The Court of Cassation, under ruling no. 22367/2019, reiterated a well-established view that, although the choice of the type of applicable national collective bargaining agreement is a matter for the employer, the latter must express and prove its decision unequivocally.

Facts of the case

The case in question concerns the dismissal of a worker at the end of a continuous period of illness lasting 237 days, justified as having exceeded his sick leave.
Both the Court of First Instance and the Court of Appeal with territorial jurisdiction had agreed that the service industry (collective agreement in force at the time of employment), which provided for sick leave of 180 days, could not be applied to the employment contract in question. The Confail Confimea collective agreement, which provided for sick leave 365 days, was considered applicable. According to the courts of first instance, the company had not proven its membership to Confcommercio nor could the references reported in the letter of employment and payslips be considered sufficient to prove said membership, given that the company had not produced the National Collective Bargaining Agreement of the service industry. The courts of first instance – given that the collective agreement of reference, for the purposes of identifying that the sick leave is that in force at the time of dismissal – also considered the National Collective Bargaining Agreement invoked by the worker to be applicable to this case. The dismissal was declared unlawful and the company was ordered to reinstate the worker and pay compensation under Article 18 of Law No 300/70.

The company appealed to the Court of Cassation against the decision of the Court of Appeal, relying on two pleas.

The decision of the Court of Cassation

The company pleaded:

• with the first plea, that the courts of first instance had not considered the well-established principle that the employee must prove the existence and enforceability of the collective agreement claimed and
• with the second pleas, that said courts had not considered the worker’s explicit admission as to the applicability to the employment contract of the National Collective Bargaining Agreement for the service industry.

The Court of Cassation declared both pleas unfounded.

Firstly, the Court of Cassation pointed out the principle according to which collective bargaining agreements that have not been declared effective “erga omnes” pursuant to Law no. 741 dated 14 July 1959, apply only to individual contracts between persons registered with the stipulating associations or between persons who have expressly adhered to the collective agreements and have implicitly accepted them through conclusive conduct, reflected in the constant and prolonged application of the relative clauses to individual contracts (please see Cass. 10632/2009).

Furthermore, with reference to this principle, the Court of Cassation observed that, if one of the parties refers to a clause of a given National Collective Bargaining Agreement that is not effective “erga omnes“, basing itself on the importance that both have always been inspired by it to govern their contract, the court of first instance is responsible for specifically assessing the conduct of the employer and worker (please see Cass. 10213/2000).

In addition, the Court of Cassation confirmed that the employer, in the event of an appeal against a dismissal, must prove, pursuant to Article 5 of Law 604/1966, the facts constituting the legitimate exercise of the power of dismissal which, in this case, also includes the exceeding of sick leave under the terms of the collective bargaining agreement of the applicable sector.

In view of all the above, the Court of Cassation, in confirming the decision on the merits, pointed out that the company had not proven its membership of Confcommercio, nor had it been a consortium member and/or a member of Federdistribuzione – circumstances that could have proven the applicability of the National Collective Bargaining Agreement of the service industry.

Also  according to the Court of Cassation, the courts of first instance also correctly considered it unsuitable to prove the applicability to the present case of the National Collective Bargaining Agreement of the service industry, its reference in the employment contract or in the payslips bearing the references of institutions specific to that contract. Thus, the employer had never produced any specific bargaining agreement. Therefore, the National Collective Labour Agreement in force at the time of dismissal, i.e. the Confail/Confimea agreement, produced by the worker and more consistent with the company’s corporate purpose, must be considered applicable to the employment contract in the case in question, as can be inferred from the certificate f incorporation in the deed. The Court thus dismissed the company’s appeal.

