The company may not unilaterally withdraw from the National Collective Labour Agreement before its expiry date

The Court of Cassation, in judgement 21357/2019, stated that a company cannot unilaterally withdraw from the collective agreement signed by the employers’ association to which it adhered before its expiry. This, even though this contract has become too expensive over time.

The facts

The Court of Appeals of Turin upheld the decision of first instance when it had rejected the opposition of the Federazione Italiana Lavoratori Chimica Tessile Energia Manifatture FILCTEM [Italian Federation Chemical Textile Energy Manufacturing Workers] – CGIL [Italian General Confederation of Workers] Provincial of Turin and the counter-claim of the employer company against the aforementioned decree, which had declared the anti-union nature of its conduct. This conduct consisted in not having informed and consulted the FILCTEM trade union about the negotiations that resulted in the agreement of 13 December 2011, involving the extension to all employees of the specific collective bargaining agreement of 29 December 2011 in its final version, concluded with FIM CISL, UILM, FISMIC, UGL and Associazione Quadri e Capi Fiat [Fiat Executives and Leaders Association].

The District Court, denying the inferred anti-unionism, confirmed the legitimacy of the stipulation of a new collective agreement with the trade unions in full or in part different (even by sector – metalworker) than those who had stipulated the previous one. In deciding in this sense, the Court of Appeals had referred to a ruling of the Supreme Court, according to which there is no obligation in the legal system for the employer to negotiate and enter into collective agreements with all the trade unions, the possibility of signing a new collective agreement with the trade unions falling within the autonomy of negotiations even different from those that had negotiated and signed the previous one.

The reason given for concluding the different contract was that in eight of the thirteen plants the CCNL for the metalworking sector had been applied even before 1 January 2012, to which was added the fact that the majority of the 27 RSU of the five plants in which the CCNL for the rubber-plastic sector was applied was not attributable to FILCTEM – CGIL, as was the majority of the 58 RSU of all the plants.

FILCETEM appealed against that decision to the Court of Cassation, entrusting the challenge to a single reason to which the company filed a counter-claim.

The decision of the Court of Cassation

The Court of Cassation, in upholding FILCETEM’s appeal, referred to a well-established orientation according to which“in the collective labour agreement the possibility of termination is the sole responsibility of the contracting parties, i.e. the trade unions and employers’ associations, which normally also regulate the consequences of termination; the individual employer, therefore, is not allowed to unilaterally withdraw from the collective agreement, not even on the grounds of its excessive burden, pursuant to Article. 1467 Italian Civil Code, resulting from its own situation of economic difficulty, except for the hypothesis of company contracts entered into by the individual employer with local trade unions of the workers” (see Cassation. 8994/2011, Cass. 3296/2002, and Cass. 15863/2002 reiteration by Cass. 25062/2013). Therefore “it is not legitimate for the employer to unilaterally terminate the applied contract even if it is accompanied by a reasonable period of notice. Only at the time of the contractual expiry will it be possible to withdraw from the contract and apply a different one on condition that the conditions set out in art. 2069 of the Italian Civil Code are met“ (cfr. Cass. 25062/2013).

The employer must be granted the right to withdraw from a collective agreement under general law concluded for an indefinite period and without predetermining the expiry date, since the contract cannot bind all the contracting parties forever. Otherwise, the cause and social function of the collective bargaining would be worthless, the discipline of which, always modelled in terms of time that are not excessively extended, must be configured on a constantly evolving socio-economic reality. It is understood that the withdrawal must be exercised in accordance with the criteria of good faith and fairness in the execution of the contract and must not be detrimental to the intangible rights of workers, arising from the previous more favourable rules and entered definitively in their assets (see Cass. 25 February 1997 no. 1694; Court of Cassation 18 October 2002 no. 14827; Court of Cassation 20 September 2005 no. 18508; Court of Cassation 20 December 2006 no. 27198; Court of Cassation 20 August 2009 no. 18548; Court of Cassation 28 October 2013, No. 24268). There is, however, no similar early termination option for collective agreements with a predetermined duration.

In view of the above, in the opinion of the Supreme Court, the application of a new national collective bargaining agreement cannot be allowed before the scheduled expiry of the one currently being applied, which the parties have undertaken to comply with.

In this context, according to the Court of Cassation, the company’s argument that a possible second-level contract may give the employer the power to withdraw early from a higher-level collective agreement cannot be accepted either.

The Court of Cassation, however, overturned the ruling and referred the case back to the Court of Turin, in a different composition, which will carry out the new examination on the basis of what it highlighted.