With order No 12244 of 9 May 2023, the Italian Supreme Court of Cassation confirmed that if an employee refuses to go from full-time to part-time, he/she may be lawfully dismissed if the dismissal is not based on the employee’s refusal but is because the employer is unable to use the employee’s full-time services.
The facts of the case
Following the sale of a company branch (consisting of the supermarket at which the employee was employed) the three shareholders in the transferee company had decided to work at the shop and, therefore, the workforce was oversized. To deal with the situation, the three full-time employees, including the employee, were asked about their willingness to reduce working hours.
The employee refused to move from full-time to part-time and, consequently, the Company, as it was unable to use the employee’s full-time services, dismissed the employee for justified objective reasons.
The employee challenged her dismissal, alleging, primarily, that the dismissal was retaliatory and, in the alternative, that it was unlawful.
The Court declared the dismissal unlawful, but not retaliatory and ordered the Company to reinstate the applicant or to pay her compensation equal to five months’ total actual salary under Article 8, Italian Law No 604/66.
In the second stage of the same proceedings at first instance, the Court rejected both the employee’s main claim seeking a declaration of nullity of the dismissal, and the Company’s ancillary claim, seeking a declaration of the lawfulness of the dismissal for justified objective reasons.
The Court of Appeal, hearing only the employee’s appeal, upheld the decision taken by the Court, rejecting the complaint brought by the employee.
The employee appealed to the Court of Cassation against that ruling, challenging the Court of Appeal’s judgment for having rejected the retaliatory nature of the dismissal.
The decision of the Italian Supreme Court
The Italian Court of Cassation noted, preliminarily, that Article 8, paragraph 1, of Italian Legislative Decree No 81/2015 states that ‘the employee’s refusal to transform his or her full-time employment relationship into a part-time relationship, or vice versa, does not constitute justified grounds for dismissal’.
According to the Italian Court of Cassation judges, this rule, on the one hand, excludes the possibility that the refusal to transform the relationship into part-time can constitute in itself justified grounds for dismissal. On the other hand it does not preclude a dismissal being lawful for objective reasons in the event of a refusal to go part-time, entailing – in the words of the Court – ‘a remodulation of the justified objective ground and the burden of proof’ placed on the employer.
The Italian Court of Cassation judges stated that, in this situation, for the purposes of the lawfulness of the dismissal, the following prerequisites must be met and proved by the employer:
The provision referred to in Article 8, paragraph 1, set out above should not, therefore, be understood in an absolute sense, as a blanket prohibition. It is, rather, a prohibition to be read in a strictly literal way, which does not preclude the possibility of a lawful dismissal for inability to use full-time services associated with the employee’s refusal to change to part-time.
In the event of such a refusal, in other words, it becomes ‘a component of the wider burden of proof‘ on the employer who has ordered a dismissal on the basis of objectively justified reasons owing to economic and organisational difficulties.
Nevertheless, as noted by the Italian Court of Cassation itself, the possibility cannot be excluded that a dismissal is, in fact, retaliation for an employee’s refusal to transform his or her employment relationship with a reduction in working hours. As is known, in this case the dismissal would be null and void, but the nullity must be supported by the employee proving that that the retaliatory intent was the exclusive reason for the dismissal, including with respect to other elements that may be relevant to a just cause or justified reason.
In particular, with reference to the present case, the Italian Court of Cassation judges concluded that ‘the Court of Appeal, given that the [lower] court declared the dismissal unlawful for justified objective reasons for failure to prove the reasons given (and that the related decision was not challenged by the company), excluded the possibility that the dismissal was based on a single and decisive retaliatory ground against the current applicant […]. Therefore, there is no room for holding that the breach of the legal provisions complained of is established, nor can the judgment be claimed to suffer from the defect of apparent reasoning apply given that the appellate decision does not present any of the hypotheses of ‘anomaly of grounds’ appealable before the Court of Cassation’, with the consequent rejection of the appeal brought to the Court of Cassation by the employee.
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In its judgment 15465 of 3 June 2021, the Employment Chambers of the Court of Cassation ruled once again on the peculiarities of dismissal for just cause imposed on an employee carrying out other work during sick leave.
In particular, a disciplinary dismissal was ordered against a civil servant who, following a personal accident and producing medical certificates relating to an alleged depressive anxiety syndrome, was granted a period of sick leave during which, however, he was filmed by a detective agency while working for his daughter’s business, thus demonstrating that he had no physical or psychological disorder.
Following the employee’s appeal against his dismissal, it was found out during the first instance proceedings that the work carried out thereby for the other business was not occasional, rather it was ongoing and characterised by an involvement that was no less demanding than that required for the performance of his duties as a white-collar employee for the State Property Agency. On appeal, it was also found out that the medical certificates concerning the existence and nature of the disorders that had affected the employee since his personal accident were not consistent with each other. Therefore, the Court of Appeal held that the employee had no depressive anxiety syndrome and that, even if it existed latently, there was no nexus with his personal accident.
The Court of First Instance and the Territorial Court thus rejected the employee’s appeal, holding that his dismissal was lawful. The employee thus brought an appeal before the Court of Cassation, arguing, firstly, that the judgment on the merits had failed to establish the ‘non-occasional’ nature of his alleged work activity and, secondly, that the applicable collective agreement had been infringed since it provided for suspension from work with no pay, for up to 10 days, where “other activities are carried out during the state of illness or injury that are incompatible with and prejudicial to recovery”.
