Italian Constitutional Court: reinstatement even if the fact underlying the dismissal for an objective reason does not exist

In judgment no. 128 of 16 July 2024, the Italian Constitutional Court declared Article 3, paragraphs 1 and 2 of Italian Legislative Decree no 23/2015 to be unconstitutional. The Court made this finding on the basis that the provision does not provide that the mitigated reinstatement protection also applies in cases of dismissal for justified objective reasons (giustificato motivo oggettivo, ‘GMO’), where the non-existence of the material fact alleged by the employer is directly proven in court, which is not connected with any assessment regarding the employee’s re-employment.

The facts of the case

A worker, hired on a permanent basis by a staff supply agency, brought legal proceedings challenging his dismissal for a justified objective reason.

The applicant alleged that he had carried out several assignments for the user, for a total duration of less than two years, and that, when the last assignment ceased, the employer – in the absence of further redeployment prospects – had activated the procedure of making him available for lack of job opportunities, under Article 25 of the National Collective Bargaining Agreement (Contratto Collettivo Nazionale di Lavoro, ‘CCNL’) for Staff Supply Agencies. As a result of the procedure the user informed the worker of the termination of his employment for justified objective reasons.

The worker disputed that there were no vacancies in positions requiring his professional skills because they had actually been allocated to other workers.

Therefore, the worker demanded, as his main claim – under Article 3, paragraph 2 of Italian Legislative Decree no. 23 of 2015 – reinstatement to his position, in addition to compensation equal to the last reference salary for the calculation of severance pay from the day of dismissal to the actual reinstatement. In the alternative he sought payment of the compensation referred to in paragraph 1 of the same provision.

Hearing the case, the Court of Ravenna raised questions on the constitutionality of Article 3, paragraphs 1 and 2 of Italian Legislative Decree no. 23/2015, insofar as the rule provides for the exclusion of reinstatement where the court finds that the fact underlying the dismissal for justified objective reason does not exist.

The Italian Constitutional Court’s judgment

As a preliminary point the Court noted that although the reasons underlying the dismissal on the grounds of justified objective reason cannot be reviewed on the merits, the principle of necessary causality of the employer’s dismissal requires that the material fact on which the employer’s actions are based must exist.

The Court continued that otherwise this would create an unreasonable difference between that this scenario and the parallel scenario of a disciplinary dismissal which, if based on an unfounded allegation, leads to reinstatement.

Moreover, this would allow the employer party to arbitrarily choose, in the case of a dismissal based on an unsubstantiated fact, to classify it as a dismissal for a justified objective reason rather than as a disciplinary dismissal, for the sole purpose of avoiding the risk of reinstatement.

In light of the above, the Italian Constitutional Court upheld the questions raised with reference to the breach of Article 3, 4 and 35 of the Italian Constitution. The Court declared the unconstitutionality of Article 3, paragraphs 1 and 2 of Italian Legislative Decree no. 23/2015, insofar as it excludes reinstatement where the court finds that the fact underlying the dismissal for a justified objective reason does not exist.

Finally, the Court clarified that the issue of unconstitutionality does not arise, however, if the material fact alleged by the employer as the basis for the dismissal exists, but the dismissal is based on a breach of the repêchage (obligation to relocate) obligation. It follows that a breach of this obligation only gives rise to the right to compensation set out in Article 3, first paragraph, of Italian Legislative Decree no. 23 of 2015.

Other related insights:

• Dismissal and groundlessness of facts (Modulo24 Contenzioso Lavoro (Form24 Labour Litigation) of Il Sole 24 Ore, 28 March, Vittorio De Luca)
• Mandatory reinstatement in case of clear lack of justified objective reason for dismissal