With the recent judgment No. 20284 of 14 July 2023, the Italian Court of Cassation ruled that, even though not specifically provided for in the disciplinary code, breaches by the employee of the fundamental duties underlying the employment relationship are valid grounds for dismissal.
The facts of the case
An employee working as a Level I salesperson was dismissed by the employer company due to his constant failure to meet the production targets periodically set by the company.
The employee challenged the dismissal before the Court, which – by comparing the results achieved by the employee with the targets set by the company schedules – confirmed the unequivocal poor production performance of the worker. Therefore, the Judge hearing the case declared the dismissal to be lawful, classifying it as dismissal for a justified subjective reason.
The worker appealed the ruling before the Rome Court of Appeal, where he argued that the dismissal was unlawful due to the failure to display the disciplinary code in the company.
In this regard, the Court, in upholding the judgment of first instance, held that the failure to display the disciplinary code in the company was irrelevant for the purposes of determining the nature of the dismissal, since the worker was charged with negligent and inexperienced failure to fulfil his obligations under the employment contract, and that the dismissal was based on the worker’s poor production performance resulting from his constant failure to comply with the work schedules previously established.
For the Court, moreover, for the purposes of assessing the seriousness of the misconduct, previous disciplinary records that indicate the worker’s repeated offences must also be taken into account.
The worker therefore challenged the judgment of the Court of Appeal before the Italian Court of Cassation.
The decision of the Italian Court of Cassation
When confronted with the issue, the Italian Court of Cassation confirmed the rulings of the lower courts on the lawfulness of the dismissal.
First of all, the Judges of the Italian Court of Cassation reiterate that the power to terminate the employment contract in the event of significant breach of contractual obligations stems directly from the law (Article 3 of Italian Law No. 604 of 1966) and does not require, in order for it to be lawfully exercised, a detailed provision, in the collective bargaining agreement or in the company disciplinary regulations, of every possible instance of conduct constituting the above requirement. Indeed, it is for the judge to verify, if the lawfulness of the termination is contested, whether the alleged incidents constitute a legal case of non-performance.
For this reason, continues the Court, even if not specifically provided for by the contractual provisions, serious breaches of the fundamental duties associated with the employment relationship constitute grounds for valid notice of withdrawal; in particular, those duties that underpin the existence of the employment relationship, such as the duties imposed by Articles 2104 and 2105 of the Italian Civil Code (obligations of diligence and loyalty) as well as those deriving from company policies.
Therefore, according to the Italian Court of Cassation, with regard to disciplinary sanctions, a distinction must be made between offences relating to the breach of specific rules concerning company organisation and production methods, which can only be recognised insofar as they are expressly provided for, and offences relating to conduct that is manifestly contrary to the duties of workers and the interests of the company, for which specific inclusion in the disciplinary code is not required.
With regard to the disciplinary code, the judges reiterate that it must, in any event, be drafted in such a manner as to make the cases of infringement clear, although by providing an outline and not a detailed description, and to indicate the corresponding penalties, albeit in a general manner and which can be adapted based on the actual and specific non-compliance.
Ultimately, therefore, the aforementioned judgments uphold the lawfulness of the employer’s termination of employment even where the alleged breach of contract does not constitute a case that is expressly set out in the company’s disciplinary code or in the national collective bargaining agreement, but takes place by infringing the duties underlying the employment relationship.
Other related insights:
With its order no. 17287 of 27 May 2022, the Court of Cassation considered the dismissal for just cause of the Workers’ Safety Representative (“RLS“) legitimate. The RLS had used union (daily) leave for more than three continuous months, for purposes other than those for which they had been provided and granted, or for personal purposes. With this order, the Court of Cassation deals with the delicate issue of the allocation of the burden of proof underlying the dismissal.
In reforming the first instance ruling, the Court of Appeal, declared that a dismissal announced to an employee following an employer-investigation conducted while the employee was on leave related to the assignment under art. 50 Legislative Decree no. 81/2008 was legitimate. The results of the investigation, in the Court’s opinion, had shown the objective incompatibility of most of the activities carried out by the employee with those proper to his assignment. The employee had been seen repeatedly going to various city bars, taking walks along the promenade, entering businesses and attending to family duties.
The worker appealed to the Court of Cassation against the decision of the local court, citing as his sole ground of appeal the breach and misapplication of art. 2697 of the Italian Civil Code. The employee criticised the ruling which required him to prove the groundlessness of the contested charges, contrary to the established principle that it is the employer who must prove the existence of the just cause or subjective reason for dismissal.
According to the employee, such proof could not have been obtained based on the findings of an investigative report, since it was not representative of the tasks he carried out.
The Supreme Court, in rejecting the employee’s appeal, confirmed the correctness of the local court’s work. It found the contested ruling did not reveal a subversion of the burden of proof on the issue of just cause for dismissal.
In the Court of Cassation’s opinion, the local court, after analytically examining the findings in the file and those resulting from the private investigator’s examination, correctly held that it was the employee’s burden to offer elements capable of undermining that picture, a burden which was not fulfilled.
In other words, it was up to the worker to prove that he had been engaged in the performance of his duties as Workers’ Safety Representative. In the Court of Cassation’s opinion, this ruled out the alleged breach and false application of art. 2697 of the Italian Civil Code as a residual rule of judgement. As a result, the lack of elements suitable for ascertaining the existence of the right in dispute, within the preliminary investigation results, determined the loss of the party burdened with proving the related facts.
