First disapplication of the increasing protections after the Constitutional Court’s ruling

On 26 September 2018, the Constitutional Court announced in a press release that it had declared art. 3 of Legislative Decree 23/15 (“Provisions governing open term increasing protections employment contracts implementing Law no. 183, 10 December 2014”) constitutionally unlawful in the part that is not amended by Legislative Decree 87/2018 (the “Dignity Decree”), converted into Law 96/2018, which determines in a rigid manner the indemnity due to a worker who has been unjustifiably dismissed. This is because, as the press release specifies, providing for an increasing indemnity only in relation to the worker’s seniority “is contrary to the principles of reasonableness and equality, and contradicts the law and the employment protection set out by Articles 4 and 35 of the Constitution.” Pending publication of the judgement, with order 7016 dated 11 October 2018, the Court of Bari decided to disapply the calculation criterion that was declared to be unconstitutional.

The ruling of the Labour Court

The Labour Court of Bari, having to establish whether the dismissal of a worker employed under the Jobs Act following the conclusion of a collective dismissal procedure was unlawful, declared the employment relationship terminated and ordered the former employer company to pay an indemnity equal to 12 monthly pays based on the worker’s last salary used for the calculation of the severance indemnity, instead of the 4 monthly pays the worker would have been entitled to based on his 1.5 year seniority.

In particular, in reaching this decision, the Court indicated that:

• pursuant to Article 10 of Legislative Decree 23/2015 “(…) In the event of violation of the procedures indicated in Article 4, paragraph 12 or of the selection criteria under Article 5, paragraph 1 of Law 223/1991, the regime under Article 3, paragraph 1 will apply”;
• Article 3, paragraph 1, of Legislative Decree 23/2015 states the following: “Without prejudice to the provisions of paragraph 2, in cases where it is ascertained that the grounds for dismissal for a justified objective reason or for a justified subjective reason or for just cause are lacking, the Court shall declare the employment relationship terminated as of the dismissal date and shall order the employer to pay an indemnity which shall not be subject to social security contribution equal to two months of the last salary used for calculation of that employee’s severance indemnity for each year of service, but which shall nevertheless be no lower than four and no higher than twenty-four monthly pays”;
• for workers who are subject to the regime set by the Fornero Law, failure to observe the procedures in question leads to the “high indemnity” protection under Article 18, par. 7, third sentence of Law 300/1970, which in turn refers to paragraph 5 of the same article. In particular, (i) paragraph 7 provides that: ”in the other cases in which the Court ascertains that the grounds underlying the aforementioned justified reasons are lacking, the provisions under paragraph five shall be applied. In this latter case, to determine the indemnity within the minimum and maximum amount provided, the Court shall also consider, in addition to the criteria under paragraph five, the initiatives taken by the worker to find new employment and the conduct of the parties in the procedure under Article 7 of Law 604 of 15 July 1966, as subsequently amended” and (ii) paragraph 5 states that “In the other cases in which the Court ascertains that the grounds for a justified subjective reason or just cause alleged by the employer do not apply, the Court shall declare the employment relationship terminated as of the dismissal date and shall order the employer to pay a comprehensive indemnity of at least twelve and at most twenty-four monthly pays, based on the last comprehensive salary actually received by the worker, in relation to the worker’s seniority and in consideration of the number of staff employed, the size of the economic activity, the conduct and conditions of the parties, while a specific reason must be provided in that respect”). In fact, this protection was invoked by the worker in the conclusions stated in his appeal;
• as the worker was hired under the Jobs Act, the provisions of Legislative Decree 23/2015 will undoubtedly apply, but not the new provisions introduced by the Dignity Decree, which most recently amended Article 3, paragraph 1 of Legislative Decree 23/2015, increasing the amount of the indemnity (now between six and thirty-six monthly pays). This is because the dismissal in question was enforced prior to the entry into force of the Dignity Decree.

Therefore, in the Court’s opinion, the worker would have only been able to hope for an indemnity of 4 monthly pays, based on the last salary used for the calculation of the severance indemnity. Despite this, the Court considers that account still must be taken of the Constitutional Court’s decision.

In consideration of the above, the Judge concludes that “while taking into account that “The rules declared to be unconstitutional cannot be applicable from the day following publication of the ruling ” (Article 30 par. 3 of Law 87/1953, pursuant to Article 136 par. 1 of the Italian Constitution), and that such publication has not yet occurred in this case, Article 3 par. 1 should be interpreted with a constitutional orientation, as still applicable (presumably for just a few days), setting the indemnity payable to the unjustly dismissed worker of a minimum of 4 and a maximum of 24 monthly pays, based on the previously mentioned criteria of Article 18 par. 5 of the Italian Workers’ Statute, which is in turn referenced in Article 18, par. 7, that is “in relation to the worker’s seniority and in consideration of the number of staff employed, the size of the economic activity, the conduct and conditions of the parties.”

In determining that the indemnity due to the worker would amount to 12 monthly pays, the Court considered, in addition to the worker’s seniority, also other criteria such as (i) the considerable seriousness of the procedural omission (within the collective dismissal procedure), (ii) the low number of staff employed by the company and (iii) the size of the company’s economic activity.