The Court of Cassation, with judgement No. 3186 of 4 February 2019, stated that dismissal based on a future corporate transfer (through merger) with consequent unification of departments, cannot be considered lawful, with the employee involved subject to the protections established by Article 18, paragraph 4, of the Law No. 300/1970 (the so-called attenuated reinstatement). This is because the case in question must be regarded as the equivalent of “clear non-existence” of the fact on which the dismissal was based.
The facts
A female employee, with an appeal filed under No. Law 92/2012, brought her case to court against her employer in order to obtain a ruling voiding, stating as ineffective or declaring as unlawful her dismissal. Specifically, she argued of having received respectively: (i) on 16 October 2014, a merely informative notification concerning the termination of her employment following the transfer of her tasks to the registered office of another company as a consequence of the merger by incorporation between the latter and her employer company; (ii) on 6 November, the letter of dismissal due to removal of her job position. Nevertheless, the employee pointed out that the merger by incorporation took place only on 24 November 2014, thus after her dismissal.
The employee also invoked the application of Article 2112, paragraph 4, of the Italian Civil Code, according to which a corporate transfer (equal to a merger) could not in itself constitute grounds for dismissal.
The Court ruled the dismissal void, ordering the reinstatement of the employee and the payment to her of the damage indemnity. In the Court’s opinion, in fact, dismissal was in conflict with Article 2112, paragraph 4, of the Italian Civil Code, since it had to be exclusively due to a corporate merger and in any case ordered in violation of the procedure set out in Law No. 223/1991.
At time of claim, the Court sided with the company, considering as proven the corporate crisis that had led to the removal of the job position in question, regardless of the merger and, therefore, excluding a violation of Article 2112 of the Italian Civil Code and the applicability of Law No. 223/1911.
The employee appealed against the first instance judgement. The local Court of Appeal in charge, overturning the judgment, declared the dismissal unlawful, thus issuing an order for reinstatement and an order for the company to pay a compensation equal to 12 months’ salary calculated on the basis of the total de facto remuneration pursuant to Article 18(1) of Law No. 300/1970, in addition to ancillary charges.
The company appealed to the Court of Cassation against the second instance judgement.
The ruling of the Court
The Court of Cassation confirmed the dismissal was unlawful since it did not appear that a loss of job position took place at the time of its notification, but at most a forthcoming transfer of tasks to another company.
In support of its opinion, the Court of Cassation made reference to a previous judgement according to which ”in the event of a corporate transfer, the transferor retains the power of withdrawal granted by the general regulations so that the transfer, although it may not be the only reason of justification, cannot prevent dismissal on justified objective grounds provided that can be identified in the corporate structure assessed independently and not in connection with the transfer or in the purpose of facilitating it”. (Court of Cassation, Civil Division No. 11410/18 and Court of Cassation, Civil Division No. 15495/18).
The Court of Cassation, however, upheld the company’s objection that the dismissal caused by the corporate transfer does not in itself void the dismissal with the consequent inapplicability of the protections provided for in Art. 18 of Law No. 300/1970.
According to the Court of Cassation, in fact, “Article 2112 of the Italian Civil Code only establishes that a corporate transfer does not in itself represent grounds for dismissal, and does not generally prohibit it, much less under penalty of voidance”. Therefore, in its opinion, the dismissal cannot be protected by the regime referred to in paragraph 1 of Article 18 of the Workers’ Statute. A paragraph that calls for reinstatement in the event of discriminatory dismissal or dismissal for unlawful reasons or “in the other cases of voidance provided for by law”. This is specifically because Art. 2112 of the Italian Civil Code de quo calls for its voiding the effects for lack of a justified reason.
Consequently, in its opinion, the case under review must be considered under the scenario of “clear absence of the fact” on which the dismissal for justified objective reasons was based, as per the second sentence of Article 18, paragraph 7 of the Law No. 300/1970. This was because it was proven that, at the time of dismissal, the reasons for it did not exist, since they were simply linked to a future grouping of tasks which would, moreover, achieved through a future corporate merger. A merger that in turn did not constitute in itself justified grounds for dismissal pursuant to and by effect of Article 2112, paragraph 4, of the Italian Civil Code.
