By order No 770, of 12 January 2023, the Italian Court of Cassation ruled on the lawfulness of dismissal for just cause of a worker who, as part of her work performance, had not complied with the performance procedures set out in a specific company policy.
According to the Supreme Court, with regard to dismissal for just cause, the employee’s refusal to perform the services in the manner indicated by the employer is sufficient to justify dismissal for just cause, unless such refusal is based on good faith.
The facts of the case
In the case dealt with in the order in question, the worker – a supermarket cashier – had been fired for just cause for allowing three customers to pass through the tills leaving the products in the trolleys and for failing to ask them to put the goods on the conveyor belt as required by company regulations.
It was also claimed that the worker had failed to perform a direct check of the products in the trolley, limiting herself to recording on the cash register the quantities of each type of product indicated by the customers themselves.
The price paid by the three customers turned out to be, following the subsequent intervention of the police called by the security officer, significantly lower than the quantity of goods that were present in their trolleys.
The first instance judge considered the worker’s dismissal to be lawful, as she was guilty of negligent conduct.
The Rome Court of Appeal overturned the judgment issued in first instance, and, following the appeal brought by the Company, the matter was brought to the Italian Court of Cassation.
The Italian Court of Cassation’s Order
The judges of the Italian Court of Cassation, in confirming the lawfulness of the worker’s dismissal, analysed in detail the rules referred to in Article 1460 of the Italian Civil Code relating to the exception of non-performance, in this case, within the framework of an employment contract.
The Court noted that on the subject of one of the parties’ non-performance of an employment contract, previous rulings had considered that the employer’s non-performance does not automatically legitimise the employee’s refusal to perform.
As this is a contract for consideration, the provisions of Article 1460, paragraph 2, of the Italian Civil Code apply, according to which the performing party may refuse to perform the service at its own expense only if such a refusal, having regard to the concrete circumstances, is not contrary to good faith (Italian Court of Cassation, No 434 of 2019; Italian Court of Cassation, No 14138 of 2018; Italian Court of Cassation, No 11408 of 2018).
The court must therefore carry out a comparative evaluation of the opposing performances having regard also to their proportionality with respect to the financial-social function of the contract and their respective impact on the balance between the parties and their interests. This gives rise to the consequence that where the non-performance of one party is not serious or of little importance in relation to the interest of the other party, the latter’s refusal to perform its obligation cannot be considered to be in good faith and, therefore, is not justified under Article 1460, paragraph 2 of the Italian Civil Code (Italian Court of Cassation, No 11430 of 2006).
On the subject of dismissal for just cause, the worker’s refusal to perform the service in the manner indicated by the employer is capable, where not based on good faith, of causing the loss of confidence in the future performance. This in turn therefore justifies termination, since non-compliance with the employer’s measures, albeit unlawful, must be assessed, from a sanctioning standpoint, in light of the provisions of Article 1460, paragraph 2 of the Italian Civil Code, according to which the performing party may refuse to perform the service at its own expense only if such refusal is not contrary to good faith, having regard to the actual circumstances (see Italian Court of Cassation, No 12777 of 2019).
In the present case, according to the Italian Court of Cassation, the Rome Court of Appeal scrupulously adhered to the principles mentioned above in holding that:
In light of the above principles, the Court confirmed the unlawfulness of the worker’s dismissal with the application of the ‘mitigated’ reinstatement protection provided for by Article 18, paragraph 4, of Italian Law No 300/1970 (applicable to the present case).
Other related insights:
The Court of Milan, in judgment No 2652 of 11 November 2022, returned to the issue of the appealability of conciliation statements, ruling that in the absence of a res litigiosa (dispute), the minutes cannot be classified as settlement agreements, with the consequent potential ability to challenge the waivers contained therein.
The facts of the case
On the termination of a works contract, the workers employed on the contract were told that, if they wished to continue working for the successor contractor, they would have to sign conciliation minutes at the trade union offices, declaring, under Article 2113, paragraph 4 of the Italian Civil Code, that they no longer had any rights arising under the previous employment relationship.
