With Order no. 31660 of 14 November 2023, the Italian Court of Cassation ruled that, when dismissal for justified objective reason (giustificato motivo oggettivo, ‘GMO’) is to reduce costs, the burden is on the employer to indicate the reasons why the particular worker has been chosen.
The employee appealed the dismissal for abolition of his job position before the Court. The reason given by the employer was based on the need to reduce costs, as part of a policy to remedy the budget deficit.
The Italian Court of Appeal, rejecting the complaint filed by the worker against the judgment handed down by the first-instance judge, ruled that, “having established the budget deficit, the dismissal of the worker was necessarily linked to the need to achieve savings in a particular area of work”.
In relation to the worker’s submissions which related to the fact that another, more costly job had not been eliminated, the Territorial Court stated that these were “unchallengeable employer decisions”.
The Court of Appeal’s decision was appealed by the worker on multiple grounds.
The Italian Court of Cassation – accepting the appeal filed by the worker – ruled that, in the context of a dismissal for justified objective reason, the actual existence and extent of the organisational and/or business reason linked to a cost reduction policy must be assessed.
This assessment cannot be separated from the assessment of the necessary causal link between the objective reason given and the abolition of the job position.
This is because, where a general need to proceed with a cost-reduction policy has been argued, it becomes necessary to analyse (and the burden is on the employer to provide the relevant proof) the reasons why a particular worker has been chosen.
This analysis – in the opinion of judges of the Italian Court of Cassation – should not be considered to be undue interference in the discretion of employers’ choices, because the non-existence of the economic reason raised affects the very lawfulness of the dismissal “not because it is a review of the reason underlying the justified objective reason, but because it gives rise to a factual assessment of the lack of truthfulness or the pretextual nature of the reason given by the employer”.
Since no such analysis was found in the contested judgment on the merits, the Italian Court of Cassation then upheld the employee’s appeal and set aside the judgment of the Court of Appeal by referring the case back to the Court of Appeal.
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In both the public and private sectors, all workers should have access to information on individual wage levels and average wage levels broken down by gender.
By 7 June 2026 EU states must implement European Directive 2023/970 which came into force on 6 June 2023. The directive introduces new obligations for employers on transparency and equal pay.
The goal of the European legislature is to reduce the wage gap through the introduction of specific pay transparency requirements.
According to the directive’s “recitals”, within the EU women earn on average 13 % less than men for the same work, and this gap stems from “a lack of transparency in pay systems”.
Scope and employers’ obligations
Going into the details of the EU provisions, the scope of the directive encompasses all employers, both public and private, and imposes obligations of wage transparency right from the selection stage.
Specifically, regarding the pre-employment stage, there is a requirement for employers to provide male and female job applicants with detailed information regarding job-specific wage levels. In addition, employers will be prevented from requesting information on current or past salaries of male and female job applicants.
On the other hand, employers are required to provide all male and female workers with access to information on individual wage levels and average wage levels broken down by gender during the employment relationship.
Additional disclosure and transparency requirements are then provided with respect to information on the gender pay gap identified by categories of workers and broken down by fixed and variable components of pay. In fact, such information should be addressed to all male and female workers, their representatives and, upon request, to the Italian Labour Inspectorate and equality bodies.
Under the directive this parties are entitled to seek clarification with respect to the information provided. Where pay differences found are not justified by objective criteria, it will be the employers’ obligation to remedy them.
Reporting on pay gap
The timing and frequency of these reports depends on the number of employees. In particular:
1) for employers with at least 250 employees, the obligation will take effect on 7 June 2027, and annually thereafter;
2) for employers with a workforce of between 150 and 249 employees, the obligation will take effect on 7 June 2027, and every three years thereafter;
3) for employers with a workforce of between 100 and 149 employees, the obligation will take effect on 7 June 2031, and every three years thereafter.
Continue reading the full version published in Norme & Tributi Plus Lavoro of Il Sole 24 Ore.
Since the beginning of 2023, a task force at law firm De Luca & Partners has been entirely dedicated to the new decree on Whistleblowing which requires employers to implement a system of safeguards and protection for those who report crimes and irregularities in the workplace. The task force offers legal support to companies in adopting the necessary procedures to ensure compliance with all aspects of the legislation.
According to a task force survey on the current state of play of actual implementation of the regulations by Italian companies, it appears that they are still far from compliant with the provisions that, by 17 December 2023, must be adopted by even the smallest organisations, with between 50 and 249 employees. Specifically, it is in the area of company procedures, such as the identification of breaches that can become reportable or the recipients of reports, that companies show a general lack of compliance. “We note a general tendency to underestimate the complexity of the activities to be carried out to comply with the provisions of the Whistleblowing Decree”, notes Vittorio De Luca, managing partner of De Luca & Partners. “Just to mention the main areas, all aspects of the process must be detailed in specific company procedures. Companies are delaying the careful consideration necessary to assess through which system, including computerised systems, they should make reports, in full compliance with current privacy legislation. Not only that, but it is also necessary to ensure that the disciplinary code adopted is adequate to avoid invalidating any disciplinary measures taken. And this is all in the context of regulatory framework that contains two significant risks for the failure to adopt an appropriate report management process: a fine of up to EUR 50,000, and the loss of the exemptions provided for in Italian Legislative Decree no. 231/01”, concludes Mr De Luca.
Continue reading the full version on L’Economia of Il Corriere della Sera.
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.
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