Employment relationship – Dismissal for just cause – Unlawfulness – Existence
The existence of wilful and negligent misconduct to the detriment of the employer company requires that the damage be a foreseeable consequence of the employee’s conduct. In light of this principle, the dismissal of an employee who, having been authorised to leave the workplace during working hours, stopped on the way to the market for a few minutes in the company car, was held to be unlawful. At that time, he was photographed and the photo was published on the social media site Facebook, gathering the indignation of several subscribers. Italian Court of Cassation, Employment Division, 6 December 2023, no. 34107. The Court of Cassation, Employment Division, with judgment no. 34107 of 6 December 2023 ruled that the dismissal of an employee who, having been authorised to go home in the company car to change his wet clothes, stops on the way to go shopping at the market is unlawful. In the context of the evaluations carried out by the local court and confirmed by the Court of Cassation, the filming and subsequent publication of the company car by an extraneous third party was irrelevant for the purposes of assessing the lawfulness of the dismissal. This triggered the indignation of social media subscribers. In fact, it had emerged in the course of the proceedings that the employee’s conduct, not constituting conduct committed wilfully or negligently to the detriment of the company, was to be classified as unauthorised absence from the workplace for the sole period of the stop at the market. The Court concluded that such a case, also in the light of the provisions of the collective bargaining agreement applicable in that instance, should have been sanctioned with a precautionary measure.
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On 28 December 2023, Italy joined the European Framework Agreement called “Framework Agreement on the application of Article 16 (1) of Regulation (EC) No. 883/2004 in cases of habitual cross-border Telework”.
Article 1 of the Framework Agreement defines “cross-border telework” as an activity that a worker carries out remotely in one or more Member States through the use of information technologies.
The agreement provides that cross-border teleworkers may be subject to the social security system of the Member State of the employer’s registered office, provided that the work carried out under the “teleworking” regime in the State of residence is less than 50% of the total working time.
This regime applies only if the worker’s State of residence and the one in which the employer has its registered office are both signatories to the Framework Agreement. Therefore, if those States have not signed such a Framework Agreement, the provisions of Article 13 et seq. of Regulation (EC) No. 883/2004, which provide for the application of the social security system of the Member State of residence if the worker carries out a substantial part of his or her activity in that State, apply.
Where the conditions set out in the Framework Agreement are met, to derogate from the general provisions established at European level regarding the identification of the applicable legislation, it will be necessary to initiate a special request procedure under Article 18 of Regulation (EC) No. 987/2009. This procedure must be undertaken before the competent authority of the Member State in which the employed worker asks to apply the legislation which, in the case of Italy, is the Italian National Social Security Entity (Istituto nazionale della previdenza sociale ‘INPS’).
Finally, it should be noted that requests submitted up to 30 June 2024 may retroactively cover a period of up to twelve months prior to that of the request.
There is no end to new initiatives on the subject of whistleblowing. While the provisions of Italian Legislative Decree no. 24 of 10 March 2023 are already in force for companies with 250 employees or more, for companies employing 50 to 249 employees this has only been the case since 17 December 2023, requiring them to equip themselves with whistleblowing systems. How does all this impact the work of specialised law firms?
We asked some of the firms that are supporting companies in complying with the law on the protection of persons who report breaches of national or EU regulatory provisions. Six months after its entry into force, De Luca & Partners’ dedicated task force has analysed companies’ actual application of the rule, and it emerges that they are still far from compliant with the provisions. “We notice a general tendency to underestimate the complexity of the activities to be carried out to comply with the provisions of the Whistleblowing Decree”, says Vittorio De Luca, managing partner of De Luca & Partners.
“Companies are lagging behind in carefully assessing which system, including IT systems, should be used to make reports, in full compliance with applicable privacy legislation. Not only that, but companies also need to ensure that the disciplinary code adopted is adequate to avoid frustrating disciplinary measures. And this is in a regulatory framework that establishes two particularly significant risks: a fine of up to EUR 50,000, and above all, failure to comply with the exemptions provided for by Italian Legislative Decree no. 231/01”.
The full version of the interview was published on ItaliaOggi7 of 19 February 2024.