Other related insights:
The Court of Santa Maria Capua Vetere, by decree under art. 28, Law no. 300/1970, of 24 February 2022, stated that the dismissal of a trade union delegate, in the absence of prior authorisation from the trade union to which they belong, is ineffective and constitutes anti-union conduct.
The decision stems from an appeal filed by the trade union association to which the employee belongs (RSU delegate), which said the employer was guilty of anti-union conduct having imposed the dismissal for just cause, in violation of art. 14 of the Multi-industry Agreement of 18 April 1966.
The above rule, referred to by the Metalworking Industry’s National Collective Labour Agreement, for cases of disciplinary dismissal announced during the period of validity of the trade union office, provides that its operation is subject to the employer obtaining the authorisation of the trade union association to which the union representative belongs. The employer must notify the dismissal to the trade union delegate and the trade union association which rules on the expulsion measure within six days. The trade union organisation may refuse the authorisation, thus preventing the dismissal from taking place. If the trade union does not express its opinion within the following six days or does not decide to initiate the optional conciliation procedure under Article 14, the dismissal becomes effective.
The purpose of this procedure is to (i) verify that the dismissal is not instrumental and unjustified, and (ii) to avoid possible disturbances connected with the dismissal of a trade union representative.
Only after filing the appeal under Art. 28, Law no. 300/1970 by the trade union association, the company had activated the procedure, communicating the re-admission of the trade union delegate, to fulfil their purpose but exempting them from providing work.
The court noted that the absence of the request for authorisation by the employer entails the “inoperability” of the dismissal and counted as anti-union conduct. In the court’s view, the procedure’s start (following the appeal filing), with the simultaneous formal readmission of the worker to service did not result in the anti-union conduct ceasing to exist, as the company claimed, or the conclusion of the disputed matter.
What mattered to the Court for the purposes of the existence of the interest in bringing proceedings under Art. 28, Law no. 300/1970 was not only the existence of the anti-union conduct but its continued damaging effect. In this case, the damaging effects was that the employer effectively prevented the RSU delegate, who had been suspended from work, from accessing company premises and exercising their functions.
The court ordered the continuation of the employment relationship without exemption from work and for the time necessary to carry out the procedure under Article 14 of the Multi-industry agreement.
Based on previous case law, the decree held that the sanction of reinstatement under Article 18 of the Workers’ Statute does not apply in cases of nullity of dismissal. This is because the infringement of Article 14 is a breach of contract and not a breach of law. Dismissal is only invalid if the employer’s termination is based on the employee’s membership of a trade union or participation in trade union activities and is therefore discriminatory.
Other related insights:
With its judgement no. 21569 dated 3 September 2018, the Court of Cassation ruled on the consequences of disciplinary dismissal after expiry of the term set out in the Collective Bargaining Agreement. The ruling originated from the appeal brought by a worker against the dismissal enforced after expiry of the terms set out in the National Collective Bargaining Agreement for the Gas and Water Industry, due to the justifications rendered with regard to the conduct in question. More specifically, the court of appeal had granted to the worker only the indemnification safeguard, excluding that the non-observance of the terms set out in the National Collective Bargaining Agreement could imply the annulment of dismissal, thus resulting in the right to be reinstated in the position. Accepting the worker’s appeal, the Court of Cassation quashed the judgment of the court of appeal deeming that the violation of the rule relating to the term for the adoption of a disciplinary measure implies acceptance of the justifications and, consequently, the applicability of the actual protection set out in Article 18 (4), Workers’ Statute, resulting in the reinstatement of the worker concerned. Specifically, the judges of the Court of Cassation remarked that ‹‹on the basis of the provisions set out in Article 21/2 (3) National Collective Bargaining Agreement for the Gas and Water Industry, it does not seem possible to assume any consequences other than the obligation to proceed to the indicated specific activity within the set term and the fictio of the acceptance of the justifications in the event of non-fulfilment of the aforementioned obligation››. Therefore, according to the Court of Cassation, the dismissal ‹‹must be considered not only ineffective for the non-observance of a procedural term but also unlawful for the inexistence of the conduct complained – as the employer had accepted the justifications in excuse of the worker – and therefore for a total lack of an essential element of just cause. The logical/legal reasoning made by the Court of Cassation seems to stir up the debate on the relevance of procedural terms when dealing with sanctions. This is an interpretative doubt that in fact may have particularly different consequences – to be evaluated on the basis of the applicable contractual provision (which may also not provide for the automatic effect of the acceptance of justifications after expiry of the applicable term) – and result in different protection schemes.
The Court of Cassation, with judgement No. 17514 dated 4 July 2018, deemed justified the disciplinary dismissal ordered to a bus driver of a private rental company who, during a long period of absence from work for an ongoing injury, was found to be working for a car parking facility. On the same date, on 4 July 2018, the Court of Cassation has issued another order, No. 17424, where instead it ruled as unlawful a dismissal order to a disabled employee who could not work due to a gastroenteritis, who, during a period of absence, performed a self-employed activity offering outdoor painting services. The aforementioned conclusions, apparently contradictory, in truth find their common ground in the principle according to which carrying out a different work activity during leave from work due to illness cannot automatically lead to disciplinary consequences. This because it is necessary to check if such activity is incompatible with illness condition or such to impede or delay healing. Specifically in light of the above, the Court, with judgement No. 17514, deemed that the actions performed by the employee “appeared ictu oculi incompatible with the declaration of illness or however certainly such to delay if not even compromise physical recovery”. On the other hand, with order No. 17424, the Court verified that “the carrying out of the (extra) work activity during illness was not incompatible with the illness hindering the work activity, and it did not impair the normal psycho-physical health recovery”.
