With judgment No. 150 lodged last 16 July, the Constitutional Court has declared article 4 of Legislative Decree No. 23 of 4 March 2015 constitutionally unlawful , with limitation to the words “for an amount equal to a monthly salary of the last pay of reference for calculating the severance pay for each year of employment”.
The constitutionality issue had been raised by the Courts of Bari and of Rome with orders dated 18 April 2019 and 9 August 2019, respectively, within the scope of legal proceedings having as subject matter the unfairness of dismissals notified in breach of the relevant procedural rules, amongst which, article 7 of Law No. 300/1970.
In the opinion of the Judges a quo, any dismissal notified in breach of the formal rules (i) shall entail the breach of mandatory provisions, established beforehand in view of ensuring the “audiatur et altera pars” principle of legal civilisation and (ii) would always take the shape of “a breach of the law which must entail ‘adequate and customised compensation’, even if by way of a lump sum”.
By aligning itself with the principles set forth in the previous judgment No. 194/2018, the Constitutional Court has found that the method for quantifying the compensation applied to those dismissals for defects of formal nature only “enhances the marginality of the formal and procedural defects, also further belittling the role of guaranteeing fundamental values of legal civilisation, aimed at protecting the worker’s personal dignity”. Indeed, such mathematical criteria does not prove to be “adequate compared to the purpose of dissuading employers from bringing about dismissals affected by formal defects”.
Furthermore, seniority of employment “neglects the assessment of the specificity of the actual case” and is unfit to disclose “the wide range of variables directly affecting the employee personally”.Therefore, it has no reasonable relation with the disvalue of the dismissal affected by formal and procedural defects, which the legislator has intended to punish and which may not be exhausted in the mere arithmetic calculation of the seniority of employment. Therefore, according to the Constitutional Court, in compliance with the minimum and maximum limit set forth by the legislator, in calculating the relevant compensation, the Judge seized must, above all, take the seniority of employment into consideration, that is “the starting point of the assessment”. In any case, in no way can the Judge set aside the application “with a properly grounded assessment” of other criteria, which contribute “in a corrective vein” to make the calculation of the compensation concerned close to the peculiarities of the specific case. Amongst these, it is worth mentioning the seriousness of the breaches, pursuant to article 18, sixth paragraph, of Law No. 300/1970, the number of people employed, the size of the company, the behaviour and the conditions of the parties, cross-referenced by article 8 of Law No. 604 of 1966.
Others insights related:
Last 25 June the Constitutional Court press office issued a release stating that the Court had examined, on 24 June, the issues on the constitutionality raised by the Courts of Rome and Bari regarding the criteria for determining the indemnity to pay in the presence of a dismissal vitiated only from a formal and procedural standpoint as per art. 4 of Legislative Decree no. 23/2015. Specifically, the Office made it known that the phrase “an amount equal to one month salary of the last remuneration used to calculate post-employment benefits for each year on the job” was declared unconstitutional. According to the Constitutional Court, this is because it establishes a rigid and automatic criterion, linked to the sole element of seniority. Thus the Court returns to flunk the Jobs Act. It had already ruled on the point in 2018 when it had declared art. 3, paragraph 1 of Legislative Decree 23/2015 was unlawful only for the criterion for determining the indemnity, to pay in the case of dismissal without just cause and justified reason, automatically and solely tied to seniority. The motivations for the ruling are scheduled to be filed in the coming weeks.
Other related insights:
Article 46 of the Cura Italia Decree, containing urgent measures to contrast the COVID 19 emergency states that “beginning from the date the degree goes into effect starting any proceedings as per articles 4, 5 and 24 of Italian Law no. 223 of 23 July 1991 is prohibited for 60 days and pending proceedings started after 23 February 2020 in the same period shall be suspended. Until this period ends, the employer, regardless of the number of employees, may not withdraw from an employment contract for objective just cause pursuant to article 3 of Italian Law no. 604 of 15 July 1966”. Therefore, from 17 March 2020 until 16 May 2020 there is a ban on starting employee layoff proceedings and pending proceedings started after 23 February 2020 are suspended during the same time period. Moreover, until 16 May 2020, employers, regardless of the number of employees on the job, may not give notices of dismissal for objective just cause. Instead, employers can proceed with dismissal for just cause, dismissal for subjective just cause, withdrawal from a trainee contract at the end of the training period, withdrawal during probation period, dismissal for retirement based on the “Quota 100” law and old age pension, dismissal for exceeding the protection period and being unsuitable for the assigned job and dismissal of managers.
