By Order no. 35527 of 19 December 2023, the Italian Court of Cassation ruled on the dismissal of a working mother ordered as a result of the cessation of the employer’s business activity following a declaration of bankruptcy, holding it to be void and ordering the employer to reinstate the employee and pay financial compensation.
In this case, the worker was dismissed by the receiver, shortly after returning from the period of compulsory maternity leave and before her child turned one year old, due to the declaration of bankruptcy of the Cooperative, her employer.
The worker challenged the dismissal before the Court of Arezzo claiming that the dismissal was void as notice was given within a year of her son’s birth. The Court accepted the worker’s claim, declared the dismissal null and void and ordered the receiver to reinstate the employee and to pay her compensation commensurate with her final salary.
The receiver appealed the decision to the Florence Court of Appeal, which confirmed the first instance judgment.
The Italian Court of Cassation, hearing the case, examined the concept of “cessation of business activity” provided for by Article 54, paragraph 3, letter b) of Italian Legislative Decree no. 151/2001 as one of the exceptions from the general prohibition on the dismissal of working mothers within a year of the birth of their child.
In particular, the Court examined the scenario in which the interim continuation of the business activity is not ordered with the bankruptcy ruling, nor subsequently authorised by the bankruptcy judge, in a context in which, after the bankruptcy, “it had been demonstrated that the liquidation activities had not begun and that, instead, protective activities were underway for the purpose of transfer to third parties (which is why a selection process of personnel to be retained in service was being carried out)”.
The Court noted that, from a comparison of the bankruptcy legislation and Article 54, the judgment declaring bankruptcy implies the formal cessation of the business activity (except for any authorised interim continuation), while the concept of cessation underlying Article 54 has a different scope.
In the Court’s opinion the exception to the prohibition on dismissal in the event of “cessation of the business activity” operates only in those cases in which there is no possibility, for whatever reason, of the continuation of the business. The Court noted that this is based on the over-riding protection of the rights of the mother-worker with respect to financial rights, which are safeguarded by the equal treatment of creditors principle in bankruptcy proceedings.
In recalling previous rulings on the topic, the Court, with the judgment in question, clarified that the exception provided for by Article 54 is subject to “precise and circumscribed limits” and that “because the termination of the relationship is an extraordinary or necessary event”, the exception cannot be interpreted expansively (Italian Court of Cassation no. 13861/2021). Therefore, the Court concluded, the exception to the prohibition on dismissal operates when the following two conditions are met: (i) the employer is a company and (ii) there is cessation of the business activity, with the burden of proof falling on the employer.
In the present case, in light of the fact that the business activity of the bankrupt Cooperative could not be said to have ceased, the worker’s dismissal was not considered to comply with the legal principles mentioned above and, for this reason, was therefore considered unlawful.
By Order no. 29101 of 19 October 2023, the Italian Supreme Court ruled on the compensation claim for damages in a “straining” case. The employee took legal action because his superior had applied towards him a “stressful” method of control, generating a heated discussion during which the employee had suffered a ischemic attack. The Court of Appeal, despite having established that the conduct had taken place, had denied its illegality, rejecting the compensation claim for damages made by the employee, based upon the fact that it was not a case of mobbing (or bullying), as it was an isolated episode and was not done systematically with a clear vexatious aim protracted over time. The Supreme Court stated that, aside from the classification as mobbing or straining, what is important is that the act committed, even in isolation, is an unlawful act pursuant to Article 2087 of the Italian Civil Code, leading to violation of the interests of the employee which are protected at the highest level of the legal system. The Supreme Court also clarified that straining represents an attenuated form of mobbing (or bullying), not having the continuous nature of the vexatious acts, but still attributable to Article 2087 of the Italian Civil Code, and that, once ascertained, it involves acceptance of the damages compensation claim.
By Order of 13 November 2023, no. 31561, the Italian Court of Cassation ruled that, to fully comply with the repêchage obligation (obligation to relocate), it is necessary to assess whether hires made following the termination for justified objective reasons are of the same level of classification as the dismissed employee.
An employee, employed as a cashier in a bar, challenged her dismissal for abolition of her position.
Following the first instance judgment, in which it was ascertained that the termination was unlawful, the employer appealed.
The Territorial Court, reversing the ruling of the court of first instance, held that the dismissal was lawful. The court based this decision on evidence not only of the abolition of the job of cashier, but also of the fact that the worker had always and only performed the duties of cashier, having never performed duties as a counter or table attendant, tasks that were subsequently assigned to newly hired staff.
The judges of second instance also specified that “the fact – which is completely incidental and random – that multiple qualifications are placed in the same level of classification by the collective agreement is of no relevance. This allocation, in fact, is relevant for other purposes, i.e. to identify the regulatory and remuneration regime of the employment relationship of the employees thus classified, but it is completely <neutral>, i.e. irrelevant, for the purposes of the interchangeability of the related tasks”.
The Court of Appeal’s decision was appealed by the employee on several grounds.
The Italian Court of Cassation – accepting the appeal brought by the employee – ruled, preliminarily, that the employer, in fulfilling its repêchage obligation, cannot disregard careful consideration of the national collective bargaining agreement (contratto collettivo nazionale di lavoro, ‘CCNL’) applicable to the employment relationship.
Indeed, according to the judges of the Italian Court of Cassation, in the case of dismissal for justified objective reasons, and in the light of the new Article 2103 of the Italian Civil Code, the reference to the levels of classification described by a collective agreement is a relevant factor.
The Court specified that the CCNL “constitutes a factor that the judge will have to assess to ascertain whether or not the person who was dismissed was, in fact, able – on the basis of objectively verifiable evidence adduced by the employer and having regard to the specific training and entire professional experience of the employee – to carry out the duties of those who were hired ex novo, even if it is at the same or lower level”.
The Court of Cassation, finding no such assessment in the contested judgment on the merits, therefore upheld the employee’s appeal.
Other related insights:
The draft Italian Legislative Decree on international taxation (implementing Italian Law of 9 August 2023, no. 111, containing “Delegation to the Government for the revision of the tax system”) which contains the new regime for impatriate workers is currently being discussed in the Chamber of Deputies within the Italian Parliament.
At present the text amends Article 16 of Italian Legislative Decree no. 147/2015, which regulates the regime governing impatriate workers’ employee income.
Among the new features, the draft Decree provides that the provisions will not affect “registry” transfers which take place by the end of the year. Therefore, the “special” tax regime reserved for impatriate workers will also apply to those who have transferred their registered residence to Italy in the second half of 2023.
Furthermore, the draft Decree provides that to fall within the category of impatriate workers during 2024, the work activity must be carried out in Italy with an employer other than the “foreign” one, including those belonging to the same group.
We are therefore awaiting discussion of the draft Decree, which is currently under examination by the Chamber of Deputies, to assess any further changes to the text.
Among the topics we explored at our Team Meeting this week was the area of employer checks carried out through investigative agencies, analysing Court of Cassation judgment of 11 October 2023, no. 28378. In that case a dismissal based on evidence collected by a private investigator who had not been indicated by name in the appointment document was declared null and void.
If you would like to learn more about this topic, contact us or request our slides here.