According to the Court of Cassation, the judgment under appeal should have fallen under the protection provided for in paragraph 4 of Article 18 of Law No. 300/1970 with voiding of the dismissal and order to reinstate the employee and to pay full remuneration calculated effective from the date of dismissal until the date of reinstatement, deducting any aliunde perceptum o percipiendum, in any case not exceeding 12 months’ salary of the actual remuneration, in addition to the payment of social security contributions as established by the aforementioned Article 4.
Conclusions
The judgment in question shows that the transferor company may dismiss an employee on justified objective grounds only if the corporate transfer takes place at a time prior to that of the dismissal itself. Lacking that, the risk is to incur the consequences referred to in Article 18, paragraph 4, of the Workers’ Statute (the so-called attenuated reinstatement).
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With its order no. 32533, filed 14 December last, the Italian Court of Cassation established that employees, when subject to disciplinary procedures, have the right to access the records concerning them. The Court thus confirmed the full scope of the “right of access”, as governed by Article 7 of the Italian Privacy Code, which was in effect at the time of the events described below, and in accordance with the provisions of Article 15 of EU Regulation 679/2016 (“GDPR”), which is currently applicable.
The facts
The case originated from an appeal submitted by a Bank firstly against the provision issued by the Italian Data Protection Authority [Garante per la protezione dei dati personali] (the “Authority”), and subsequently against the judgment of the Court with territorial jurisdiction, which had upheld the Authority’s position.
In this specific case, following notification that he was being subject to a disciplinary penalty (suspension from service and from the relative financial treatment for one day), an employee of the Bank requested to see the background records that had led to the penalty, which included the assessments made about him.
The requested documents had been provided for in an internal circular dating back to 2009, and specifically the (i) “Notice in the form of a written report sent to “Discipline” by the Central and Local HR Manager”, and (ii) the “Accompanying letter in which the HR Manager makes assessments jointly with the Manager of the local or central office”.
When invited by the Authority to provide a reply to the employee’s requests, the Bank responded that the aforementioned documents
– contained company data “strictly for internal use”, which was also protected by privacy legislation and subject to the right to organize and manage one’s own activity (Article 41 of the Italian Constitution), and
– were “intraprocedural records”, pertaining only to the precise moment at which the employer’s will was formed. According to the Bank, they could not be deemed relevant for the purposes of the worker’s opposing right of defence. This was a right which, in the Bank’s opinion, had already been guaranteed since all of the necessary information had been provided in the letters notifying the employer of the charges against him.
The Court upheld the Authority’s Provision and rejected the Bank’s appeal, deeming that
(i) the principles governing defence in disciplinary procedures and in court had absolutely not been respected, and
(ii) the Bank could have simply removed any passages of the requested documentation that were not relevant for the purposes of the worker’s requests if they were prejudicial to any right to confidentiality established in favour of third parties.
In essence, the Court declared that the employer’s decision to keep some aspects of its own organizational decisions private was unlawful: “the party cannot be entitled to decide, at its own discretion, what can or cannot be made available, since such a situation would also allow the appellant company to control all decisions concerning the counterparty’s ability to establish a defence”.
The Bank filed an appeal against the Court’s ruling at the Court of Cassation, requesting that the dispute be dealt with at a public hearing, given the significance of the issue.
The ruling of the Court
The ruling of the Court focused on three main points, as outlined below.
In this regard, the Supreme Court of Cassation made the same assessments as the trial judge, as mentioned above, deeming that – following the balancing of opposing interests – the worker’s right of access prevails over the confidentiality requirements asserted by the Bank.
In the Court’s opinion, the Bank could have allowed access to the documents containing assessments about the employee while also protecting the third parties, by redacting information that could be prejudicial to them, for example.
Moreover, in upholding the ruling handed down by the trial judge, the Court of Cassation specified that the right of access cannot be understood – in a restrictive sense – as the mere right to know any new information in addition to that which has already become known to the interested party: the scope of the right in question is much broader.
According to the Court, the purpose of the right of access is – in protection of the interested party’s dignity and privacy – to guarantee that he can verify ratione temporis whether his personal data (i) has been entered, (ii) remains on record, or (iii) has been removed, regardless of whether or not the interested party has become aware of such information by other means and on different occasions (see the reference to the aforementioned letters notifying the employee of the charges). Therefore, the right to this verification must be guaranteed through the interested party having access to his own personal data at all times during the employment relationship.