With order 1888 dated 28 January 2020, the Court of Cassation has ruled on a case of dismissal for unlawful justified objective grounds with the consequent reinstatement in the job based on article 18 of Law No. 300/1970 (in the text prior to the amendment brought about with Law No. 92/2012). By expressing a general principle, first of all, the Court has stressed that «the actual protection of the job can in no way go so far as to exclude the possible impact of subsequent vicissitudes entailing the termination of the binding obligation». In the case at issue, with judgment 705/2017 and by reversing the ruling of first instance, the Court of Appeal of Catania declared the unlawful nature of the dismissal served by the employer on 18 July 2005 and ordered the reinstatement of the appellant in the job, regardless of the fact that the total discontinuance of the business had supervened pending the proceedings. The employer brought an appeal before the Court of Cassation against the appeal judgment complaining, amongst other reasons, the breach and the false application of article 18 of Law No. 300/1970 and of section 1463 of the Civil Code. In particular, according to the employer, in the appeal proceedings, the Court allegedly failed to examine crucial facts for the purposes of the reinstatement judgment, amongst which, the discontinuance of the business occurring after the dismissal and the filing of a proof of claim in the composition with creditors with the relevant assignment of assets to the creditors validated at a later stage. Based on a principle already set forth, the Court of Cassation has deemed that «the reinstatement is an effect of the ruling handed down pursuant to article 18 of Law No. 300/70 unrelated to the exercise of the employer’s potestative rights who, thus, may at all times infer the total or partial inapplicability to the case under dispute» (Court of Cassation 28703/2011). Should the supervened total discontinuance of the business be ascertained in the specific case, it would de facto amount to a cause of actual supervened impossibility not ascribable to the employer such as for the binding obligation to no longer exist, together with the corresponding applicability of the real protection. In light of the principles cross-referenced above, the Court of Cassation has upheld the employer’s appeal by holding that, without prejudice to the unlawfulness of the dismissal, the Court of Appeal could not have in any case ordered the employee’s reinstatement since it had failed to take into consideration, in light of the evidential findings, the actual supervened discontinuance of the business.
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The Court of Cassation, under ruling no. 26029 dated 15 October 2019, clarified that, in the context of a collective procedure for reducing staff numbers,
Facts of the case
An employee hired pursuant to the mandatory placement legislation had judicially appealed the dismissal sent to him in the context of a collective procedure. The worker had based his appeal on the assumption that, with his dismissal, the employer had breached the so-called special reserve required by law. The worker’s appeal was upheld at first and second instance, ordering the company to reinstate him in his post and to pay him compensation equal to 12 months’ salary of the last total de facto remuneration. The unsuccessful company appealed to the Court of Cassation against the ruling.
The decision of the Court of Cassation
The Court of Cassation, in rejecting the appeal of the employer company, preliminarily observed that, in this case, Article 10, paragraph 4, of Law 68/199 applies. According to said rule, dismissal on the ground of reduction in staff numbers or on justified objective grounds in respect of a mandatorily employed worker may be annulled if the number of remaining mandatorily employed workers is less than the special reserve.
The rationale of the rule is to avoid that, in the event of individual or collective dismissals for financial reasons, the worker can exceed the limits imposed on the percentage presence in his company of staff belonging to protected categories, originally hired in accordance with a legal obligation.
In this context, the Court of Cassation pointed out that the findings of the courts of first instance could not be re-examined in the context of legality, but considered them sufficient to support the decision. The courts of first instance had, in fact, agreed on the undisputed existence, in the company, of the requirements for recruitment pursuant to the legislation on compulsory placement and that, with the dismissal of the worker, the special reserve had been breached.
That said, in the opinion of the Court of Cassation, the protection applicable to the worker is attributable to theoretical case of annulment of the dismissal due to breach of the selection criteria, which exists “when the selection criteria are, for example, illegitimate, given that they are in breach of the law, or unlawfully applied, as they are implemented in contravention of legal or collective provisions” (Cassation no. 12095/2016). Therefore, in the case in question, paragraph 3 of Article 5 of Law 223/1991 applies, according to which “if the dismissal is ordered without observing the written form, the sanctioning regime referred to in Article 18, first paragraph, of Law 300 of 20 May 1970 and subsequent amendments, applies. In the event of a breach of the procedures referred to in Article 4, paragraph 12, the rules referred to in the third sentence of the seventh paragraph of aforementioned Article 18 shall apply. In the event of a breach of the selection criteria provided for by paragraph 1, the scheme referred to in the fourth paragraph of Article 18 shall apply.
In fact, the decision of the employer cannot be considered legitimate if, in breach of a legal provision, it includes, amongst its dismissals, a mandatorily employed worker, thus exceeding the limit of the special reserve. This is because, whilst, on the one hand, the legitimate interest of the entrepreneur in reducing the workforce in order to cope with a financial crisis must be taken into account, on the other hand, the interest of the mandatorily employed worker in keeping his job must also be taken into account.
According to the Court of Cassation, this conclusion appears to be in line with a rationale of the regulation aimed at ensuring compliance with special reserves and the obligations of employing disabled persons, which, only a protection of a restorative nature of the employment position of the dismissed person can guarantee.
