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Collective dismissal: criteria for limiting the range of surplus employees of a department

Categories: DLP Insights, Case Law | Tag: Collective dismissals, surplus employees

03 Feb 2022

The Court of Cassation with its order no. 1242 of 17 January 2022, ruled on the limitation, to a certain department, of the range of employees to dismiss for a collective procedure, setting out the requirements so that such limitation can be considered lawful.

Facts of the case

The event originated from a collective dismissal procedure started by a company for structural purposes following the need for a renewal of the company strategies aimed at remaining competitive on the market. Even if the communication regarding start of the procedure referred exclusively to restructuring needs of the entire company complex, the company limited application of the selection criteria to employees of certain offices.

Faced with an employee’s challenge of the dismissal, the judges of Naples, in the first and second instance, called the dismissal unlawful due to violation of the selection criteria, with consequent sentencing the employer to reinstate the employee and payment in his favour of a medio tempore remuneration matured, with the limit of 12 months in application of art. 18, paragraph 4 of the Workers’ Statute.

Objecting to the Territorial Court ruling, the company appealed to the Court of Cassation alleging, on one side, violation of articles 4 and 5 of Law 223/1991 with reference to the declared unlawfulness of the limit of the range of dismissals to certain units or departments and, on the other hand, the violation of art. 18 of the Workers’ Statute.for having been sentenced to reinstatement of the employee.

The Supreme Court of Cassation’s ruling

With in-depth reasoning, the Court rejected the appeal submitted by the company, stating that the limitation of the employees to dismiss, to be valid, presumes that the employer, in the communication as per art. 4, paragraph 3, of law 223/1991, indicates both the reasons based on which the dismissals are limited in a certain unit or specific sector, and the reasons for which it does not believe to get around the dismissals with the transfer to nearby production units.

The general rule, according to which the workers to dismiss must be identified in the company complex, does not hinder, per se, limiting the range of the involved workers to a certain sector or department. To this end, the Court explained, it is nonetheless necessary that (i) the technical-production requirements be accurately indicated in the communication to start a collective dismissal procedure and (ii) the employer provides proof of the reasons that justify performing the selection within the confines of a narrower area.

The specification in the communication required by art. 4 and aimed so that (i) trade unions are able to verify that there is an adequate causal nexus in the reasons that determine the surplus of personnel and employees being dismissed and (ii) limitation of the range of workers, the dismissal measure was aimed at, is the result of effective organisational needs and reason for the reduction of personnel, adequately described in the same communication and in relation to which there must be consistent compliance.

Furthermore, the Court of Cassation, explained that in the selection of subjects to involve in a collective dismissal – for the purposes of excluding from the comparison workers with equivalent professional capacity assigned to production units not closed and located in the nation – the circumstance that to keep a worker on the job of the closed office it would be necessary to transfer him to another office with higher costs for the company, has no relevance.

To this end the Court found that article 5 of Law 223/1991 in establishing the parameter for identifying the workers to dismiss, reference is not made to occurrence of additional costs nor territorial location of offices.

Lastly, with reference to the consequences connected with the declared unlawfulness, the Supreme Court, referring to previous case law, reiterated how, in the case in hand, there was not a mere procedural violation related to the incomplete communication required by law. According to the Court in this case there was a substantial violation, represented by application of selection criteria to a range of employees to dismiss unlawfully limited compared to the entire company complex, with consequent application of the protection envisaged by article 18, paragraph 4 of the Workers’ Statute.

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