With order no. 17450 of 25 June 2024, the Italian Court of Cassation – confirming its previous position – ruled that in the event that an employment relationship which is only ‘formally’ one of self-employment is found to be a subordinate employment relationship the indemnity regime typical of fixed-term contracts does not apply, but instead the compensatory regime applies, starting from the formal notice.
A journalist, who had entered into multiple fixed-term self-employment contracts with the company over a period of almost 12 years, brought an action before the courts to obtain a finding of the existence of a permanent employment relationship, and to order the employer to pay full compensation for damages, equal to the wages accrued from the formal notice following the expiry of the last self-employment contract and until effective reemployment.
The Italian Court of Appeal partially upheld the said claim, finding, on the one hand, the subordinate nature of the employment relationship between the parties, but rejecting, on the other, the claim for compensation in the terms requested by the worker.
With regard to the latter aspect, the Italian Court of Appeal specified that, even with reference to fixed-term employment contracts that are only formally autonomous, the compensation regime typical of fixed-term contracts applies, i.e., the all-inclusive indemnity to the extent of between a minimum of 2.5 and a maximum of 12 monthly instalments.
The worker referred the proceedings to the Italian Court of Cassation, with a cross-claim by the company. The Italian Court of Cassation found preliminarily that, in relation to a permanent employment relationship, the compensation regime relating to fixed-term contracts does not apply.
According to the Italian Court of Cassation Judges the legislation relating to fixed-term contracts (providing for an amount varying from 2.5 to 12 monthly instalments) applies in the event of a declaration of unlawfulness of the term set out in the employment contract, which did not cover the present case.
The Judges held that, if a self-employment contract is reclassified – which presupposes a thorough judicial investigation conducted on the basis of indicators that reveal the parties’ rights, obligations and powers – the worker is entitled to full compensation for the damage, equal to the remuneration accrued from the formal notice until reemployment.
In the light of the foregoing, the Italian Supreme Court upheld the worker’s ground of appeal, quashing the contested judgment and referring it for a second review by the Court of Appeal.
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In relation to accidents at work, the appointment of a supervisor is not sufficient to avoid the employer’s conviction. This was established by the Italian Court of Cassation, Criminal Section, judgment of 10 June 2024, no. 23049.
The Italian Court of Cassation clarified that the employer must exercise reasonable vigilance to prevent the establishment of practices contrary to the law that may endanger workers. Therefore, in the event of an accident or injury, the employer’s ignorance does not exclude his or her fault for failure to monitor the supervisor’s conduct.
In the case before the Court, a worker suffered serious and permanent injuries as a result of the use of chemical reagents while cleaning machinery. In carrying out this activity it appeared that the worker was not equipped with adequate protective equipment and had not received the necessary training.
The first instance Court convicted the employer, finding a causal link between the negligent conduct and the criminal event and stressing that the injurious event could have been avoided by appointing a person with more experience as the supervisor.
The Italian Court of Appeal, overturning the first instance judgment, on the one hand acquitted the employer observing that the supervisor had proven experience, and was therefore appropriate for the tasks and role assigned to him and, on the other, characterised the worker’s conduct as eccentric and unpredictable.
The Italian Court of Cassation, quashed the Court of Appeal’s decision. The Italian Court of Cassation held that the Court of Appeal had not taken into account the fact that the worker involved had not received adequate training, and noted that, given the nature of his duties, he should not have been involved in activities involving the use of chemicals.
The Italian Court of Cassation also stated that for safety purposes the employer is required to ensure proper training of workers regardless of the operational experience they may have acquired over time and held the employer liable for failure to supervise the supervisor’s work.
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In judgment no. 128 of 16 July 2024, the Italian Constitutional Court declared Article 3, paragraphs 1 and 2 of Italian Legislative Decree no 23/2015 to be unconstitutional. The Court made this finding on the basis that the provision does not provide that the mitigated reinstatement protection also applies in cases of dismissal for justified objective reasons (giustificato motivo oggettivo, ‘GMO’), where the non-existence of the material fact alleged by the employer is directly proven in court, which is not connected with any assessment regarding the employee’s re-employment.
A worker, hired on a permanent basis by a staff supply agency, brought legal proceedings challenging his dismissal for a justified objective reason.
The applicant alleged that he had carried out several assignments for the user, for a total duration of less than two years, and that, when the last assignment ceased, the employer – in the absence of further redeployment prospects – had activated the procedure of making him available for lack of job opportunities, under Article 25 of the National Collective Bargaining Agreement (Contratto Collettivo Nazionale di Lavoro, ‘CCNL’) for Staff Supply Agencies. As a result of the procedure the user informed the worker of the termination of his employment for justified objective reasons.
The worker disputed that there were no vacancies in positions requiring his professional skills because they had actually been allocated to other workers.
Therefore, the worker demanded, as his main claim – under Article 3, paragraph 2 of Italian Legislative Decree no. 23 of 2015 – reinstatement to his position, in addition to compensation equal to the last reference salary for the calculation of severance pay from the day of dismissal to the actual reinstatement. In the alternative he sought payment of the compensation referred to in paragraph 1 of the same provision.
Hearing the case, the Court of Ravenna raised questions on the constitutionality of Article 3, paragraphs 1 and 2 of Italian Legislative Decree no. 23/2015, insofar as the rule provides for the exclusion of reinstatement where the court finds that the fact underlying the dismissal for justified objective reason does not exist.