The workers signed these conciliation minutes, waiving, among other things, claims for a higher classification on the basis of the tasks actually performed and the payment of the corresponding salary differences.
The signatory workers challenged the signed minutes, bringing an action before the employment court to obtain their annulment and, consequently, the ascertainment of the higher contractual classification level and an order against the company to pay the salary differences.
The Court of Milan’s judgment
The Court of Milan, in upholding the challenge brought by the workers, ascertained that the challenged conciliation minutes could not be considered to be a settlement agreement, since the agreements entered into by the parties lacked the essential element of a settlement agreement, i.e., the res litigiosa.
Under Article 1965 of the Italian Civil Code, a settlement is defined as a contract by which the parties, by making mutual concessions, put an end to a dispute that has already begun or prevent a dispute that may arise between them.
A reading of this provision shows, therefore, that the typical basis of the settlement is to resolve or avoid a dispute, with mutual concessions by the disputing parties.
Consequently, the Milan Court, on the basis of these principles also confirmed by the case law of the Italian Court of Cassation (amongst many see: Italian Court of Cassation No 8917/2016), found that, since the so-called res litigiosa did not in any way emerge from the agreements signed by the applicants, such agreements ‘cannot be classified as settlement agreements, but simply as documents regulating the conclusion of the relationship, without any preclusion on the bringing of legal proceedings’.
Altri insights correlati:
Settlement report: challengeable if signed with a union other than the employee’s union
Minutes of the conciliation meeting: voided if the worker has been deceived
The Italian Budget Law 2023 (Italian Law No 197/2022) was published in the Official Journal (Gazzetta Ufficiale) on 29 December 2022 and comes into force on 1 January 2023 and introduces the following important initiatives in the employment law field.
Agile working: as of 1 January 2023, the categories of workers with the right to agile working will be reduced. Until 31 March 2023, only so-called ‘vulnerable’ persons will have this right, workers with children under 14 being excluded.
Parental leave: an extra month of optional, 80% paid parental leave is introduced. The leave may be taken by either parent, alternatively, until the child is six years old.
Recruitment incentives for permanent contracts: for the whole of 2023, there will be incentives for the recruitment of permanent hires with a contribution threshold of up to EUR 8,000 for those who already have a fixed-term contract and in particular for women under 36 and for citizenship income recipients.
Productivity bonuses: as of 2023, the taxation of productivity bonuses will decrease from 10 per cent to 5 per cent. The preferential taxation applies to variable bonuses not exceeding EUR 3,000.
Temporary income: the possibility of using temporary employment services is extended by increasing the maximum limit of remuneration that can be paid by each employer from EUR 5,000 to EUR 10,000 per year. These temporary services may also be used for agricultural activities, as well as by employers with up to ten employees on permanent contracts, instead of five.
Vouchers: employment vouchers for temporary services are back, with a limit rising from EUR 5,000 to 10,000, for temporary services used in certain sectors, including agricultural activities, the hotel industry, personal care activities, and domestic work.
Pensions: there is a lot of news on the pensions front. The renewal for 2023 of the Early Pension (Anticipo Pensionistico – ‘APE Sociale’) and the extension of the Woman’s option 2023 (Opzione donna 2023) are confirmed, the latter with some limitations on the prerequisites with respect to the original measure (only for caregivers, women with disabilities and employees of companies in crisis). Introduction of the new ‘Quota 103’ whereby the pension prerequisite is reached at the age of 62 and after 41 years of contributions, but only applies to 2023. Finally, a new pension revaluation system for the years 2023 – 2024 is also in the offing.
Self-employment: the flat-rate regime, which provides for taxation at a rate of 15 per cent, will apply to revenues up to EUR 85,000, instead of the current EUR 65,000.
Other related insights:
Covid-19 and right to the use of parental leave: INPS provides the first indications
In the event of repeated absences – which have not exceeded the limit of the protected period – the onus is on the employer to prove the additional reasons justifying the dismissal.
