In its order no.88 of 3 January 2023, the Supreme Court of Cassation explained the delicate
separation between just cause and justifiability in manager dismissals. The Supreme Court held that for the justifiability of the manager’s dismissal to exist, it is sufficient to prove two of the six disciplinary charges originally contested against the manager. The absence of just cause for dismissal, and the existence of justifiability, entails the manager’s right to receive the indemnity in lieu of notice but not the additional indemnity.
Justifiability and just cause: comparing notions
The employer’s termination of a manager employment relationship differs from other employment relationships, as it falls within the scope of free recidivism. The reason for this is found in the peculiarity of the manager’s role which is close to the employer position and, therefore, the entrepreneur of which the managers are a de facto alter ego. This creates a strong and unique trust bond between employer and manager. The legislator decided not to limit the entrepreneurial choice to terminate the
managerial employment relationship. Collective regulation was added to this regulatory framework
and outlined the notion of “justifiability” for manager dismissals. Case law emphasised that justifiability derives from negotiation and must be interpreted according to the general rules of contractual hermeneutics, including the general principles of good faith and fairness, under Art. 1175 1375 of the Italian Civil Code. Justifiability is distinguished from dismissal reasons under the law, since this is integrated whenever the termination is not arbitrary or vexatious and lacking in appreciable justification (ex multis Court of Cassation ruling no. 23894 of 2/10/2018). In this decision, the distinction between justifiability and just cause for dismissal is relevant. Only the latter legitimises the
summary dismissal, without the employer having to give notice. Art. 2119 of the Italian Civil Code
which governs just cause for termination, provides for the right to terminate the contract before the
expiry, if the contract is fixed term, or without notice if open-ended, “if there is a reason that does not permit the continuation of the relationship, even temporarily”.
Case law on manager dismissals specified that “just cause, which exempts the employer from the obligation to give notice or pay an indemnity in lieu, does not coincide with justifiability. This exempts the employer from the obligation to pay the additional indemnity under collective bargaining, since just cause consists of a fact which, when assessed practically, injures the fiduciary relationship that prevents its continuation, even temporarily” (Cassation Court ruling no. 6110 of 17/3/2014. On this issue see:
Court of Cassation ruling no. 34736 of 30/12/2019; Court of Cassation ruling no. 5671 of 10 April 2012). According to established case law, justifiability is independent and unrelated to the concepts of just cause or justified reason for dismissal; consequently, facts or conduct not constituting just cause or justified reason for dismissal in employment relations may justify the manager’s dismissal, since greater powers presuppose a greater trust and a wider scope of events capable of damaging it (Court of Cassation ruling no. 6950/2019). For dismissal justifiability purposes, any reason may be relevant, provided that it is legally appreciable, capable of upsetting the bond of trust with the employer and capable of excluding dismissal arbitrariness, considering the range of powers granted to the manager – (Court of Cassation ruling no. 27971/2018). Based on the special position held by the manager, the bond of trust could be damaged by inadequacy compared to the company’s expectations, or a significant deviation from the employer’s general directives, or non-work-related conduct affecting the company’s reputation due to the position held by the manager (Court of Cassation ruling no. 2205/2016).
Continue reading the full version published in Modulo 24 Contenzioso Lavoro (Form24 Labour Litigation) of Il Sole 24 Ore.
In its recent order of 16 December 2022, the Court of Foggia, as part of the first phase of the so-called Fornero Procedure, held that an employee who had worked for third parties during his sickness was lawfully dismissed for just cause.
The facts of the case
In the case dealt with by the order in question, the worker was absent from work due to sickness on 9 and 10 November, and then sent in a second certificate of continuation of sickness covering 11, 12 and 13 November.
During the sickness period, the company conducted some investigations from which it emerged that the employee, on 10, 11 and 13 November, had worked in a pub run by his wife.
The company instituted disciplinary proceedings, accusing the employee of faking being sick, the fact that the sickness did not lead to incapacity for work, and, if he was in fact sick, the repeated breach of the employee’s duty not to jeopardise the time required to return to work.
In setting out his reasons, the employee stated that the sickness had been properly certified by his doctor and that, out of a mere spirit of family cooperation and on an exceptional basis, the employee agreed to help his wife, specifying that this activity was carried out outside working hours and without receiving any remuneration.
The company, holding that it could not accept the justifications provided by the employee, dismissed the employee for just cause.
The Court of Foggia’s order
Through a thorough analysis of the documents produced in court by the employer – including the investigative report that described in detail the activities carried out by the worker during the sick leave – the Court ascertained that the employee’s conduct had breached the contractual obligations of fairness and good faith in fulfilling the contractual obligation.
Moreover, from an analysis of the investigative report’s facts, it emerged that the worker had used – in the evening, in November and, therefore, with cold temperatures – an electric scooter to reach the pub, then served at the tables, took orders, and stayed in the pub until 11.00 p.m.
