The Supreme Court, by its decision no. 28171 of 31 October 2024, confirmed the validity of a dismissal notified to the employee’s previous address if the employee did not promptly notify the employer of his change of residence or domicile.
The employee, challenging the dismissal, challenged the validity of the notification made to his original address, arguing that, because of his transfer, that notification should be considered invalid.
The Court, rejecting the appeal, ruled that “the dismissal sent to the known address is fully effective, if done within the prescribed time limits”, as it is the worker’s responsibility to notify any change of residence or domicile in writing, as stipulated by the NCBAs and by the principle of good faith that governs the employment relationship. In particular, the Supreme Court referred to Article 1335 of the Civil Code, which states that a communication is deemed to be known at the time it is sent to the known address, and clarified that the employee’s failure to communicate the change of residence does not affect the validity of the notification. This principle was also extended to the letter of disciplinary notice, which is therefore to be considered fully effective once it reaches the employee’s original address.
In its decision no. 10104 of 12 October 2024, the Court of Rome ruled that in the case of a disciplinary dismissal without prior notice, there is not a mere formal deviation from the procedural scheme of the regulation, but an actual nullity which always gives the employee the right to reinstatement.
The employee, a pastry chef at a commercial establishment with less than 15 employees, was dismissed for just cause without a prior disciplinary notice.
The employee challenged in Court the disciplinary dismissal inflicted, claiming – among other things – a breach of the procedure laid down by Article 7 of Law 300/1970, since the employer had failed to give him prior notice of the charge.
The Court of first instance of Rome, preliminarily stated that the employer was an enterprise with fewer than 15 employees and that the employee was hired after the entry into force of Legislative Decree no. 23/2015.
In the absence of the dimensional requirement provided for by Article 18, paragraph 8 and paragraph 9, of Law no. 300/1970, it was therefore necessary to identify the protection applicable to dismissal without prior objection, since this hypothesis was not expressly provided by law.
The Judge has therefore reviewed the regulations contained in Legislative Decree no. 23/2015 in order to identify the protection applicable to the case examined.
The Court of Rome has preliminarily excluded the application of Article 3 (paragraph 2) of Legislative Decree no. 23/2015, since, as known, reintegration protection due to the absence of facts is excluded in the case of companies with less than 15 employees.
Nor did the protection provided by Article 4 of Legislative Decree no. 23/2015, which relates to violations of a purely formal nature, apply to the case under review (whereas the complete absence of a challenge does not constitute a mere formal breach, but rather a breach with substantive consequences).
Even the protection provided for by Article 3 (paragraph 1) of Legislative Decree no. 23/2015, which regulates the hypotheses in which “it is established that the grounds for dismissal for objective justified reason or subjective justified reason or just cause do not exist”, appeared to be not applicable to the case examined.
The Court of first instance, therefore, referred to the Supreme Court’s case law, stating that “the nullity of a disciplinary sanction due to a breach of the procedure aimed at its imposition […] falls within the so-called protective nullities, as it is of a mandatory nature and is intended to safeguard the weaker party in the relationship, namely the employee” (Supreme Courte no. 12770/2019).
In line with the aforementioned case law of the Supreme Court, the Court of Rome therefore ruled that the nullity of a disciplinary sanction for breach of the legislative procedure laid down for its imposition falls – precisely – within the category of protective nullity, given that the guarantee procedure laid down in disciplinary matters (by Article 7 of the Labour Statute) is mandatory and is based on the obvious aim of protecting the weaker party of the contract (i.e. the employee).
On those grounds, the Court of Rome – ruling that the said nullity was established, given the failure to comply with the procedure laid down as a guarantee for the employee – upheld the claim brought by the employee, ordering the employer to reinstate him in service.
Other related insights:
According to Article 29, paragraph 2, of Legislative Decree 276/2003 (known as the “Legge Biagi”), in the context of service contracts (“contratti di appalto” in Italian parlance), the principal company or employer is jointly and severally liable with the contractor, as well as with any subcontractors, within two years after the termination of the contract, for the payment of amounts owed to workers for work performed during the contract period, including:
However, joint and several liability does not apply to civil sanctions, for which only the defaulting party is responsible.
Consequently, in the context of service contracts, although the obligation to pay salaries and social security contributions falls on the contractor — the company directly hiring the workers and managing the service contract — Italian law assigns the principal a “guarantee” role regarding these obligations, introducing a genuine joint obligation on the principal.
In concrete, this guarantee allows workers to act against either the contractor or the principal to obtain payment of unpaid salaries owed for work performed under the service contract.
Moreover, the principal’s joint and several liability also applies to compensation and social security obligations of self-employment workers, pursuant to Article 9 of Legislative Decree 76/2013, converted with amendments into Law No. 99 of August 9, 2013.
The principal’s joint and several liability is subject to a two-year limitation period, starting from the termination of the contract. However, this two-year period applies exclusively to claims made by workers, while, according to case law, it does not apply to recovery actions initiated by social security or insurance institutions such as INPS (the Italian National Social Insurance Agency) or INAIL (the Italian National Institute for Insurance against Accidents at Work), which remain subject to a five-year statutory limitation period.