As a preliminary point the Court noted that although the reasons underlying the dismissal on the grounds of justified objective reason cannot be reviewed on the merits, the principle of necessary causality of the employer’s dismissal requires that the material fact on which the employer’s actions are based must exist.
The Court continued that otherwise this would create an unreasonable difference between that this scenario and the parallel scenario of a disciplinary dismissal which, if based on an unfounded allegation, leads to reinstatement.
Moreover, this would allow the employer party to arbitrarily choose, in the case of a dismissal based on an unsubstantiated fact, to classify it as a dismissal for a justified objective reason rather than as a disciplinary dismissal, for the sole purpose of avoiding the risk of reinstatement.
In light of the above, the Italian Constitutional Court upheld the questions raised with reference to the breach of Article 3, 4 and 35 of the Italian Constitution. The Court declared the unconstitutionality of Article 3, paragraphs 1 and 2 of Italian Legislative Decree no. 23/2015, insofar as it excludes reinstatement where the court finds that the fact underlying the dismissal for a justified objective reason does not exist.
Finally, the Court clarified that the issue of unconstitutionality does not arise, however, if the material fact alleged by the employer as the basis for the dismissal exists, but the dismissal is based on a breach of the repêchage (obligation to relocate) obligation. It follows that a breach of this obligation only gives rise to the right to compensation set out in Article 3, first paragraph, of Italian Legislative Decree no. 23 of 2015.
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Italian Decree-Law no. 19/2024 (converted by Italian Law no. 56/2024) increased penalties for unlawfully carrying out staff supply work, contracting and secondment by expanding the cases for which there are criminal penalties.
In summary, contracting, secondment, and staff supply work are considered unlawful when workers are used without meeting legal requirements, for evasive purposes, and without the contractor, seconding party, or staff supplier exercising managerial and organisational powers.
On this point, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) first intervened in note no. 1091/2024 to clarify the exact amount of the applicable fines and the complex recidivism mechanism. Subsequently, in note no. 1133/2024, the INL examined the transitional regime for the application of the new penalties.
On the latter point, the INL has clarified that the new criminal penalties apply in relation to conduct that took place on or after 2 March 2024, the effective date of Italian Decree-Law no. 19/2024. For conduct that started and finished before 2 March 2024, on the other hand, the previous penalty regime of an administrative nature, regulated by Circular no. 6/2016 by the Ministry of Labour, applies.
However, the real issue, which has now been clarified, relates to conduct straddling the enactment of Italian Decree-Law no. 19/2024. The INL has confirmed that conduct started before 2 March 2024 and continued after that date is exclusively criminal in nature and therefore is subject to the penalties established by the new penalty regime.
In addition, the INL has also clarified that in determining the applicable penalty, which is linked to the number of days of unlawful employment of personnel, due to the possible alternatives of imprisonment and fines, periods prior to 2 March 2024 should also be considered. This is because the days of employment are relevant in assessing the seriousness of the offence, which, in turn, determines a proportional and “mandatory” sanction which is predetermined by reason of the workers involved and the number of days and constitutes a mere instrument to quantify fines with reference to conduct that must necessarily be considered as a single offence.
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With judgment no. 16630 of 14 June 2024, the Italian Court of Cassation ruled that to reinstate the employment relationship under Article 18, paragraph 10, of the Workers’ Charter, it is sufficient for the employer to send the notice of revocation of dismissal within 15 days of the notice of dismissal, although it is not necessary for this notice to be received by the employee in the same time frame.
An employee was dismissed for justified objective reasons by letter of 17 January 2018. The worker challenged the dismissal with a certified email sent to the company on 13 February 2018 and received by the employer on the same date.
On 1 March 2018 the employee received a telegram, sent to her by the company on 28 February 2018, revoking the dismissal and containing a request to return to work.
The employee claimed that the revocation was late and did not comply with the employer’s request.
Due to the worker’s unjustified absence which lasted for more than three days, the company dismissed her for just cause.
The employee brought legal proceedings, objecting to the lateness of the revocation of the first dismissal, as it had been received by her after the deadline of 15 days for challenging the dismissal.
The first instance judges as well as the court of appeal rejected the applicant’s claims. They noted that the revocation of the first dismissal was to be considered in time, since – in terms of revocation of the dismissal – the “principle of splitting the effective date of the document” (principio di scissione degli effetti dell’atto) applies.
The Italian Court of Cassation – in confirming the ruling of the court of appeal – noted, preliminarily, that revocation of dismissal, introduced by Italian Law no. 92/2012 and governed by Article 18, paragraph 10 of the Workers’ Charter is the employer’s unilateral right to safeguard his/her own rights and to which the worker is subject.
According to the Court of Cassation judges, this is a sort of “self-defence” (autotutela), which can be exercised by the employer, which results in the reinstatement of the relationship without interruption and without the need for a similar indication of consent by the employee.
The only necessary condition established by the law is that the revocation is carried out within 15 days of the notice to the employer that the dismissal is being challenged.
The Italian Court of Cassation judges held that, starting from an analysis of the wording of the provision – which anchors the start date (dies a quo) to the notice of the dismissal challenge and the expiry date (dies ad quem) to the date of the revocation, the absence of an express reference to the notice to the concerned party, “leads us to consider that the mere sending of the revocation to the worker within the prescribed period and not its receipt within the same period is sufficient”.
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