This was conduct that – in the Court’s assessment – demonstrated the worker’s lack of attention to his own health and related duties of care and of not delaying recovery, with the consequent compromise of the employer’s rightful interest in the effective performance of the service due.
The Court, therefore, ascertaining the breach by the employee of his duty to observe all the precautions to not prejudice the recovery of his working energies temporarily undermined by the sickness, rejected the appeal brought by the employee, confirming the complete lawfulness of the worker’s dismissal for just cause.
Other related insights:
By order No 770, of 12 January 2023, the Italian Court of Cassation ruled on the lawfulness of dismissal for just cause of a worker who, as part of her work performance, had not complied with the performance procedures set out in a specific company policy.
According to the Supreme Court, with regard to dismissal for just cause, the employee’s refusal to perform the services in the manner indicated by the employer is sufficient to justify dismissal for just cause, unless such refusal is based on good faith.
The facts of the case
In the case dealt with in the order in question, the worker – a supermarket cashier – had been fired for just cause for allowing three customers to pass through the tills leaving the products in the trolleys and for failing to ask them to put the goods on the conveyor belt as required by company regulations.
It was also claimed that the worker had failed to perform a direct check of the products in the trolley, limiting herself to recording on the cash register the quantities of each type of product indicated by the customers themselves.
The price paid by the three customers turned out to be, following the subsequent intervention of the police called by the security officer, significantly lower than the quantity of goods that were present in their trolleys.
The first instance judge considered the worker’s dismissal to be lawful, as she was guilty of negligent conduct.
The Rome Court of Appeal overturned the judgment issued in first instance, and, following the appeal brought by the Company, the matter was brought to the Italian Court of Cassation.
The Italian Court of Cassation’s Order
The judges of the Italian Court of Cassation, in confirming the lawfulness of the worker’s dismissal, analysed in detail the rules referred to in Article 1460 of the Italian Civil Code relating to the exception of non-performance, in this case, within the framework of an employment contract.
The Court noted that on the subject of one of the parties’ non-performance of an employment contract, previous rulings had considered that the employer’s non-performance does not automatically legitimise the employee’s refusal to perform.
As this is a contract for consideration, the provisions of Article 1460, paragraph 2, of the Italian Civil Code apply, according to which the performing party may refuse to perform the service at its own expense only if such a refusal, having regard to the concrete circumstances, is not contrary to good faith (Italian Court of Cassation, No 434 of 2019; Italian Court of Cassation, No 14138 of 2018; Italian Court of Cassation, No 11408 of 2018).
The court must therefore carry out a comparative evaluation of the opposing performances having regard also to their proportionality with respect to the financial-social function of the contract and their respective impact on the balance between the parties and their interests. This gives rise to the consequence that where the non-performance of one party is not serious or of little importance in relation to the interest of the other party, the latter’s refusal to perform its obligation cannot be considered to be in good faith and, therefore, is not justified under Article 1460, paragraph 2 of the Italian Civil Code (Italian Court of Cassation, No 11430 of 2006).
On the subject of dismissal for just cause, the worker’s refusal to perform the service in the manner indicated by the employer is capable, where not based on good faith, of causing the loss of confidence in the future performance. This in turn therefore justifies termination, since non-compliance with the employer’s measures, albeit unlawful, must be assessed, from a sanctioning standpoint, in light of the provisions of Article 1460, paragraph 2 of the Italian Civil Code, according to which the performing party may refuse to perform the service at its own expense only if such refusal is not contrary to good faith, having regard to the actual circumstances (see Italian Court of Cassation, No 12777 of 2019).
In the present case, according to the Italian Court of Cassation, the Rome Court of Appeal scrupulously adhered to the principles mentioned above in holding that:
In light of the above principles, the Court confirmed the unlawfulness of the worker’s dismissal with the application of the ‘mitigated’ reinstatement protection provided for by Article 18, paragraph 4, of Italian Law No 300/1970 (applicable to the present case).
Other related insights:
As only geolocation data referring to kilometres travelled were considered, the interference in the applicant’s privacy was limited and proportional to the intended purpose.
Dismissal by an employer based on the data from the geolocator of an employee’s company car is lawful and the collection and processing of the relevant data does not result in the infringement of the employee’s rights as enshrined in the Human Rights Convention. This was established, in an important precedent on this much debated issue, in the ruling of the European Court of Human Rights No 26968/1616 issued at the conclusion of Gramaxo v. Portugal. This is the first time the European Court has ruled on a case of surveillance at work through a geolocation system and laid down the criteria for the correct balance between the worker’s right to respect for his or her private life and the employer’s rights in terms of monitoring the proper use of capital assets.
The case on which the Court was asked to rule related to the dismissal of a medical representative of a Portuguese pharmaceutical company who, because of travel associated with his work, had been assigned a company car for mixed work and private use.
At a later date the company had installed a global positioning satellite system (GPS) on all company vehicles.
