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.
In the event of repeated absences – which have not exceeded the limit of the protected period – the onus is on the employer to prove the additional reasons justifying the dismissal.
Dismissal based on an employee’s repeated absences from the workplace on days close to rest days and/or public holidays constitutes an unfair and arbitrary reaction by the employer to the legitimate exercise of the employee’s right to be absent due to illness and, therefore, must be considered discriminatory and retaliatory if the protected period established by the collective agreement has not been exceeded.
This was the conclusion reached by the Court of Naples in its judgment of 14 September 2022 on the basis that the employer may not terminate the relationship before the tolerable absence limit (the so-called ‘protected period’) has been exceeded.
The case before the Court related to the dismissal for just cause of an employee who was repeatedly absent for short periods usually close to rest days, public holidays or holidays. In the company’s opinion, the absences had made his work performance objectively unusable and discontinuous and caused serious and onerous disruption to business organisation.
The Court held that the dismissal was unlawful, referring, first of all, to the legal provision governing the sickness, i.e., Article 2110 of the Italian Civil Code. That legislative provision, in essence, establishes a balance between the employee’s interest in keeping his/her job for a determined period of time and the employer’s interest in not having to bear for an indefinite period of time ‘the repercussions that such absences have on business organisation’. In fact, exceeding the protected period, usually defined by collective agreement, would have the effect of jeopardising the employer’s right to receive consistent and regular services from the worker and, therefore, to satisfy fully the organisational purposes of the business.
The full version can be accessed at Norme e Tributi Plus Lavoro of Il Sole 24 Ore.
The Court of Rome differs from the Capitoline Court of Appeal guidelines over the exclusion of the dismissal prohibition for managers during the Covid emergency.
Measures to combat Covid 19 – Decree Law no. 18/2020 and Decree Law no. 104/2020 – Dismissal prohibition for objective justified reason – Manager – Dismissal for position redundancy – Prohibition breach – Not applicable
The emergency legislation on prohibiting dismissal for objective justified reasons is exceptional and cannot be applied to similar cases not expressly mentioned by the regulation. This means that the dismissal prohibition cannot be applied to an individual manager’s dismissal.
Court of Rome 25 October 2022, no. 8722
A few months after the Rome Court of Appeal ruled in favour of the applicability of the dismissal prohibition to managers, the Capitoline Court, in its recent ruling no. 8722 published on 25 October 2022, came to an opposite conclusion.
FACTS OF THE CASE
In August 2020 – the period covered by the general dismissal prohibition for objective justified reasons under Decree Law 14/8/2020, no. 104 – an employer company dismissed a manager for objective financial reasons.
Considering that managers were included in the group of workers protected by the dismissal prohibition under the emergency regulations, and as part of the first phase of the Fornero Procedure, the Judge declared the dismissal null and void, ordered the manager immediate reinstatement, and the company to pay the remuneration due from the dismissal date until reinstatement.
The company appealed against this decision before the Court of First Instance.
LEGISLATION AND CASE-LAW
Art. 46 Decree Law 17 March 2020, no. 18 prohibited collective dismissal procedures and employers from “terminating the contract for objective justified reasons under Art. 3 of Law no. 604 of 15 July 1966” regardless of the number of employees.
The dismissal prohibition applicable to this case was extended and subjected to further conditions and exceptions, by Decree Law 14/8/2020, no. 104.
The provision stated that, to cope with the COVID-19 emergency, private employers who partly benefited from the wage subsidies or the exemption from the payment of social security contributions could not terminate employment contracts for objective justified reasons under Art. 3 of Law 15/7/1966, no. 604 of 15/7/1966, regardless of the number of employees. The ongoing procedures at the Local Labour Inspectorate referred to in Art. 7 of the same law, were suspended.
The prohibitions and suspensions listed above did not apply in the following cases:
a) redundancies due to the definitive cessation of the company business, resulting from the company liquidation without any business continuation;
b) collective bargaining agreement, stipulated by the trade unions that are comparatively more representative at the national level, as an incentive to terminate the relationship;
c) redundancies due to bankruptcy when there was no company provisional operation or business termination.
Since the introduction of the dismissal prohibition, two opposing approaches have alternated in legal theory and case law on the applicability of this emergency legislation to individual dismissals of managers.
Continue reading the full version published on Guida al lavoro of Il Sole 24 Ore.