Finally, the Court of Cassation confirmed and reiterated the orientation that it had established previously, aimed at guaranteeing the right of access to documentation concerning matters connected to the employment relationship. This is applicable both to cases in which that documentation is required by law and to cases in which the documentation is provided for by the business organization, through internal circulars, for example (cf. Court of Cassation Judgment no. 9961 of 2007, inter alia), as in the case at hand.
Conclusions
In essence, the Court of Cassation deems that the legislative and regulatory provisions on the “right of access” do not suggest any specific limitation with regard to the specific purposes for which it may or may not be exercised. Therefore, the right in question can be duly exercised by the employee for the purposes of his own defence.
The Labour Division of the Supreme Court of Cassation, with ruling no. 29377 dated 14 November 2018, deemed lawful, within the context of a collective dismissal – because of its objective nature – the criterion of choice represented by meeting the requirements to access the pension.
The Facts
An employee brought his case to court in order to get his dismissal declared unlawful when it was ordered as the result of a collective dismissal initiated by its former employer company. The Court of Appeals having local jurisdiction, during the proceedings, confirmed the ruling of the Judge of first instance.
In particular, the district Court declared non-discriminatory the criterion used for the selection of personnel deemed in excess, represented by reaching the requirements to access the pension, brought forth by the employee.
According to the Court of Appeals, even the procedural breach claimed with reference to the violation of the obligation to specify the methods applied for the selection criterion adopted could not be accepted. This due to (i) the objective nature of the criterion, which excluded the discretionary approach in the choice of the employer and (ii) the unnecessary comparison of the employees identified with those lacking the specified requirements, in the opinion of the Court, the list of names of employees dismissed was sufficient as attached to the notification as per article 4, paragraph 9 of Law 223/1991.
In addition, the judges in charge deemed impossible to accept the claims contesting the existence of the conditions to initiate the proceedings, since the ruling of the court having jurisdiction would have had to focus only on meeting the procedural rules.
The employee filed an appeal at the Court of Cassation against said decision. The employee claimed, first of all, a breach of article 15 of Law 300/1970 regarding the principle of non-discrimination as well as the missing, insufficient and contrasting reason regarding a definitive fact, that is the choice of the employee to be dismissed. According to the employee, from a review of the documentation attached to the procedure and from the official communications submitted, it was not possible to establish in any way the methods used for applying the selection criterion.
The ruling of the Court
Called upon to rule on the issue, the Court of Cassation rejected in full the appeal of the employee.
With reference to the verification of the prerequisites to initiate the procedure, the Court noted that it is by now consolidated in case law the trend according to which Law 223/1991 – that establishes in articles 4 and 5 the accurate, full and regulated procedure of the employer’s provision – introduced a significant innovative element. Said element consists in moving from a jurisdictional oversight, as exercised ex post in the previous regulations, to an oversight of the entrepreneurial initiative being assigned ex ante to the role of the unions. Therefore, according to the Court, the verification of meeting the conditions for the initiation of the procedure was the responsibility of the unions.
Furthermore, the Court specified that the discrimination claim was unfounded regarding the criterion related to obtaining, within the mobility time period, of the requirements to access the pension.
Regarding instead the completeness of the notification imposed by Law 223/1991, the Court of Cassation stated that when said criteria is the only one, it is sufficient to notify the list of dismissed employees and the criterion of choice applied, that is meeting the requirements to access the old age or seniority pension. Therefore, according to the Court of Cassation, the objective nature of the criterion makes fully unnecessary the comparison with the employees lacking said requirement.
Moreover, the Court also specified that among the various employees used as reference, the petitioner was the one with greater employment seniority as well as being the one meeting the requirements to access the pension.
Conclusions
In the end, according to the Court of Cassation, there is no doubt regarding the legitimacy of the criteria of choice adopted.
The Court based its ruling on the consolidated case law trend according to which “the negotiable identification of the criteria of choice of the employees to be dismissed (that translates into a union agreement that can be signed by the majority of employees directly or through their representing unions, without having unanimous voting) meets – as highlighted by ruling no. 268 dated 22 June 1994, of the Constitutional Court – a regulatory function delegated by the law and, therefore, must meet not only the principle of non discrimination, as per art. 15 of Law 300 dated 1970, but also the rationality principle, according to which the criteria agreed upon must have the characteristics of objectivity and generality and be consistent with the purpose of employees’ mobility: meeting these criteria excludes the possibility of claiming discrimination” (see Cassation, Labour Division, Judgement no. 2694 dated 05/02/2018).
