The Court, with ruling 6495 of 9/3/2021, as per art. 30 of Law No. 300/1970, confirmed union body members have the right to paid time off for meetings. Use for other purposes can justify dismissal. According to the Court, the abstract relevance for punishing the worker’s conduct requires real verification of its seriousness and consideration as just cause for termination. The assessment of proportion is assigned to a judge. In this case, the manager’s dismissal for just cause was disproportionate based on analysis of the alleged conduct and preliminary investigation results. The manager was charged with being arbitrarily absent from work, having carried out activities unrelated to the reason for time off. However, the worker had not attended any meeting, but had conducted activity related to his job. Therefore, according to the Court, the judges had rightly overturned the manager’s dismissal considering his disputed conduct to be punishable with a conservative penalty.
The Court of Rome, in its ruling no. 3605 of 19 April, 2021, ruled on the application of the dismissal prohibition, provided for by art. 46 of the “Cure Italy” decree and confirmed by the emergency measures that followed, to executives. Contrary to the conclusions reached on 26 February, the Court ruled that “the literal wording of the regulation, together with the philosophy that supports it, did not allow executives to be included in the prohibition.”
To deal with a crisis, worsened by the consequences of the pandemic, a company, with a notice dated 29 April 2020, dismissed its Chief Operating Officer due to the position removal and redistribution of the functions assigned to him among other company managers.
The executive challenged the termination by objecting to its nullity due to violation of art. 46 of Decree Law 18/2020 (“Cure Italy Decree”) on the assumption that the prohibition of individual dismissal introduced by the emergency legislation should apply to executives and the dismissal illegitimacy.
In rejecting the appeal brought by the executive, the Court of Rome preliminarily noted that art. 46 of the “Cure Italy” Decree – and the subsequent emergency measures that extended the dismissal prohibition – expressly excluded the possibility of ordering dismissals for justified objective reasons under art. 3 of Italian Law no. 604/66)
However, based on the literal content of the regulation and the assumption that art. 3 of Law 604/66 does not apply to executives, based on the express provisions of the legislation (art. 10 L. 604/66) and by constant case-law orientation, the Court ruled out that executives can be included in the dismissal prohibition.
The Court found the “clear and evident symmetry” between the dismissal prohibition and the use of social shock absorbers, which has allowed companies to reduce labour costs in a generalised manner to cope with losses. This symmetry is confirmed by the possibility for employers to revoke dismissals already announced before the prohibition, introduced by art. 46 of the “Cure Italy” Decree in paragraph 1-bis. This applies if a request to access the redundancy fund was made simultaneously.
According to the Court, the combination “dismissal prohibition” and “use of social shock absorbers” cannot be applied to executives, as they cannot benefit from social shock absorbers while in office. An interpretation that would allow the inclusion of executives in the dismissal prohibition would be unconstitutional. It would leave the employer responsible for the costs of the managerial employment relationship even in the presence of a justified termination.
The Court held that it could not come to a different conclusion, not even because of the order from the same Court dated 26 February 2021. Under this order the prohibition would apply to executives because “according to a ‘constitutionally oriented interpretation’ the exclusion of executives from the prohibition is unclear, given the regulation is supposed to prevent general dismissal without any distinction.”
With this ruling, the Court disagreed with the reasoning contained in the 26 February order. Under this order, it would be unreasonable not to include executives in the prohibition because they are protected by the rules of collective dismissal. With this ruling, the Court declared the cases were different. This justifies a difference in approach and it cannot be a valid reason to apply the dismissal prohibition to the individual executive.
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The logical-juridical process that led the Court to exclude the extension of the dismissal prohibition to management personnel can be shared since it follows legal provisions and the entire emergency regulatory system’s reason.
However, the case law on the interpretation of the same regulatory source provided diametrically opposed solutions, resulting in uncertainty for companies about the outcomes and costs of any dismissal of senior figures.
Other related insights:
The Court of Mantua, in its ruling no. 112, filed on 11 November 2020, declared the absolute nullity of dismissal for justified objective reason with consequent applicability of reinstatement in the job that was notified in violation of the express ban introduced by the law decrees enacted to face the pandemic emergency from Covid-19.
A worker, a trainee of a company operating in the clothing and costume jewellery retail sector, was first put on wage guarantees due to the Covid-19 healthcare emergency. Following use of the wage guarantees, she was put on holiday and then dismissed for justified objective reason.
Objecting to the dismissal the worker appealed to the court preliminarily citing the relative invalidity for violation of the emergency legislation and secondly for lack of justified objective reason as well as violation of the repechage obligation finding that she could have been transferred to other job sites.
