Categories: Insights, Publications


13 Feb 2019

The layoff of a manager for cost cutting reasons uncontestable (Il Quotidiano del Lavoro of Il Sole 24 Ore, 14 February 2019 – Alberto De Luca, Gabriele Scafati)

In judgment No. 436/2019 filed on 10 January 2019 the Court of Cassation confirmed that, based on the constitutional principle of freedom of private economic initiative (art. 41 of the Constitution), an entrepreneurial decision to eliminate a job position cannot be challenged.

The Court passed the judgment in a case concerning a director of human resources, administration and finance, who was dismissed due to the elimination of her job position, with the related duties concurrently assigned to the managing director. A decision that was justified by the need to cut costs. The appeal was brought on the grounds, inter alia, of the total lack of experience of the managing director – the newly graduated daughter of the Company’s president. Heading towards the adverse ruling of the judges in charge, which, in fact, both dismissed the appeal, the executive appealed to the Court of Cassation, claiming the violation and misapplication of the law.

Despite rejecting all requests to review the trial court decisions, the Court confirmed the appealed judgment was not flawed and highlighted, however, that the company’s decision to implement a cost cutting plan could not be questioned. Thereby confirming some of its previous rulings, even recent (e.g. Court of Cassation, Civil Law Labour Division, No. 12668/2016 and No. 3628/2012), the Court reiterated the legal principle whereby the dismissal of an executive may well be founded on objective reasons linked to the need to re-organise the business, which may not necessarily coincide with the impossibility of continuing the relationship or with a crisis situation that would make the continuation of such relationship particularly burdensome, considering that the principle of fairness and good faith – which represents the basis of measurement of the lawfulness of a dismissal, even of an executive – must be considered in parallel with the freedom of private economic initiative, as set out in art. 41 of the Constitution.

The Court of Cassation concluded that the Court of Appeal had rightly found that, having ascertained that the executive had been replaced by the managing director, and…

 

Click here to read the full version of the note to the judgment.

Subscribe to our newsletter

Contact

Need information? Write to us and our team of experts will respond as soon as possible.

Fill in the form

More news and insights

3 Aug 2026

Pay Transparency: the first requests from employees are starting to arrive (Il Sole 24 Ore, 3 august 2026 – Vittorio De Luca)

Two months after the decree. Since Legislative Decree 96/2026 came into force on 7 June, according to a flash survey conducted by GIDP, 8% of HR directors have…

30 Jul 2026

Corporate controls and data protection: what balance?

A recent judgment of the Court of Pisa, No. 800 of 13 June 2026, addresses a topic of particular interest for companies: the delicate balance between the protection…

30 Jul 2026

Unfair dismissal and reinstatement: the employee must repay the payment in lieu of notice

With order no. 22187 of 28 June 2026, the Italian Supreme Court addressed the issue of whether payment in lieu of notice paid to an employee must be…

30 Jul 2026

Did you know that… an employee’s natural incapacity does not prevent the time limit for challenging a dismissal from running?

In judgment no. 23486 of 18 July 2026, the Joint Chambers of the Italian Supreme Court (i.e. “Corte di Cassazione”) held that the natural incapacity of an employee…

22 Jul 2026

An employee may not steer clients toward a competitor before resigning (Camera di Commercio Francese in Italia, 22 July 2026 – Vittorio De Luca, Silvia Zulato)

With Order No. 1723 of 26 May 2026, the Italian Supreme Court (Corte di Cassazione) confirmed the liability of an employee who, prior to the termination of his…

20 Jul 2026

Access to Naspi (Top24 Lavoro Ai – Il Sole 24 Ore, 20 July 2026 – Vittorio De Luca e Alessandra Zilla)

Regulatory Framework  The New Social Insurance for Employment (NASpI), introduced by Legislative Decree No. 22 of 4 March 2015, is the primary income support scheme for employees who…