Italian Court of Cassation: worker who resigns not entitled to compensation in lieu of notice

In its recent Order no. 6782 of 14 March 2024, the Italian Court of Cassation affirmed the following principle of law: “in the case of a permanent employment relationship, the employer’s waiver of the notice period, in the face of the worker’s resignation, does not give rise to the latter’s right to obtain compensation in lieu of notice because of the mandatory nature of notice”.

An employee resigned and her employer agreed to exempt her from working during her notice period, without paying her the relevant compensation in lieu of notice.

The resigning worker applied to the court for payment of the compensation in lieu of notice.

The Court of Pisa upheld the worker’s application and, on appeal, the ruling was also confirmed by the Florence Court of Appeal.

Both lower courts based their reasoning on the assumption that the employer, despite having exempted the appellant from working during her notice period, was nevertheless obliged to pay the equivalent of the amount of the salary that would have been due to the applicant for the notice period.

The company appealed against the decision of the Court of Appeal to the Italian Court of Cassation.

The Italian Court of Cassation judges, reversing the first instance ruling, held that in the context of a permanent employment relationship, the employer’s waiver of the notice period in the face of the employee’s resignation “does not give rise to the latter’s right to obtain compensation in lieu of notice because of the mandatory nature of notice”.

The judges therefore emphasised that notice is mandatory and, therefore, if one of the parties exercises the right to withdraw with immediate effect, the relationship also terminates immediately, and the only obligation that arises is that of the withdrawing party to pay the compensation in lieu of notice.

According to the Italian Court of Cassation judges, however, the other party can waive the notice without paying anything to the other party, who cannot claim any right to the continuation of the employment relationship until the notice ends.

On this basis, the Italian Court of Cassation upheld the appeal brought by the company, ruling that the resigning worker was not entitled to compensation in lieu of notice.

Other related insights:

• Resignation: Waiver of notice by the employer annuls the executive’s right to the relevant payment in lieu of notice – De Luca & Partners (delucapartners.it)