Italian Court of Cassation: Dismissal for poor performance, proof of significant breach of duty required

Categories: DLP Insights, Case Law, News, Press review | Tag: Labour litigation, labour law

04 May 2023

By Order of 6 April 2023, No 9453, the Italian Court of Cassation ruled on the subject of dismissal for poor performance. The Court clarified that this type of dismissal falls within the scope of dismissals for justified subjective reasons resulting from a significant breach by the worker of his/her contractual obligations. In this context, the employer must provide proof that the failure to achieve a predetermined result – which does not in itself constitute a breach of contract – results from a clear breach of the duty of diligent cooperation owed by the employee which is attributable to him/her.

The facts of the case and the judgment on the merits

On 5 July 2016, a worker in the Development Department of a banking institution was dismissed for just cause on the basis of five disciplinary charges. One of these charges related specifically to poor performance, alleged for the period from November 2015 to April 2016. For this period the bank had compared the small number of visits to branches and customers made by the worker involved in the disciplinary proceedings with the production figures of other colleagues working in the same office and with the same duties, which were found to be significantly higher.

In the context of the Fornero Procedure (Rito Fornero) and with particular reference to the charge of poor performance, the Court of Treviso, while ascertaining that there had been a breach of principle of promptness of the disciplinary notice, confirmed that there had also been poor performance. Therefore, on this basis, the Court limited the worker’s protection to the indemnity for damages under Article 18, paragraph 6 of Italian Law No 300/70, in the amount of 12 months’ salary.

In opposition proceedings under Article 1, paragraph 57 of Italian Law No 92/2012, the Court of Treviso confirmed the existence of poor performance which, overcoming the objection of breach of promptness of the disciplinary notice, was sufficient to justify the termination for poor performance. That being so, that Court – referring to the provisions of the CCNL (Contratto Collettivo Nazionale di Lavoro, national collective bargaining agreement) applied to the employment relationship – converted the dismissal for just cause into a dismissal for justified subjective reason, ordering the employer to repay the indemnity for damages under Article 18, paragraph 6 of Italian Law No 300/70 referred to above, net of the indemnity in lieu of notice.

On appeal, the regional Court of Venice upheld the first instance judgement of the Court of Treviso, considering the breach alleged against the worker to be of considerable significance, also taking into account the lack of objective evidence provided by the worker to justify his reduced activity.

The judgment of the Italian Court of Cassation

The worker appealed to the Italian Court of Cassation against the decision taken by the Venice Court of Appeal, which the bank resisted with a counter-appeal.

With particular reference to the issue of poor performance, the Italian Court of Cassation, on the basis of its own precedents, confirmed that dismissal for poor performance falls within the category of dismissals for justified subjective reasons, in respect of which the employer has the burden of proving not only the failure to achieve the expected result, but also that it is attributable to a culpable and negligent breach of the worker’s obligations arising from the underlying employment relationship.

In this case the Italian Court of Cassation agreed with the finding made by the Court of Treviso, noting that the worker’s performance was inadequate in view of the small number of visits made to customers and taking into account the acquisition of only one customer in the period of time taken into consideration by the employer, which, compared to the production data of the other colleagues, had led the judge of first instance to find poor performance and its seriousness.

On the subject of proof, the Italian Court of Cassation found that the Venice Court had correctly ‘assessed the breach of contract alleged’ against the appellant, ‘once the scenarios alleged by the worker (…) that could have at least partly justified it had been excluded’. Moreover, the Italian Court of Cassation, again referring to its own precedents, specified that, for the assessment of the seriousness of the breach, deviation by the worker from any ‘parameters for ascertaining whether the service was performed with average diligence and professionalism’, taking into account that the activity was performed for ‘an appreciable period of time’, ‘may constitute a signal or indication of inadequate performance’.

In support of this view, the Italian Court of Cassation referred to another of its precedents (Italian Civil Court of Cassation, Employment Division, judgment No 18678 of 4 September 2014) which confirmed the lawfulness of a dismissal for poor performance of a worker who had been found to have committed a ‘clear breach of the diligent cooperation due from him’ and which was attributable to him, ‘as a result of the enormous disproportion between the objectives set by the production programmes for the worker and what was actually achieved in the reference period, taking into account the average activity among the various employees and regardless of the achievement of a minimum production threshold’.

On the other hand, with regard to the short period of time considered for the purpose of assessing the breach of contract, the Italian Court of Cassation rejected the appellant’s arguments, especially in view of the fact that the evidence offered by the employer (i.e., the comparison of the data of the dismissed worker’s activity with those of his colleagues) had revealed ‘a very significant disproportion between the performance of the present appellant and that of several of his colleagues in the same development office; a disproportion which, in turn, can clearly constitute a significant breach of the worker’s contractual obligations’.

The worker’s appeal was therefore dismissed and he was ordered to pay the costs of the proceedings.

Other related insights:

Dismissal for poor performance is unlawful if based on conduct previously raised against the worker

Dismissal of employees for poor performance. What is ‘poor performance’ (Newsletter Norme & Tributi No 167 Camera di Commercio Italo-Germanica – Vittorio De Luca, Luca Cairoli)

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