Following a comparison of the data collected through the installed systems, it was found that the employee in question had falsified the monitoring records making it look like the vehicle had been used more for work than it actually had and lowering its private use to reduce the cost to himself.
The full version can be accessed at Norme e Tributi Plus Law of Il Sole 24 Ore.
The Italian Court of Cassation, in judgment No 31150 of 21 October 2022, in line with its own precedents, clarified that the prior display of the disciplinary code is not necessary for the validity of the disciplinary dismissal of an employee for performing personal activities during working hours, leaving his workstation without permission and using company equipment for which he had not been trained in advance. This is because the conduct alleged breaches legal provisions and, in any event, the worker’s fundamental duties, recognisable as such without the need for specific provision.
Before examining the judgment under review in detail, it is useful to briefly analyse the regulatory provisions applicable to the case as well as the relevant jurisprudential landscape.
Display of the disciplinary code: regulations and case law
As is well known, Article 7 of the Workers’ Statute (Italian Law 300/1970) is the key provision setting out substantive and procedural guarantees to protect the worker in the context of the employer’s exercise of disciplinary power.
The provision places the onus on the employer to prepare a disciplinary code containing the different types of offences, the relevant penalties, and the procedures for challenging them, taking into account national collective bargaining agreements and contracts, if any exist and are applied.
As expressly stipulated in the above statutory provision, the disciplinary code must be displayed in a place accessible to all employees. If the business is divided into several production units, the code must be displayed at each location, facility and autonomous department. Similarly, the code must be displayed if the business operates at third parties’ premises, using them to accommodate materials or persons.
On this point, case law has made it clear that any place in the company where access is available freely and conveniently and for which no special permits or authorisations are required (e.g., personnel management premises or with access limited by badges, etc.) is suitable (Italian Court of Cassation, 3 October 2007, No 20733).
With reference to other equivalent means of disseminating disciplinary regulations, majority case law has held that this is not admissible nor valid, specifying that the employer’s duty to publicise cannot be fulfilled by means other than displaying the code through, for example, distributing the collective agreement and/or company regulations containing the disciplinary code to all employees (Italian Court of Cassation, 28 February 2005, No 5005).
The reasons underlying the above principle were set out clearly by the Joint Divisions of the Italian Court of Cassation in judgment No 1208/1988, according to which: ‘If it is true that the company disciplinary code is a unilateral document with a regulatory function,…and if the addressee of the code is the same indeterminate – also because it is constantly changing – group of workers, it follows that in so far as it has been made known or knowable to the group for which it is intended, it will be effective; without this ability to know about the disciplinary code it is ineffective as legally non-existent. It follows that the legislature’s option choosing displaying, as opposed to other possible dissemination methods of an individual nature (such as, for example, delivering the entire contractual text or an excerpt containing only the provisions on disciplinary matters to employees), is not arbitrary, nor merely advisory, but prescriptive and exclusive, since it finds its rationale in the nature and function to which the document refers.’
The prior and continuous display of the disciplinary code in a place accessible to all workers is, subject to what follows, a necessary condition for lawfully initiating disciplinary proceedings. Hence, it follows that displaying the code after the act complained of renders the sanction unlawful, regardless of whether the employee nevertheless had knowledge of the prohibited conduct (Italian Court of Cassation, 3 May 1997, No 3845; Italian Court of Cassation, 18 May 1989, No 2366; Court of Torre Annunziata, 27 July 2004).
The necessary guaranteed publicity for the disciplinary code by displaying it in a place accessible to all employees does not apply where the dismissal refers to situations which are in breach of fundamental duties related to the employment relationship (Italian Court of Cassation, 1 September 2015, No 17366; Italian Court of Cassation, 26 March 2014, No 7105; Italian Court of Cassation, 7 February 2011, No 2970), or to conduct contrary to the so-called ‘ethical minimum’, since in that case the conduct complained of is immediately apparent to the employee as unlawful (Italian Court of Cassation, 9 July 2021, No 19588).
After all, the Italian Court of Cassation, following a prevailing line of jurisprudence, has held since the mid-1990s that ‘the principle of the peremptory nature of the employee’s offences cannot be understood in the strict sense imposed in criminal law by Article 25, paragraph 2 of the Italian Constitution, a distinction having to be made between unlawful conduct pertaining to company organisation and modes of production, which refer to rules that are for the most part unknown to the general public and are, therefore, knowable only if expressly provided for, and those that are manifestly contrary to generally accepted values, and therefore also unlawful under criminal law, or manifestly contrary to the company’s interests, for which specific inclusion in the disciplinary code is not necessary, since they are in themselves capable of manifesting the “culpa lata”, corresponding to “non intelligere quod omnes intellegunt”’ (Italian Court of Cassation, 26 February 1994, No 1974).
The full version can be accessed at Modulo24 Contenzioso Lavoro of Il Sole 24 Ore.
