With the recent judgment No. 20284 of 14 July 2023, the Italian Court of Cassation ruled that, even though not specifically provided for in the disciplinary code, breaches by the employee of the fundamental duties underlying the employment relationship are valid grounds for dismissal.
The facts of the case
An employee working as a Level I salesperson was dismissed by the employer company due to his constant failure to meet the production targets periodically set by the company.
The employee challenged the dismissal before the Court, which – by comparing the results achieved by the employee with the targets set by the company schedules – confirmed the unequivocal poor production performance of the worker. Therefore, the Judge hearing the case declared the dismissal to be lawful, classifying it as dismissal for a justified subjective reason.
The worker appealed the ruling before the Rome Court of Appeal, where he argued that the dismissal was unlawful due to the failure to display the disciplinary code in the company.
In this regard, the Court, in upholding the judgment of first instance, held that the failure to display the disciplinary code in the company was irrelevant for the purposes of determining the nature of the dismissal, since the worker was charged with negligent and inexperienced failure to fulfil his obligations under the employment contract, and that the dismissal was based on the worker’s poor production performance resulting from his constant failure to comply with the work schedules previously established.
For the Court, moreover, for the purposes of assessing the seriousness of the misconduct, previous disciplinary records that indicate the worker’s repeated offences must also be taken into account.
The worker therefore challenged the judgment of the Court of Appeal before the Italian Court of Cassation.
The decision of the Italian Court of Cassation
When confronted with the issue, the Italian Court of Cassation confirmed the rulings of the lower courts on the lawfulness of the dismissal.
First of all, the Judges of the Italian Court of Cassation reiterate that the power to terminate the employment contract in the event of significant breach of contractual obligations stems directly from the law (Article 3 of Italian Law No. 604 of 1966) and does not require, in order for it to be lawfully exercised, a detailed provision, in the collective bargaining agreement or in the company disciplinary regulations, of every possible instance of conduct constituting the above requirement. Indeed, it is for the judge to verify, if the lawfulness of the termination is contested, whether the alleged incidents constitute a legal case of non-performance.
For this reason, continues the Court, even if not specifically provided for by the contractual provisions, serious breaches of the fundamental duties associated with the employment relationship constitute grounds for valid notice of withdrawal; in particular, those duties that underpin the existence of the employment relationship, such as the duties imposed by Articles 2104 and 2105 of the Italian Civil Code (obligations of diligence and loyalty) as well as those deriving from company policies.
Therefore, according to the Italian Court of Cassation, with regard to disciplinary sanctions, a distinction must be made between offences relating to the breach of specific rules concerning company organisation and production methods, which can only be recognised insofar as they are expressly provided for, and offences relating to conduct that is manifestly contrary to the duties of workers and the interests of the company, for which specific inclusion in the disciplinary code is not required.
With regard to the disciplinary code, the judges reiterate that it must, in any event, be drafted in such a manner as to make the cases of infringement clear, although by providing an outline and not a detailed description, and to indicate the corresponding penalties, albeit in a general manner and which can be adapted based on the actual and specific non-compliance.
Ultimately, therefore, the aforementioned judgments uphold the lawfulness of the employer’s termination of employment even where the alleged breach of contract does not constitute a case that is expressly set out in the company’s disciplinary code or in the national collective bargaining agreement, but takes place by infringing the duties underlying the employment relationship.
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