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The Court of Cassation, in its ruling of 16 March 2021, no. 7360, established that where the employee dismissed for justified objective reasons had made themselves available for transfer only in certain areas, the employer must prove it is impossible to relocate them in those offices to avoid incurring in the repêchage obligation violation.
An employee appealed against her dismissal for justified objective reasons following the closure of the local unit where she was employed as a store manager.
The relevant Court of Appeal, changed the first instance ruling, rejected the appeal presented by the employee, claiming the lack of violation of the repêchage obligation because she was only willing to be transferred only to one of the offices of the employer, located in Campania or lower Lazio.
The employee appealed against the court’s decision.
The Court of Cassation confirmed the ruling of the District Court and, taking up some of its established guidelines, stated preliminarily that: “in the matter of dismissal for a justified objective reason, it is up to the employer to allege and prove the impossibility of repêchage of the dismissed employee, as a requirement of the legitimacy of the employer’s termination. The employee does not have to provide evidence of the assignable positions, as a gap between those burdens cannot be classified from a procedural point of view.” (see ruling no. 5592/2016; ruling no. 12101/2016 and ruling no. 160/2017).
For the Court of Cassation, this burden is discharged by the employer when it proves that there is no possibility of relocating the employee dismissed in an office included within the area where they are willing to move. Although the employee does not have to provide any evidence, defining the spatial scope of interest in the judicial application, it allows the employer not to make claims about the possible relocation in offices located in different areas
On these grounds, the Supreme Court rejected the employee’s appeal, deeming that the respondent company had met its burden of proving that it did not have any vacancies in Campania and lower Lazio.
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The Supreme Court of Cassation, in its decision 1514/2021, published on 25 January 2021, referencing well-established principles, provides a clear overview of the production-related factors that justify dismissal for objective reasons, emphasising that once the objective reason for the work termination has been established, it is unnecessary to investigate its potentially retaliatory nature.
The Court’s ruling is based on an appeal brought by an employee against a decision of the Court of Appeal of Cagliari, which had declared legitimate the employee’s dismissal, communicated based on justified objective reasons, by a religious congregation where the employee worked as manager.
More specifically, the District Court had considered the dismissal to be legitimate in view of the economic difficulties affecting the facilities managed by the Congregation, which had imposed reduced costs and a revamped work organisation, implemented by removing the employee’s official role which represented the highest cost for the Congregation, and the duties in question were assigned to another nun without pay.
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The Court of Cassation, with its ruling no. 16253 of 29 July 2020, expressed its opinion on the applicability of the “mitigated” reinstatement protection (with employment re-establishment and compensation up to a maximum of 12 months’ salary) in cases with no underlying cause for dismissal for objective justified reasons.
The case in question originates from a judicial appeal by an employee against dismissal based on justified objective grounds after the contract under which they were employed was terminated.
The Court of Appeal of Rome, hearing the employer’s complaint, upheld the worker’s request and confirmed the first instance decision declaring the dismissal illegitimate on the assumption that the defendant company had not demonstrated a relationship between the loss of the contract and the loss of the redundant worker’s usefulness.
The Board of Appeal ruled that the contract termination did not constitute an objective justified reason for dismissal in the absence of proof of the necessary causal link between the organisational and production reason underlying the employment termination, given that the employee was not exclusively or predominantly involved in that contract.
The losing company appealed to the Court of Cassation against the decision on the merits, complaining about the incorrect application of paragraphs 4 and 7 of article 18 of Italian Law 300/1970.
The Court of Cassation, in rejecting the appeal filed by the company, focused on analysing the discrimination between the application of the indemnity protection under art. 18, paragraph 5 (all-inclusive indemnity between a minimum of 12 and a maximum of 24 months’ salary) and the “mitigated” reinstatement protection provided for in art. 18, paragraph 4 in cases of dismissal for objective reasons, under Article 18, paragraph 7 of Italian Law 300/1970.
This last provision grants the judge the power to apply the “mitigated” reinstatement protection rules in cases where they find “a lack of an underlying cause for dismissal for objective justified reasons.”
According to the Supreme Court, the legislator’s intentions should be interpreted in the sense of attributing a residual nature to reinstatement protection which functions as an exception to the indemnity protection rule in cases of dismissal for objective justified reasons.
The Supreme Court recalled a recent ruling (Cassation decision no. 29101 of 11 November 2019), on individual dismissal for justified objective reason, “the lack of a causal link between the employer’s termination and the underlying reason can be classified within the evidence required to supplement the manifest lack of a cause that justifies the mitigated reinstatement protection under article 18, paragraph 7, Italian Law 300/1970 as amended by Law 92/2012.”
The Court of Cassation observed that “the absolute lack of connection between the contract termination and the work carried out by the worker, led the Court to exclude the existence of a causal link and the fact constituting a justified objective reason for dismissal.” The Court continued: this “ictu oculi” absence, would result in the “manifest lack of fact as it appears to be so evident to have correctly induced the second instance judge to opt for a mitigated reinstatement protection referred to in paragraph 4 of article 18 in its combined effect with the seventh paragraph.”
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The judgement raises many doubts about the long-standing uncertainty regarding the application of reinstatement protection in cases of dismissal for justified objective reasons deemed unlawful. The Court’s conclusion appears controversial in a certain sense, as it supports the residual nature of reinstatement protection opposed to indemnification. However, it links the concept of manifest absence of the cause underlying the dismissal (which allows the judge to apply mitigated reinstatement protection) to cases in which the judge considers there is a lack of a causal link.
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