Non-performance exception: when does the employee’s refusal to comply justify dismissal?

By order No 770, of 12 January 2023, the Italian Court of Cassation ruled on the lawfulness of dismissal for just cause of a worker who, as part of her work performance, had not complied with the performance procedures set out in a specific company policy.

According to the Supreme Court, with regard to dismissal for just cause, the employee’s refusal to perform the services in the manner indicated by the employer is sufficient to justify dismissal for just cause, unless such refusal is based on good faith.

The facts of the case

In the case dealt with in the order in question, the worker – a supermarket cashier – had been fired for just cause for allowing three customers to pass through the tills leaving the products in the trolleys and for failing to ask them to put the goods on the conveyor belt as required by company regulations.

It was also claimed that the worker had failed to perform a direct check of the products in the trolley, limiting herself to recording on the cash register the quantities of each type of product indicated by the customers themselves.

The price paid by the three customers turned out to be, following the subsequent intervention of the police called by the security officer, significantly lower than the quantity of goods that were present in their trolleys.

The first instance judge considered the worker’s dismissal to be lawful, as she was guilty of negligent conduct.

The Rome Court of Appeal overturned the judgment issued in first instance, and, following the appeal brought by the Company, the matter was brought to the Italian Court of Cassation.

The Italian Court of Cassation’s Order

The judges of the Italian Court of Cassation, in confirming the lawfulness of the worker’s dismissal, analysed in detail the rules referred to in Article 1460 of the Italian Civil Code relating to the exception of non-performance, in this case, within the framework of an employment contract.

The Court noted that on the subject of one of the parties’ non-performance of an employment contract, previous rulings had considered that the employer’s non-performance does not automatically legitimise the employee’s refusal to perform.

As this is a contract for consideration, the provisions of Article 1460, paragraph 2, of the Italian Civil Code apply, according to which the performing party may refuse to perform the service at its own expense only if such a refusal, having regard to the concrete circumstances, is not contrary to good faith (Italian Court of Cassation, No 434 of 2019; Italian Court of Cassation, No 14138 of 2018; Italian Court of Cassation, No 11408 of 2018).

The court must therefore carry out a comparative evaluation of the opposing performances having regard also to their proportionality with respect to the financial-social function of the contract and their respective impact on the balance between the parties and their interests. This gives rise to the consequence that where the non-performance of one party is not serious or of little importance in relation to the interest of the other party, the latter’s refusal to perform its obligation cannot be considered to be in good faith and, therefore, is not justified under Article 1460, paragraph 2 of the Italian Civil Code (Italian Court of Cassation, No 11430 of 2006).

On the subject of dismissal for just cause, the worker’s refusal to perform the service in the manner indicated by the employer is capable, where not based on good faith, of causing the loss of confidence in the future performance. This in turn therefore justifies termination, since non-compliance with the employer’s measures, albeit unlawful, must be assessed, from a sanctioning standpoint, in light of the provisions of Article 1460, paragraph 2 of the Italian Civil Code, according to which the performing party may refuse to perform the service at its own expense only if such refusal is not contrary to good faith, having regard to the actual circumstances (see Italian Court of Cassation, No 12777 of 2019).

In the present case, according to the Italian Court of Cassation, the Rome Court of Appeal scrupulously adhered to the principles mentioned above in holding that:

• the employer had failed in its obligation to protect the employee (imposed on each employer by Article 2087 of the Italian Civil Code) from the threatening behaviour of the three customers, or, in any case, as perceived by the cashier in good faith (so much so that she requested the assistance of the security guard) and as such suitable to expose her to a risk to her own safety;
• the employee’s breach, not as a refusal to perform the service but in performing it in a way that did not comply with the procedures prescribed by the company (the customers’ obligation to place all the goods on the conveyor belt), should be considered lawful and justified, in the light of the aforementioned Article 1460, paragraph 2, of the Italian Civil Code.

In light of the above principles, the Court confirmed the unlawfulness of the worker’s dismissal with the application of the ‘mitigated’ reinstatement protection provided for by Article 18, paragraph 4, of Italian Law No 300/1970 (applicable to the present case).

Other related insights:

• Dismissal for just cause and reintegration protection
• Legitimate dismissal for refusal to return to company after illness