DLP Insights

Termination during the probationary period is null during dismissal prohibition if based on a need to reduce costs

Categories: DLP Insights, Case Law | Tag: dismissal prohibition, probationary period

28 Apr 2021

In its 25 March 2021 ruling, The Court of Rome, declared the termination of employment during the probationary period, null and void because it was contrary to the dismissal prohibition for financial reasons, introduced by art. 46 of Decree Law 18/2020 (“Cure Italy Decree”) and confirmed by the emergency legislation that succeeded the Decree, if based on the need to remove a position considered costly.

Facts of the case

In March 2020 a hotel hired an employee and the employment contract included a six-month probationary period. Only ten days after the start of employment, due to the onset of the Covid-19 epidemiological emergency, the hotel was forced to temporarily close to the public. As a result of the closure, the Personnel Department notified employees of the activation of the Redundancy Fund (“FIS“), but then revoked it only for the plaintiff because she did not meet the requirements for such activation (her employment began after 23 March 2020). The employee was placed in smart working mode. Despite the limited operations at the hotel the employee managed to carry out various tasks (conference calls, daily contacts with representatives of the sales department, sharing commercial initiatives etc.).

Subsequently, on 16 April 2020, the hotel informed the employee of its intention to terminate her employment during the probationary period. The employee then appealed to the Court of Rome to have the termination declared null and void as – in her opinion – it was based on an unlawful determining reason.

The Court of Rome’s decision

Before going into the merits of the matter, the Court of Rome referred to certain principles expressed by the Supreme Court regarding termination during the probationary period. The Court of Rome said that according to the Supreme Court (i) during said period “the termination right does not mean (…) that it is at the total discretion of the employer” and (ii) “the possibility to review the exercise of termination by the entrepreneur during the probationary period should be recognised along with the possibility to annul the act which expressed it, whenever the employee considers and knows how to demonstrate the successful completion of the probation and can attribute the dismissal to an unlawful reason (see ruling no. 1180/2017).

According to the Court of Rome, the Court of Cassation would deny legal dignity to the exercise of straightforward discretion functionally unrelated to the probation agreement by requiring the worker to prove they have positively passed the probation and that the termination was related to unlawful reasons unrelated to the agreement.

And in this case, the Rome Court judge deemed that the burden of proof regarding the successful completion of the probationary period had been met, given that (i) the employee had listed the duties carried out during that period. She was able to produce suitable documentation to demonstrate that she had performed them in an irreproachable manner and was appreciated by her contact persons. (ii) The respondent company had not contested the performance of those duties.

The Court identified serious, precise and concordant evidence having the value of proof to support the idea that the Company terminated the relationship for overt financial reasons needed to eliminate an expensive position rather than for reasons linked to the probationary performance.

According to the Court, such evidence was found in (i) the initial inclusion of the employee’s position in the number of employees for whom access to the Redundancy Fund (FIS) was requested (as proof of her full integration into the Company’s workforce); (ii) the fact that the employer formally requested the Redundancy Fund (albeit subsequently revoked) at zero hours, thus proving her inability to carry out her operational duties; (iii) the respondent company’s situation of objective, severe financial difficulty, a circumstance to be considered a known fact for hotels during the emergency period.

Once ascertained the successful completion of the probationary period and the real reason for the dismissal, i.e. the need to remove a resource that had become excessively onerous, the judge declared the “absolute nullity of the employer’s termination under the combined provisions of articles  1418 and 1345 of the Civil Code, since the real reason that justified the measure is in violation of art. 46 of Decree Law 18/2020” and as such it is unlawful.

Under Art. 2 of Legislative Decree no. 23/2015, the employer company was ordered to reinstate the employee in service and consequent payment of damages and social security contributions.

◊◊◊◊

The ruling in question reminds us that, while the employer can terminate the relationship during the probationary period without justified reason, it is a well-established principle that the termination right does not mean that it is at the employer’s discretion. This discretion must be circumscribed within the scope of the function for which the probationary agreement is intended. Termination may be considered null and void if the employee can prove that the probation has been completed and that the real reason is to be found in an unlawful determining reason unrelated to the probation conduct (in this case, contrary to the dismissal prohibition for financial reasons introduced by Art. 46 of the “Cure Italy” Decree). Consequently, the employer was ordered to reinstate the employee and pay compensation for damages and social security and welfare contributions.

Other related insights:

More insights