The Court of Appeal, by ruling no. 25355 dated 9 October 2019, stated that employers that claim earnings from other work or sources to be deducted from the compensation due to employees are required to enclose specific factual circumstances and to provide timely specifications, proving general requests for evidence or requests for evidence for purely investigative purposes to be inadmissible. The background that the Supreme Court examined was, essentially, as follows. A claims adjuster was dismissed by the insurance company he worked at as a result of disciplinary proceedings against him for having committed grossly negligent conduct. The employee had specifically been challenged for not having carried out, in 18 instances, all the preparatory and preliminary activities necessary to ascertain the actual occurrence, as well the dynamics of the events relating to claims and the consequent reported injuries. The Court of Cosenza had rejected the opposition pursuant to Article 1, paragraph 51, of Law 92/2012, proposed by the employee and by the insurance company against the order issued in the summary phase. In partial acceptance of the appeal against the dismissal, the employment contract was thereby declared terminated and the insurance company was ordered to pay compensation equal to 20 monthly salaries of the final overall de facto remuneration. The insurance company filed a complaint on appeal and the employee entered an appearance by proposing a cross-appeal. The District Court considered the 18 disputed incidences, noting, however, that “the considerable workload allocated to the employee led (in any case) to the irrecoverability (editor’s note: had in any case led to the irrecoverability) of the knowledge of the anomalies which, indeed, had been (allegedly) identified, by the employer, only following a costly and worthwhile investigation”. The jurisdiction of the local Court of Appeal accepted the employee’s cross-appeal and nullified the imposed dismissal, ordering: – on the one hand, the insurance company to reinstate the employee, sentencing it to pay, from the date of dismissal to the date of reinstatement, the social security and welfare contributions, plus interest – and, on the other hand, the employee to return the sum equal to 8 monthly salaries of the overall de facto remuneration, plus ancillary costs, fully paid up. Furthermore, the Court of Appeal rejected the objection to payment of earnings from other work or sources raised by the employer, claiming that “specific elements, capable of accounting for less damage to be compensated” were not offered. The insurance company filed an appeal against this ruling on four grounds and the employee challenged it with a counter-appeal. As far as we are concerned we only report the fourth ground of appeal with which the insurance company claimed the “omitted and/or insufficient grounds regarding a controversial fact is decisive for the judgement; the criticism refers to the rejection of the exception of earnings from other work and sources; the appellant party accuses the Court of Appeal of not having carried out the necessary investigations in this regard, as, however, it was obliged to do”. The Supreme Court, upon rejecting the aforementioned ground of appeal, stressed, inter alia, that the Court of Appeal had correctly applied the principle of law, according to which “employers that claim earnings from other work or sources to be deducted from the compensation due to employees are required to enclose specific factual circumstances and, in order to fulfil their related burden of proof obligation, they are also required to provide timely specifications, proving general requests for evidence or requests for evidence for purely investigative purposes to be inadmissible (ex plurimis, Court of Appeal No. 4999 of 2017)”.

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The Court of Cassation with ruling No. 15523/2018 had the opportunity to clarify, once again, a few important cases concerning a dismissal ordered upon conclusion of disciplinary proceedings pursuant to art. 7 of the Law No. 300/1970. The judges of the Court of Cassation, in fact, returned to explore the heavy and controversial matter of linking the disputed fact with the letter starting the disciplinary proceeding to a different disciplinary assumption. On the matter, the Court reminded how said possibility is not excluded since it would exclusively be related to a different take on the same fact subject matter of the dispute, relating to which the employee had the opportunity to exercise his right of defence. On the contrary, it was also restated how the employer does not have the possibility to bring forth new and/or additional factual circumstances respect to those subject matter of the dispute, since this conduct would irremediably damage the right of the defence of the worker who would not have, in this manner, the possibility to present his own reasons related to said circumstances. In this manner, the Court of Cassation confirms its opinion according to which it is necessary full matching between the disputed facts and the ones at the root of the dismissal tied to the disciplinary proceedings.

The Court of Cassation, with ruling No. 19731 dated 25 July 2018 has recently expressed its opinion on the repêchage obligation. In the case in question, an employee had filed a law suite against the dismissal ordered by the company due to closing down of the department where he worked, stating that the dismissal was unlawful for breach of the repêchage obligation. This since in his opinion (i) the employer company after the dismissal had continued hiring on a regular basis and with repeated staff leasing contracts and (ii) the staff leasing contracts reported reasons that did not match the true tasks then carried out by the leased staff, tasks that the employee had made himself available to carry out. In fact, confirming what the Judges having jurisdiction had ruled, the Court  of Cassation rejected the appeal of the employee and pointed out that the employer, subjected to a long lasting period of difficulties in getting results and financial difficulties, had the right to reduce its staff. And according to the Court of Cassation, it can do so by redistributing to the residual personnel the tasks previously assigned to the dismissed employee or making use, for strictly limited time periods, to external resources hired with fixed term contracts or staff leasing contracts. In addition, according to the Court of Cassation, the use of overtime work by the employer after the employee’s dismissal, also pointed out by the employee in support of his own claim, is explained according to said principle. This since the greater amount spent for the overtime remunerations of employees asked to work overtime are without a doubt lower than the costs associated to maintain a person hired under an open term contract.

The Court of Cassation, with ruling No. 16571/2018 has once again returned  – confirming an already consolidated trend in legal literature and case law concerning lawfulness – on the topic of reclassification of the apprenticeship relationship in an employment relation under an open term contract, if the employer’s obligations to provide training was breached. In particular, the Court has pointed out that in the matter filed for review, the necessary professional training was lacking, that is the professional training provided to the employee in-training required to allow him to become qualified. On the matter, the Court states once again that in an apprenticeship contract the fundamental matter is specifically represented by the obligation of the employer to provide effective professional training with the goal of providing to the trainee a professional qualification. And since this breach, being of no little importance, leads in the opinion of the Court of Cassation to the transformation right from its inception of the apprenticeship contract into an open term contract, with consequent payment to the employee of all the contributions and salary differences. This means that the priority role that the training undertakes respect to the work activity excludes that this specific contractual form be deemed suitable a relationship having as its objective the performance of elementary or routine tasks, not integrated by an effective training both theoretical and in practice, under penalty of reclassifying the relationship into an open term contract since the very beginning.