By order no. 87 of 3 January 2024, the Italian Court of Cassation ruled on the applicability of reinstatement where the fact underlying the dismissal ordered for justified objective reasons did not exist.
At the end of the three instances of proceedings, the Italian Court of Cassation upheld the appeal brought by the dismissed employee, quashing the judgment of the Court of Appeal which had only granted the employee compensation amounting to 20 months’ salary.
The case originates from a worker’s dismissal by a cooperative company for a justified objective reason, based on the need for a company reorganisation and the consequent outsourcing of accounting activities (the department to which the worker was assigned).
The first instance Court had upheld the worker’s appeal, declaring the dismissal unlawful.
The Court of Appeal of Catanzaro, in agreement with the first instance Court, rejected the appeal lodged by the employer cooperative, on the ground that the latter had not proved the existence: (i) of the causal link between the reorganisation and the abolition of the job; (ii) the elimination of the department to which the worker had previously been assigned; (iii) the impossibility of the worker’s relocation.
On the basis of these assumptions, the Court of Appeal judges had ordered the employer to pay the worker compensation equal to 20 months’ salary.
The worker then appealed to the Italian Court of Cassation asking for reinstatement under Article 18, paragraph 7, Italian Law no. 300/1970 (so-called Workers’ Charter).
The Court of Cassation, in accepting the appeal filed by the worker, reiterated that the burden of proof regarding the existence of the conditions for dismissal for justified objective reasons is placed on the employer who can also resort to presumptions, with the exception that the burden is on the worker to prove the assignable posts (Italian Court of Cassation 20 October 2017, no. 24882).
With the ruling in question, the Court also addressed the issue of the “manifest” non-existence of the fact justifying, under Article 18, paragraph 7 of the Workers’ Charter, as amended by Italian Law no. 92/2012, the application of the mitigated obligation of reinstatement.
According to the Court, the assessment as to whether the fact is manifestly non-existent must be independent from the character of immediate evidence, “due to the fact that Article 18, paragraph 7, second sentence of Italian Law no. 300/1970, as amended by Article 1, paragraph 42, letter b) of Italian Law no. 92/2012, was declared constitutionally unlawful, for breach of Article 3 of the [Italian] Constitution, limited to the word ‘manifest’”.
The Italian Court of Cassation agreed with the ruling of the Court of Appeal of Catanzaro on the non-existence of the “organisational reorganisation used as the basis of the dismissal” as well as on the absence of proof of the impossibility of fulfilling the repêchage obligation (obligation to relocate). However, the Italian Court of Cassation concluded that, in the present case, the justified objective reason cited at the basis of the dismissal did not exist. The Court of Cassation criticised the compensation order stating that the Court of Appeal had disregarded over-riding legal principles in the light of the latest rulings on the requirement of “manifest” non-existence.
In summary, according to the Italian Court of Cassation, if there is no causal link between the employer’s dismissal and the justified objective reason adduced as its basis, there is a manifest non-existence of the fact that, as such, justifies ordering the employer to reinstate the employee.
In the case of dismissal for objective reasons, the repêchage obligation may be limited by the fact that the dismissed person does not have the professional skills to perform the other job, even if it is of a lower level. However, this must be demonstrated by facts that are objectively established and proven by the employer.
By order no. 31561 of 13 November 2023, the Italian Court of Cassation stated, in line with the principles already established by it on the subject, that in the event of an appeal against dismissal for the abolition of the job position, and where in the period immediately following the dismissal the employer has hired new employees, albeit for the performance of different tasks, the judge is required to assess whether or not the dismissed worker was able to perform the aforementioned tasks, even if of a lower contractual level, for the purpose of possible reassignment to them with a view to preserving employment.
This assessment must be carried out not in the abstract but in practice, taking into account the company’s specific assertions on this point as well as the levels of classification governed by the applicable collective bargaining agreement.
As is well known, repêchage gives rise to the employer’s obligation to assess, before proceeding with a dismissal for justified objective reasons, whether it is possible (within the limits that we will examine below) to employ the worker in other tasks.