And proving the failure to meet the objective criteria falls under the responsibility of the employee while the employer has the responsibility of attaching the selection criteria and prove their full application towards the dismissed employees.
By means of judgment No. 25740 of 15 October 2018, the Court of Cassation has established the important principle that commission accrued by a “coordinator” agent, meaning an agent whose commission is based on the commission earned by the sales network he/she coordinates, should not to be taken into account in the calculation of the termination indemnity due under the agreement.
The Facts
A sales agent resorted to the Court for the employer to be ordered to pay an indemnity in the event of termination of the relationship pursuant to art. 1751 of the Italian civil code, in relation to an engagement to promote and place financial products.
The Court dismissed the application and the agent filed an appeal, which confirmed the decision of the trial court.
In that specific case, the local Court highlighted that:
– the agent had failed to demonstrate that, following the termination of the agency agreement, the employer had continued to enjoy significant benefits, and
– the payment of an indemnity pursuant to art. 1751 of the civil code, for the work the agent had carried out as the “team manager” (coordinator of a group of agents), could not be deemed lawful. Indeed, according to the Court of Appeal, this would have constituted a double payment to be borne by the employer (to the individual agent who had concluded the transaction and to the team manager), thus, in contrast with the principle of equity cited by the same art. 1751 of the civil code.
The ruling of the Court of Cassation
In confirming the decision of the trial court, the Court of Cassation observed that the intention of art. 1751 of the civil code was to make the payment of the indemnity subject “not only to an increase in the customer base, or, alternatively, to a significant increase in the volume of business transacted with the employer’s existing customers, but also to the employer’s continued enjoyment of significant benefits from such customer relationships, which, therefore, must continue in existence for a reasonable length of time”.
Indeed, art. 1751 of the civil code provides that “On termination of the relationship, the employer shall pay the agent an indemnity if the following conditions are met: the agent has acquired new customers for the employer or has significantly increased the volume of business transacted with existing customers and the employer still receives significant benefits from the business concluded with such customers; the payment of said indemnity is fair, taking into account the circumstances of the case, specifically the commission which the agent would lose on the business transacted with such customers”.
Consequently, the Court of Cassation took the view that the provision in question is “clear in its intention to reward, by means of the payment of an indemnity, any promotion activity that is directly aimed at customers, both in the more dynamic terms of acquiring new customers and in terms of increasing the volume of business concluded with those already acquired, and to link any such reward to a particular and evident interest of the employer and a significant commitment on part of the agent (thus deserving of an economic reward).
In any event, in full alignment with the ruling of the Court of Appeal, the Court of Cassation highlighted that adding the indemnity set out in art. 1751 of the civil code to the commission received by the agent for having coordinated the team of agents would be in contrast with the principle of equity referenced in the provision in question. This is because the employer would be obliged to make a double payment – to the individual agent who concluded the transaction and to the team manager.
Conclusions
In essence, it is clear from the foregoing ruling that in awarding a termination indemnity pursuant to art. 1751 of the civil code, the commission received for the activity of coordinating a team of agents should not be taken into account, since such commission is paid for business that is acquired not directly and personally by the agent but by the other agents he/she manages.
With its judgement no. 21562 filed on 3 September 2018 (decision in camera on 13 March 2018), the Court of Cassation examined the issue of breaks at work (in the case in question, the lunch break), with specific attention paid to the case of a part time worker.
The Facts
An employee hired under a part time employment contract appealed to the Labour Court to ascertain his right to payment for hours worked over and above the working hours contractually agreed upon (which were 30 hours, as compared to the standard 37.5 hours of work per week), including, inter alia, the 30-minute lunch break which was unilaterally imposed by the employer subsequently to the beginning of the relationship. The Court rejected to worker’s claim. The worker filed an appeal against this first instance ruling. The local Court recognised the worker’s entitlement to receive the additional pay for the overtime work, but did not include the 30-minute lunch break in the calculation of the working hours. In confirming the first instance ruling in regard to the claim for indemnity connected to the late notification of the shift schedules, the Court pointed out that, conversely to what he had claimed in his own defence brief, the worker had not submitted the applicable regulatory and contractual sources indicating that there did in fact exist an obligation to promptly notify the shift schedules. As if that did not suffice, according to the Court of Appeal, the worker had neglected to submit specific facts that would indicate the alleged violation of the principles of fairness and good faith in the performance of the contract, nor had he identified specific monetary and non-monetary effects on his working and personal life that would have enabled the acknowledgement of the damage he was claiming indemnification for. The worker then resorted to the Court of Cassation, which rejected his claims.