Dismissal based on an employee’s repeated absences from the workplace on days close to rest days and/or public holidays constitutes an unfair and arbitrary reaction by the employer to the legitimate exercise of the employee’s right to be absent due to illness and, therefore, must be considered discriminatory and retaliatory if the protected period established by the collective agreement has not been exceeded.
This was the conclusion reached by the Court of Naples in its judgment of 14 September 2022 on the basis that the employer may not terminate the relationship before the tolerable absence limit (the so-called ‘protected period’) has been exceeded.
The case before the Court related to the dismissal for just cause of an employee who was repeatedly absent for short periods usually close to rest days, public holidays or holidays. In the company’s opinion, the absences had made his work performance objectively unusable and discontinuous and caused serious and onerous disruption to business organisation.
The Court held that the dismissal was unlawful, referring, first of all, to the legal provision governing the sickness, i.e., Article 2110 of the Italian Civil Code. That legislative provision, in essence, establishes a balance between the employee’s interest in keeping his/her job for a determined period of time and the employer’s interest in not having to bear for an indefinite period of time ‘the repercussions that such absences have on business organisation’. In fact, exceeding the protected period, usually defined by collective agreement, would have the effect of jeopardising the employer’s right to receive consistent and regular services from the worker and, therefore, to satisfy fully the organisational purposes of the business.
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The Court of Rome differs from the Capitoline Court of Appeal guidelines over the exclusion of the dismissal prohibition for managers during the Covid emergency.
Measures to combat Covid 19 – Decree Law no. 18/2020 and Decree Law no. 104/2020 – Dismissal prohibition for objective justified reason – Manager – Dismissal for position redundancy – Prohibition breach – Not applicable
The emergency legislation on prohibiting dismissal for objective justified reasons is exceptional and cannot be applied to similar cases not expressly mentioned by the regulation. This means that the dismissal prohibition cannot be applied to an individual manager’s dismissal.
Court of Rome 25 October 2022, no. 8722
A few months after the Rome Court of Appeal ruled in favour of the applicability of the dismissal prohibition to managers, the Capitoline Court, in its recent ruling no. 8722 published on 25 October 2022, came to an opposite conclusion.
FACTS OF THE CASE
In August 2020 – the period covered by the general dismissal prohibition for objective justified reasons under Decree Law 14/8/2020, no. 104 – an employer company dismissed a manager for objective financial reasons.
Considering that managers were included in the group of workers protected by the dismissal prohibition under the emergency regulations, and as part of the first phase of the Fornero Procedure, the Judge declared the dismissal null and void, ordered the manager immediate reinstatement, and the company to pay the remuneration due from the dismissal date until reinstatement.
The company appealed against this decision before the Court of First Instance.
LEGISLATION AND CASE-LAW
Art. 46 Decree Law 17 March 2020, no. 18 prohibited collective dismissal procedures and employers from “terminating the contract for objective justified reasons under Art. 3 of Law no. 604 of 15 July 1966” regardless of the number of employees.
The dismissal prohibition applicable to this case was extended and subjected to further conditions and exceptions, by Decree Law 14/8/2020, no. 104.
The provision stated that, to cope with the COVID-19 emergency, private employers who partly benefited from the wage subsidies or the exemption from the payment of social security contributions could not terminate employment contracts for objective justified reasons under Art. 3 of Law 15/7/1966, no. 604 of 15/7/1966, regardless of the number of employees. The ongoing procedures at the Local Labour Inspectorate referred to in Art. 7 of the same law, were suspended.
The prohibitions and suspensions listed above did not apply in the following cases:
a) redundancies due to the definitive cessation of the company business, resulting from the company liquidation without any business continuation;
b) collective bargaining agreement, stipulated by the trade unions that are comparatively more representative at the national level, as an incentive to terminate the relationship;
c) redundancies due to bankruptcy when there was no company provisional operation or business termination.
Since the introduction of the dismissal prohibition, two opposing approaches have alternated in legal theory and case law on the applicability of this emergency legislation to individual dismissals of managers.
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