In the case of a sham outsourcing contract, dismissal must be by principal (Newsletter Norme & Tributi n. 177 Camera di Commercio Italo-Germanica – Vittorio De Luca, Irene Crisci)

In judgment no. 32412 of 22 November 2023, the Italian Court of Cassation dealt with the lawfulness of a dismissal by the formal employer of a worker employed under a sham outsourcing contract.

A worker brought legal proceedings to obtain a declaration of the existence of an employment relationship with the principal company, and that, consequently his dismissal was ineffective because it was ordered by the contractor and not by the ‘actual’ employer. The worker also sought reinstatement. The Italian Court of Cassation, hearing the case, first affirmed that the worker was not precluded from bringing legal proceedings for a declaration of the existence of a sham intermediary and to obtain the recognition of an employment relationship with the principal including in the event of dismissal by the contractor. The Italian Court of Cassation also established that in the case of a sham intermediary, the power to dismiss must in any case be exercised by the actual employer and not by the sham one, under penalty of ineffectiveness of the dismissal; the actual employer, in fact, cannot rely on the contractor’s dismissal as an act affecting management of the relationship.