With its order no. 27934 of 13 October 2021, The Court of Cassation ruled that the employer’s waiver of the resigning employee’s notice period removes any obligation to pay them the relevant payment in lieu of notice. This is because the resigning party has no legal interest in continuing the employment relationship.
In this case, a resigning executive obtained a court order for payment of the allowance in lieu of notice, a decision that was upheld on appeal, based on the company’s waiver of the resignation notice period did not relieve it from the obligation to payment in lieu of notice.
Objecting to the court’s ruling, the losing Company appealed to the Cassation Court.
The Court of Cassation, explained the financial function of the notice which consists in mitigating the prejudicial consequences of the contract termination for the party suffering the termination.
The Court of Cassation stated that the notice has the following functions:
The Court of Cassation analysed the issue of the notice waiver by the party affected by the termination and the legal consequences of such waiver, which vary depending on whether it is given real or mandatory effect.
Referring to previous case law, the Court of Cassation, confirmed the mandatory effect of the notice, from which the withdrawing party is free to choose between continuing the relationship during the notice period and the payment in lieu of notice.
Based on that reconstruction, according to the Court of Cassation, the non-withdrawing party has a freely waivable claim. The non-withdrawing party owes nothing to the other party due to its waiver on this basis. The latter has no legally qualified interest in continuing the employment relationship until the end of the notice period.
On these grounds, the Court of Cassation upheld the Company’s appeal, revoking the payment order issued in favour of the resigning executive.
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It should be noted that the Court of Cassation’s decision is applicable only with reference to the legal rules on notice and not when the collective bargaining agreement (i.e., Commercial NCLA) requires the employer to pay the resigning employee the payment in lieu of notice, even if there is a notice waiver.
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The Court of Cassation, with its ordinance no. 9789 of 26 May 2020, stated that the clause of the individual contract establishing a probationary period agreement longer than that established by the sector collective bargaining must be considered more unfavourable for the worker. Therefore, it must be replaced by law according to art. 2077, second paragraph of the Civil Code, unless extension results in an actual favourable position for the worker, with the burden of proof placed on the employer.
Facts of the case
The court case is based on an appeal filed by a worker to establish the invalidity of a 6 month probationary period added to the employment contract before the worker left for Colombia, since it was longer than that of the reference NCA.
The judge of first instance and the Appeal Court rejected the worker’s petition asserting that the longer probationary period appeared justifiable considering the greater difficulty of hiring the employee in a work context in a different country far from Italy.
Thus, during the trial phase, the exceptional and detrimental clause of the probationary period duration included in the individual employment contract compared to the reference NCA was considered lawful since it was sustained by plausible reasons.
The losing worker thus appealed to the Court of Cassation for reversal of the ruling.
The Supreme Court of Cassation’s decision
The assigned Supreme Court, in reference to the complaint related to the duration of the probationary period, first explained that it already had been able to confirm “with ruling no. 8295 of 2000, that the clause in the individual employment contract which included a probationary period longer than the maximum contained in the collective contract applicable to the employment – without prejudice to the six month limit as per art. 10 of law no. 604 of Law 1966 – this clause may be deemed legitimate only where the particular complexity of the duties agreed for the employee makes it necessary, for the purposes of a valid test, and in the interests of both parties, to have a longer period than that considered reasonable by the collective parties in the generality of cases; the employer bears the relative burden of proof, to whom the longer duration of the probationary period attributes a greater right to dismissal for failure to pass the probation”.
The Supreme Court added to this stating that for the validity and lawfulness of the probationary period, national legislation requires it in writing ad substantiam. This burden is to protect the weaker contractual party – the worker – and to ensure that at the most he can be restricted by a probationary period of a minimum duration or at any rate not longer than the period strictly necessary for verification of his professional technical ability. (Cass. 5 March 1982 no. 1354; Cass. 25 October 1993 no. 10587). Thus the result based on the Cassation judges, “in principle, the invalidity of agreements aimed at extending the duration of probation compared to that determined by social partners”.
The Court concluded that, in the case in hand, the clause attached to the contract containing a probationary period longer than that established by collective bargaining of the sector is unfavourable for the worker and, as such, must be replaced by law according to art. 2077, second paragraph, of the Civil Code. In this case the employer did not demonstrate the reasons supporting the longer probationary period compared to that of the reference NCA.
Based on all of the above, the challenged ruling of the Appeal Court was overturned in relation to the upheld motive, with referral to the Appeal Court of Bologna in a different formation, to re-examine the merits based on the principles stated above.
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