The Supreme Courte, by its decision no. 23852 of 5 September 2024, examined the question of the dismissal for just cause of an employee who, during a period of illness, participated in a football tournament already scheduled, thereby breaching his obligations of diligence, loyalty and fairness, thus jeopardising his recovery or return to work. The employee appealed the dismissal, arguing that the participation in a football tournament during his sick leave did not breach his contractual obligations. The company claimed that the employee had simulated illness in order to participate in the competition, thereby jeopardising his recovery and breaching the principles of fairness and good faith. The Supreme Court rejected the employee’s claim, stating that “the performance of physical activity during the period of illness <<…>> constitutes a breach of the contractual obligations of diligence and loyalty”. Furthermore, it stated that: “<<…>> sporting activity, by its very nature, may affect or delay recovery or the return to work”. Perhaps because of the particularly serious nature of the employee’s conduct, the judgment in question represents an important decision in a matter in which the case law has too often shown a tendency to tolerate conduct that raises doubts as to the employee’s true state of illness

On 16 September was published in the Official Gazette the Decree-Law no. 131/2024 (i.e. “Decreto Salva Infrazioni”) – in force since 17 September – which also intervened on the regulation of fixed-term contracts through which the European Union requested Italy to align Italian legislation with EU Directive 1999/70/EC on fixed-term work.

The “Salva Infrazioni” decree amended Article 28, paragraphs 2 and 3 of Legislative Decree No. 81/2015 (i.e. “Jobs Act”), introducing significant changes regarding the compensation indemnity for damages in case of fixed-term contracts declared unlawful. 

Pre-existing regulation:

• In cases of transformation of a fixed-term contract into an open-ended contract, the employee is entitled to a lump sum indemnity ranging from 2.5 to 12-months’ salary of the last reference salary for calculating severance pay.

The maximum limit of the indemnity is reduced to 6 months’ salary in the case of collective agreements that provide for procedures to stabilize fixed-term workers.

Amendments introduced by Decree-Law No. 131/2024:

• The Decree gives to the judge power to set compensation indemnity exceeding 12-months’ salary in cases of unlawful fixed-term contracts,
• Paragraph 3, which allowed the limit of the indemnity of the 6 months’ salary, is abolished.

“The use of personal data is not subject to the obligation to inform and obtain the prior consent of the data controller when personal data are collected and processed in the context of legal proceedings”. This is “provided that the data are inherent to the area of business and litigation that justifies their collection, that they are not used for purposes other than those of justice for which they were collected, and that the authorizing measure is in place”.

This has been stated by the Court of Cassation, decision no. 24797/2024 of 16 September 2024.

In detail, a few employees – each in the context of their own dispute over matters relating to their employment relationship – had submitted to the court a recording of a conversation that had taken place some years earlier between one of their colleagues and some executives of the employer company. The recording was made without the knowledge or permission of the participants. The executives involved claimed the matter to the data protection authority, which rejected the claim on the assumptions that the recording, and thus the related processing of personal data, had been carried out for purposes related to contesting charges in the context of the employment relationship. At this point, the executives appealed to the ordinary courts.

In addition to the well-established national case-law on the subject, the Supreme Court also refers to the Court of Justice (EU) which, in its judgment of 2 March 2023, C-268/21 – Norra Stockholm Bygg AB v Per Nycander AB, made it clear that “where personal data of third parties are used in a case, it is for the national court to weigh, in full knowledge of the facts and in accordance with the principle of proportionality the interests concerned” and  “that assessment may, where appropriate, lead him to authorize the full or partial disclosure to the other party of the personal data thus disclosed to him if he considers that such disclosure does not go beyond what is necessary to ensure the effective enjoyment of the rights which individuals derive from Article 47 of the Charter”.

The Court of Cassation also remainds that “Articles 17 and 21 of the GDPR make it clear that, in the balancing of the interests involved, the right to defend oneself in court may be considered overriding over the rights of the data subject to the processing of personal data”.

The Court of Cassation, in its decision no. 24130 of 9 September 2024, provided important clarifications regarding the use of work permits under Law no. 104 of 1992, stating that a worker may be absent for short personal activities, such as shopping, and that this does not automatically entail an abuse of the right or a violation of the welfare purposes established by the law.

The dispute originated from an employer’s complaint against an employee who had used the so-called “104 leave” to go shopping in a market. In particular, the employer claimed that the employee had uses the leave for activities that did not refer to caring for her disabled family member and had therefore dismissed her for cause, considering that such conduct constituted an abuse of the benefit provided by law.

However, the Court of first instance had rejected the latter interpretation, emphasizing that the activity in question was marginal. In the present case, the employee had, in fact, gone shopping on her way to the home of the assisted family member. Consequently, the dismissal was considered to be unlawful, since the social purposes provided for by Law no. 104/92 had been fulfilled.

Confirming the decision, the Supreme Court ruled that Law no. 104/92 does not require the worker to be present at the home of the family member to be assisted for the entire duration of the working day. In fact, the Court clarified that, although absence from work must be justified on welfare grounds, this does not exclude the possibility of carrying out other minor activities, as long as these activities do not entail a clear violation of the purpose for which the leave was granted. In fact, the judgment reiterates that leave is granted on a daily basis and not on an hourly or chronometric basis.

Continue reading the full version published on Norme e Tributi Plus Lavoro del Il Sole 24 Ore.

The Court of Appeal of Milan, in its judgment no. 470/2024, again addressed the issue of whether the income from the sale of stock options may be included in the remuneration for the purposes of calculating notice and severance pay. The Court ruled that, in the present case, the income from the stock options was of a continuous and not occasional nature and therefore was an essential part of the remuneration. The Court thus overturned the decision no. 246 of 7 May 2024 issued by the same body, triggering a discussion on the issue.

The dispute originated from an appeal by an executive dismissed for just cause. The dispute concerned, inter alia, the inclusion in the calculation of the remuneration of the amounts resulting from the exercise of stock options which the manager claimed to be part of the remuneration due to their regular and non-occasional nature, as they had a predetermined frequency, forming part of three-year or four-year plans. The Court of first instance rejected the latter argument, excluding such income from remuneration on the grounds that there was a company regulation that excluded it from the calculation of the global remuneration.

However, the Court of Appeal decided to adopt a different perspective, referring both to Article 2099 (paragraph 3) of the Civil Code, which states that «the employee may also be remunerated in whole or in part by profit-sharing or product-sharing, by commission or by benefits in kind», and Article 2120 of the Civil Code, which states that «unless otherwise provided for by NCBAs», the remuneration relevant to the calculation of severance pay «shall include all sums, including the equivalent of benefits in kind, paid in connection with the employment relationship on a non-occasional basis, with the exception of those paid by way of reimbursement of expenses».

The Milan Court therefore ruled that stock options constituted a form of remuneration by way of profit-sharing provided for by Article 2099 of the Civil Code and also stated that, pursuant to Article 51 of the Italian Income Tax Code (i.e. “TUIR”), «all sums and values in general, (…) even if they do not come directly from the employer», as could be the case with a payment made by another group company, are considered to be the employee’s income. Continue reading the full version published on Norme e Tributi Plus Lavoro del Il Sole 24 Ore.