Court’s ruling even before the grounds had been published, the Court of Genoa is extending the principle expressed in said ruling to provisions that make explicit reference to Article 3 of Italian Legislative Decree 23/2015 by virtue of a constitutionally oriented interpretation.
In particular, with an order issued on 21 November 2018, the Court of Genoa also deemed the aforementioned principle to be applicable to the contracts governed by Article 9 of Italian Legislative Decree 23/2015, namely employment relationships with companies that do not meet the size criteria referred to in Article 18 of Italian Law no. 300/70.
The regulatory and legislative framework before the Constitutional Court’s intervention
According to the provisions of Legislative Decree 23/2015 (so-called progressive-indemnity contracts), in the case of unlawful dismissal (except in specific circumstances), the judge declares the employment relationship to have been extinguished on the date of dismissal and orders the employer to pay indemnity, not subject to social security contributions, equal to double the amount of the last month’s reference remuneration used for the calculation of severance indemnity, applied to a minimum of four and a maximum of twenty-four months.
For companies with no more than 15 employees, the amount of the indemnity provided for by Article 3, paragraph 1, of Italian Legislative Decree 23/2015, pursuant to Article 9 of said Legislative Decree, is reduced by half and cannot exceed the limit of six months.
In July 2018, Italian Decree-Law 87/2018, converted into Italian Law 96/2018 (the so-called Dignity Decree), changed the minimum and maximum indemnity thresholds, increasing them by half without, however, changing the methods used for calculating the compensation, which continued to be linked to the employee’s length of service at the company (two months’ remuneration for every whole year, reduced to one for small companies).
Constitutional Court Judgment 194/2018
With its Judgment 194, filed on 8 November 2018 and published the following 14 November, the Constitutional Court repealed the progressive indemnity mechanism, removing the parameter of double the amount of the monthly remuneration used for the calculation of severance indemnity for each year of service as the only unit of measurement for compensation for unlawful dismissal.
According to the Constitutional Court, the mechanism for quantifying the compensation due under Italian Legislative Decree 23/2015, even in the wording amended by the Dignity Decree, provides for “rigid indemnity, since it is not graduated according to any parameters other than length of service, and makes it the same for all workers. The indemnity thus takes on the characteristics of a standardised, lump-sum payment… to compensate the worker’s loss deriving from his/her unjustified dismissal from an open-term job”.
In the opinion of the Constitutional Court, the calculation of the amount of damages due to unlawfully dismissed workers must, without prejudice to the limits provided for by law, also take account of other criteria, such as those “which can be systematically inferred from the evolution of the limitational rules on dismissals (number of employees, size of the business, conduct and conditions of the parties)”.
The Court of Genoa
With the order issued on 21 November 2018, and by virtue of a constitutionally oriented interpretation of Article 9 of Italian Legislative Decree 23/2015, the Court of Genoa ordered that an unlawfully dismissed employee be paid the maximum possible amount of indemnity, namely six months’ worth. That indemnity was calculated in reference to not just the number of years’ service at the company, but also other criteria such as the moderate size of the company and the high skill level of the worker.
The facts
The Court heard the case of a journalist who was dismissed following a company reorganisation that entailed the elimination of the position that she covered (“external collaborator”) and a redistribution of her duties and responsibilities.
The ruling
Referencing the case-law principle by virtue of which, in cases of dismissal for justified objective reasons based on a need to reorganise the company structure, the judge cannot call into question the choice of management criteria, but can only check the real existence of the reason invoked and its connection to the termination of the worker’s employment relationship (cf., inter alia, Judgments 7474/2012, 15157/2011 and 24235/2010 handed down by the Court of Cassation, employment division), the Court declared the dismissal to be unlawful. This, since “the new editorial plan did not change the situation of the working environment in which the claimant operated at the time of the dismissal”.
In fact, according to the trial judge, the decision to dismiss the claimant was not linked to the new editorial plan or the reasons presented as the grounds for the dismissal. There was therefore a lack of evidence of an effective functional link between the invoked company restructuring and the measure adopted against the worker.
Consequences for the disciplinary framework
Given the unlawfulness of the dismissal – and since the size criteria referred to in Article 18 of Italian Law 300/70 were not met – the trial judge ruled the protection to be afforded to the worker to be that which is provided for by Article 9, paragraph one, of Italian Legislative Decree 23/2015. This, on the assumption that (i) the worker had been hired on 6 December 2016, and therefore after Italian Legislative Decree 23/2015 had entered into force; and (ii) the case in question could not be subject to the rules of the Dignity Decree, since the dismissal had been announced before it entered into force.
Although Article 9 of Italian Legislative Decree 23/2015 has not been brought into question – since it has not been subject to the question of constitutionality – in the Court’s opinion it is inevitable that the effect of the Constitutional Court’s ruling on the application of said Article 9 will be taken into consideration. This, both because this provision directly references Article 3, paragraph one, of Italian Legislative Decree 23/2015 and because the mechanism for calculating the indemnity specified therein is the same, and is based only on the worker’s length of service at the company.
As a consequence, in the Court of Genoa’s opinion – in order to avoid an application in contradiction with Constitutional Court’s judgment no. 194/2018 – one must conclude that the reference to the “amount of the indemnity and the amount provided for by Article 3, paragraph 1, of Italian Legislative Decree 23/2015 must be read in reference to all of the compensation criteria specified in judgment no. 194/2018”.
In application of that constitutionally oriented interpretative solution, not only length of service, but also the size of the company and other contractual aspects, are worthy of consideration. And these other aspects take on particular significance in the case in question because the classification of the worker as an external collaborator affects both the value of the remuneration due to her and her prospects for finding a new job in the journalism sector.