The principal, who, due to joint and several liability, has paid the workers the salaries or contributions owed, may seek recovery from the contractor under the general rules provided by the Civil Code. However, the principal can no longer invoke the benefit of prior enforcement against the contractor, as was allowed until 2017.
Finally, the Court of Cassation recently stated that joint and several liability between the principal and the contractor is not limited to contracts formally classified as “service contracts”. It applies whenever workers are employed in a mechanism of outsourcingwhere “detachment between the ownership of the employment relationship and the utilization of the labor activity was established, which could justify applying the guarantee provided by Article 29” (see Court of Cassation, Labor Section, order no. 26881 of October 16, 2024). Based on this principle, joint liability has been deemed applicable, for example, in cases of “department delegation contracts” (“affidamento di reparto” in Italian parlance) or supply contracts.
Other related insights:
The Italian employment sector, which has recently brought this issue back into focus in its discussions, might view this question as somewhat provocative.
Under our legal system, remote working is defined as a mode of execution of the employment relationship, which is to be established through an agreement between the parties. This means that the employee could request it, but it is ultimately up to the employer to decide whether or not to introduce this mode of executing work duties within their organization. The employer has the discretion to make this decision without even needing to provide any justification—current Italian law does not require the company to offer explanations or reasons.
In contrast, the approach proposed by the UK Labour government seems to go in a different direction. On October 10th, the so-called “Employment Rights Bill” was introduced and explained to Parliament—a bill that, in twenty-eight points, aims to reform workers’ rights in the UK.
Among the numerous reforms that the proposal seeks to introduce, which have already sparked both anticipation and concerns from businesses, the “Employment Rights Bill” promotes flexible working to such an extent that “working from home” could become the default rule for all employees—provided that the tasks assigned are compatible with this mode of performing work duties. Specifically, the bill provides that employees can, from the very first day of employment, request to work flexibly, and, on the other hand, the employer has the possibility to refuse a request, but only if they can demonstrate a legitimate reason for doing so.
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The Italian Court of Cassation, called upon to rule on the possibility of applying the joint and several liability provisions of Article 29 of Legislative Decree 276/2003 to service contracts other than those formally governed by Article 1655 of the Italian Civil Code (“contratti di appalto” in Italian parlance), with its recent judgment no. 26881 of October 16, 2024, has stated an important legal principle that extends beyond the issue of joint and several liability and impacts the entire legislative framework concerning fictitious labor outsourcing.
The judges of legitimacy, after reaffirming the background behind the joint and several liability stated in Article 29—that is, to avoid the risk of situations where workers suffer adverse consequences due to outsourcing practices—highlighted that, in the case of an atypical mixed-purpose agreement commonly used in large-scale retail, it is not a question of the precise classification of the contract, but rather “the need to determine whether a mechanism of outsourcing and detachment between the ownership of the employment relationship and the utilization of the labor activity was established, which could justify applying the guarantee provided by Article 29″.
Upon closer examination, however, the impact of this ruling seems to extend beyond the mere issue of joint and several liability because, regardless of the contract’s classification, it leads to the conclusion that the outsourcing arrangement and the resulting detachment between the formal holder of the employment relationship and the actual user of the labor are sufficient to justify not only the application of Article 29 but also of the entire regulatory framework designed to protect employees who are unlawfully used.
If as observed by the Court, the purpose of the analysis is to determine which party bears the “business risk“, it cannot overlook the other criteria outlined in the first paragraph of Article 29 of Legislative Decree 276/2003 to assess the lawfulness of a contract:
The three requirements mentioned are indeed the distinguishing features of a lawfulness contract as opposed to unlawful supply of labour. Although the Italian Court of Cassation, in this decision, focused on the business risk criterion, it is clear that assessing the lawfulness of the contract must also consider the organization of resources and personnel.
This holds true regardless of the legal classification of the contract governing the relationship between the parties, in any case where there is a separation between employer and user. Naturally, this does not apply if the labor supplier is an agency expressly authorized by the Ministry of Labor.
Furthermore, this interpretation should not be surprising if we consider that labor law as a whole generally prioritizes substance over form.
Consequently, any outsourcing arrangement lacking the required criteria risks being non-compliant with the law and may therefore be reclassified as irregular or fraudulent labor supply.
The ruling underscores the importance for companies to exercise caution with regard to these types of arrangements in light of increased judicial scrutiny, including in criminal matters, as evidenced by recent investigations into the fashion and logistics sectors and also by the italian legislator, who, with Decree Law 19/2024, has toughened the penalties for illicit or fraudulent labor supply, increasing the fines applicable in the event of violations and introducing imprisonment of 1 to 3 months depending on the severity of the violation.
In cases where the contract is deemed unlawful, the contracting company may face a range of adverse consequences, including the right of the supplied workers to demand the establishment of an employment relationship with the actual user from the beginning of the supply and to claim any unpaid wage and contribution differences that may have accrued.
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