A demerger to avoid the regulations on collective dismissal is against the law

With two “twin” rulings (No. 19863 and No.  20620, the latter filed on 7 August), the Court of Cassation had the opportunity to express its opinion on the rules governing collective dismissals linked to corporate demergers. In the case in question, a company had performed a partial demerger – by assigning to two newly incorporate companies as many corporate branches – redistributing the overall work force among the three legal entities emerged from said transaction. Such a transaction, in the opinion of the Court of Cassation as well as in the opinion of the judges in charge, represents a fraudulent act when, in the period of the following 120 days, multiple dismissals for justified objective reasons take place. In fact, in the case in question a fraudulent attempt was identified – inter alia, concerning the requirements established in articles 4 and 24 of the Law No. 223/1991, thus in the procedure of informing and consulting the unions to safeguard and ensure the choice of employees in excess according to the law criteria – specifically due to the contractual link between the corporate action and the dismissals ordered. In fact, in the opinion of the Court, the corporate demerger allowed triggering individual dismissals subdivided among the newly formed companies (12 the employees dismissed, 4 for each), where the reduced size did not make it necessary to trigger the collective dismissal procedure of personnel. Therefore, even if the method used was lawful in itself, the result achieved was deemed unlawful. The deciding factor, in the opinion of the Court of Cassation, was the fact that upon a work organization that was essentially unchanged – where workers continued to carry out in the same corporate spaces the same tasks – the new corporate setup was solely formal, thus leading solely to a fragmentation of the work force.