Notion of working hours and breaks
To contextualise the case the Court of Cassation examined, one must start from the notion of working hours and outline the provisions which have been amended and revised over the last few decades. To date, it is Legislative Decree 66/2003, with its transposition of two EU directives (i.e., 93/104/EC and 2000/34/EC) that has dictated a regulatory framework applicable to working hours. Based on the legislation, working hours can be defined as “any period in which the worker is at work and available for the employer and performs his or her activities and functions.” Therefore, the remuneration obligation does not apply only when the employer can prove that the employee is free to act at will or is not subject to the hierarchic powers at the given time. In relation to said breaks, when such a break is provided during the work activity, if there is no express legislative (i.e., breaks for workers who work in front of video terminals) or contractual provision that considers such a break as part of the working hours, it is the worker’s obligation to prove that the break is in some way connected or related to the work itself, and ordered by someone other than the worker, and is therefore not left to the worker’s free choice.
The ruling of the Court of Cassation
In the ruling in question, the worker’s appeal to the Court of Cassation essentially consisted of two main claims: (a) the first is related to the need to consider lunch breaks as part of working hours and (b) the second is related to the conduct of the employer, who had imposed a 30-minute lunch break after the beginning of the employment relationship.
Concerning the first claim, the Court of Cassation recalled a now established principle (see, most recently, Court of Cassation 13466/2017) and reiterated the principle of law according to which working hours are nevertheless part of the “time a worker spends at the company while pursuing the activities that are preliminary and ancillary to the duties assigned to that worker, in the strict sense (…). Therefore, in order to be exempted from the remuneration obligation, the employer must prove that to pursue said activities connected to his or her services the worker is free to act autonomously and is not subject to [the employer’s] hierarchical power.” That same Court of Cassation then indicated that “ lacking a legal or contractual provision that includes that period of time as being a break in the working hours (…) it is the worker’s obligation to allege and prove that the break time is connected or related to his or her services, has been ordered by someone other than the worker and the duration of the break time is not left to the worker’s free choice.” The Court of Cassation underlined that in the case submitted to it, there was no legislative or contractual provision that would lead it to consider the lunch break as an integral part of the working hours (which would therefore require remuneration). Similarly, the Court observed that the worker had not proven that there existed a relation between his working activity and the lunch break during the working day. Consequently, the Court of Cassation found that the worker was not entitled to the claimed remuneration differences in regard to the lunch breaks.
Regarding the second claim, the Court of Cassation deemed lawful the unilateral modification of the working hours ordered by the employer, with the introduction of a 30-minute lunch break. In fact, the Court of Cassation underlined that “according to his or her specific requirements, the employer is obviously allowed to organise activities in shifts. Nevertheless, even if there are no specific legal or contractual provisions, these shifts must be notified to the workers reasonably ahead of time so as to allow them to arrange their plans … The good faith in the performance of the contract lies, among other things, in a general obligation of solidarity that requires each party to act in such a manner as to protect the interests of the other party (…). Verification in practice of the violation of these duties of fairness shall be carried out by the court in charge that will rule on the basis of the allegations made by the parties.” Therefore, according to the Court of Cassation, the mere introduction of a break or the organisation of the work in shifts cannot be considered as a change in status from full time to part time.
Conclusions
In conclusion, as expressed by the Court of Cassation in its judgement above, without prejudice to the legal and contractual exceptions and the possibility afforded to the worker concerned of proving the causality between the break and the pursuit of the work, a break is not considered to be part of working hours and is therefore not to be remunerated. Moreover, and again according to the reasoning followed by the Court, a break can be imposed by the employer, consistently with the organisation of the company and fulfilling contractual obligations fairly and in good faith, without requiring the consent of the worker, adequate notification being considered sufficient.