This obligation has arisen through case law and seeks to balance the employer’s interest in achieving an efficient organisation with that of the worker in keeping his or her job, to ensure that dismissal constitutes the last resort, also considering the importance attributed to work by our Constitution (Italian Civil Court of Cassation, Employment Division, 3 December 2019, no. 31520; Italian Civil Court of Cassation, Employment Division, 13 June 2012, no. 9656).
According to settled case law, the repêchage obligation does not extend to workers classified as executives, as it is incompatible with the executive position which is characterised by voluntary withdrawal of services (see among others, Italian Civil Court of Cassation, Employment Division, 6 December 2022, no. 36955 ; Italian Civil Court of Cassation, Employment Division, 1 February 2013, no. 3175).
Under the previous text of Article 2103 of the Italian Civil Code (which allowed horizontal ius variandi [right of employer to make changes to the contract] for “tasks equivalent to the last ones actually performed”), the extension of the repêchage obligation was initially limited to equivalent tasks only. Subsequently, in the light of some exceptions to the prohibition on demotion provided for in special cases by regulatory provisions (including Article 42 of Italian Legislative Decree of 9 April 2008, no. 81 in the case of the worker judged to be unfit for the specific task), a new line of case-law had developed. Under this new line of case law, the employer, in the absence of equivalent tasks and before proceeding with the dismissal, was required to propose to the worker, to obtain his or her potential consent, his or her assignment to lower level tasks, provided that they fell within the latter’s skill set, since it is not possible to impose the costs associated with vocational training on the employer (see among others, Italian Civil Court of Cassation, Employment Division, 3 December 2019, no. 31520, cit., in relation to a case to which the previous text of Article 2103 of the Italian Civil Code applied; Italian Civil Court of Cassation, Employment Division, 23 October 2013, no. 24037).
In any event, the case law has always been, as it still is, unequivocal in holding that the repêchage obligation refers only to the already existing organisational structure and does not require the employer to create an ad hoc alternative job position.
The new text of Article 2103 of the Italian Civil Code (as amended by Italian Legislative Decree of 15 June 2015, no. 81) allows horizontal ius variandi in tasks attributable to the same level and legal category as the last ones actually performed (paragraph 1). It also allows the assignment of tasks attributable to the lower classification level, provided that they fall within the same legal category, in the event of a change in the company’s organisational structure that affects the worker’s position (paragraph 2).
It is clear that, as evidenced by the case law, “the increased employer obligation due to the impossibility of applying repêchage in relation to inferior tasks brought about by the entry into force of Article 2103 of the Italian Civil Code, cannot, however, be considered absolute”: the obligation should be limited to “unskilled tasks, i.e. those that do not require appropriate training”, as “the obligation to assign to the worker tasks that require appropriate training would in fact mean imposing an additional financial cost on the employer” (Court of Rome, 24 July 2017).
Therefore, not all the lower-level positions in the company organisation chart are relevant, but only those compatible with the worker’s professional skills or those that have actually already been carried out, at the same time or previously (Italian Court of Cassation no. 31521/2019).
In short, the majority case law has avoided attributing to the third paragraph of Article 2103 of the Italian Civil Code, according to which the change of duties is accompanied, where necessary, by the fulfilment of the training obligation, an extensive interpretation of the repêchage obligation to the point of requiring the employer to provide the necessary training so that the worker can be usefully employed in other tasks to avoid dismissal.
On this point, it is worth mentioning a recent decision of the Court of Lecco which partially departed from this approach: the Court held that although there is no general obligation to professionally train the worker, in the event that his or her professional skills have become obsolete due to a company reorganisation, the employer, in accordance with the principle of fairness and good faith, must also assess whether it is impossible, or at least unprofitable, to provide professional retraining before proceeding with the dismissal (Lecco Court, 31 October 2022).
In the context of this legislative and case law development, the burden of proof remains on the employer. The employer must therefore attach all the documentation and factual evidence necessary to corroborate its position and, therefore, to demonstrate that there were no other job positions or that, in the context of an offer of a different position, it was the worker himself or herself who declined the new tasks from the same or different initial legal category.
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