The assigned Court in granting the worker’s appeal explained that the generalised ban on individual dismissal for justified objective reason represents a temporary protection of the stability of employment to safeguard the market and the economic system and is a job market policy and economic policy measure connected to public order requirements.
This ban on dismissals was originally introduced by art. 46 of the “Cure Italy” Decree (Decree Law no. 18/2020) until the date of 17 May 2020, to then be later extended by later emergency provisions.
The legislative provisions in question, the Court confirmed, have an imperative and public order nature with the consequence that dismissals adopted in contrast with them, are invalid with a consequent application of reinstatement as per art. 18, 1st paragraph, Law 300/1970 and as per art. 2, Italian Legislative Decree 23/2015 (with the “expressly” invalidity from art. 1418 of the Italian Civil Code).
The Court then added that the dismissal regulations for open-ended contracts also apply to the trainee contract given the comparable nature of trainee and ordinary employee. The Court also reiterated that the employer has the burden of proving the just cause or justified reason of the dismissal and, in the case in hand, nothing was demonstrated as the company did not appear.
In light of the above, the Court decided to apply to the dismissed employee the protection of reinstatement in the previously held job, sentencing the company to pay the remuneration used as reference to calculate TFR (post-employment benefits) from the date of dismissal until reinstatement on the job, without prejudice to the worker’s right to request compensation in lieu of reinstatement. Moreover, the company was sentenced to pay welfare and social security contributions for the same period.
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The ruling under review shows that violation of the temporary ban on dismissals entails the absolute nullity of the same, for violation of an imperative law with consequent applicability of the “full” real protection contained in art. 18, paragraph 1, of Law 300/1970 and art. 2 of Legislative Decree no. 23/2015 depending on whether the employees were hired before or after 7 March 2015 (date Legislative Decree 23/2015 became effective).
Altri insights correlati:
The Court of Justice of the European Union (CJEU), with its ruling of 17 March 2021 (case C-652/2019), decided on prejudicial issues raised by the Court of Milan on 5 August 2019 on the legitimacy of the collective dismissal provisions contained in the Jobs Act.
The case regards an employee hired with a fixed term contract before the Jobs Acts became effective, changed to open-ended at the end of March 2015 and then dismissed in 2017 in a collective dismissal procedure.
The employees involved in the procedure in question, including the employee, petitioned the Court of Milan which declared the challenged dismissals as unlawful, due to violation of the selection criteria. The Court granted the worker – unlike her colleagues who had been reinstated because hired with open-ended contract before the enactment of Legislative Decree no. 23/20215 (so-called Jobs Act), i.e. before 7 March 2015 – only the indemnity protection.
The Court, noting the existence of two different disciplinary systems in the event of unlawful collective dismissal resulting from the introduction the seniority-based protection contract, asked the Court of Strasbourg if a similar treatment difference was against European Union Law.
The Court of Justice recognised the conformity of Legislative Decree no. 23/2015 with European Union law, clarifying that a regime that has only one indemnity (and not also reinstatement) is not discriminatory for the worker hired with fixed-term contract before 7 March 2015 and becoming permanent afterwards. This is because the different treatment is justified by the fact that the workers involved in the seniority-based protection obtain, in exchange for a regime with less protection, a form of employment stability.
According to the Court of Strasbourg it is a type of incentive aimed at fostering the conversion of fixed-term contracts into open contracts which constitutes a legitimate objective of social and employment policy, the selection of which is fully within the discretion granted to Member States.
According to the Court of Strasbourg this consideration is in line with a decision made by the Court in 2018, which, involving basically the same issue, had considered it legitimate that the remedial legislation could be differentiated based on the hiring date.
Other related insights:
The Court of Trento, in a ruling dated 21 January 2021, stated that an employee who is absent from work due to a fiduciary isolation ordered due to their (avoidable) choice to spend holidays abroad constituted just cause for dismissal. The Court’s ruling stems from an appeal brought by an employee who had been dismissed because, following repeated absences for various reasons (holidays, leave under the 104 law, child illness, etc.) and recently returned from a holiday period in Albania, had been absent from work for 14 days to observe the quarantine required by law. This absence had caused “serious organisational problems (…), thus causing serious harm to the company.” The employee contested the dismissal, claiming that it was null and void since it was based on unlawful retaliatory reasons and it lacked just cause, since the act was justified by compliance with legal obligations.
Continue reading the full version published in Norme & Tributi Plus Diritto of Il Sole 24 Ore.
