DLP Insights

Contract term ineffectiveness if there is a company transfer

Categories: DLP Insights, Case Law | Tag: Court of Cassation, Corte di Cassazione

31 Oct 2022

In its order no. 21453 of 6 July 2022, the Court of Cassation stated that if there is a company transfer, a worker reinstated after the employment contract term’s ineffectiveness was confirmed, is treated as transferred ex lege to the transferee.

Facts of the case

The case concerns the effectiveness of a business transfer for a worker hired under a fixed-term contract by the transferor and re-employed by the transferee afterwards.

The Court of First Instance and the Court of Appeal of Milan held that the worker should be considered an integral part of the company at the time of the transfer and automatically transferred to the transferee. This is due to the reinstatement effects of the ruling confirming the ineffectiveness of the employment contract term.

The trial Court stated that the employment relationship was converted to open-ended following a ruling confirming the term ineffectiveness making the relationship existing “de iure even if not de facto,” even if at the time of the company transfer the employment relationship did not exist due to the contract term expiry.

The employer company appealed against the decision of the Court of Appeal of Milan.

The Supreme Court order

The Court of Cassation rejected the appeal brought by the transferee company and stated that the ruling confirmed the ineffectiveness of the employment contract’s fixed term and ordered the re-establishment of the illegally terminated relationship which was declaratory and not constitutive.

The conversion into an open-ended employment relationship has an “ex tunc” effect i.e., from the date of the fixed-term contract unlawful termination.

Once the ineffectiveness of the employment contract term has been confirmed, the employment relationship becomes open-ended ab origine with the consequent automatic continuation of the employment relationship under the transferee under Art. 2112 of the Italian Civil Code.

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