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Dismissal for objective just cause – company crisis not necessary – greater profit (Il Sole 24 Ore and Il Quotidiano del Lavoro, 15 december 2015)

With its ruling no. 23620 of 18 November 2015, the Cassation Court has declared dismissal for objective just cause lawful even if not aimed at avoiding losses but rather to achieve higher profit for the company. In the case at issue, a lab technician working in a company in the private healthcare sector and accredited with the national healthcare system, challenged a dismissal. The worker felt that the elimination of her position due to a company crisis was unjustified as well as the later assignment of her duties to other colleagues, employees of the analysis and radiology laboratory. The Court and the Appellate Court upheld her appeal, sustaining that the company had not proven the need to eliminate the position of the worker and the company crisis, considering the question on the legitimacy of assigning the duties initially assigned to her to another person to be subsumed. The company challenged the decision in the Cassation Court. In the meantime, with another petition, the worker asked the judge to declare a second dismissal from the company unlawful, based on discriminatory and retaliative grounds. Both the Court and the Appellate Court granted the worker’s allegations, with arguments similar to those the previous rulings had been based on. Again in this circumstance the company appealed to the Cassation Court. Specifically, the company sustained that the reason for the worker’s dismissal was based on (i) the need, imposed by the Region, to hire a director for the analysis laboratory with a university degree in biology or chemistry and (ii) the fact that the duties assigned to her were no longer useful, plus the impossibility to give her a position in other departments due to their economic difficulties. The Cassation Court, in its decision first explained that according to case law the reasons for a dismissal must be objectively verifiable and the relative burden of proof lies with the employer. Therefore, if the employer does not meet this burden of proof, exercising organisational power must be considered unlawful due to abuse, despite business decisions being unchallengeable by the judge pursuant to article 30, paragraph 1 of Italian Law no. 183/2010 (so-called Collegato Lavoro), which is aimed at more intensive protection of a company’s organisational freedom. Nevertheless, the Supreme Court observed that the employment contract can be terminated not only to downsize production but also following a burden not foreseen at the time of hiring but emerging later on. This burden, according to the Cassation Court, may also entail “an assessment by the entrepreneur which, based on the company’s economic performance reported after the conclusion of the contract, indicates the possibility of replacing less qualified personnel with employees in possession of greater knowledge and experience and thus productive aptitudes”. According to the Supreme Court this is an exercise of assessment that cannot be verified on merit by the judge. The Cassation Court also confirmed that the judge cannot even control the aim, to enhance and not impoverish, pursued by the employer. This is because “an increase in profit does not translate, or does not only translate, into an advantage for his individual assets but mainly in an increase in the company’s profit, i.e. in a benefit for all workers”. The Court also observed that the lower court judges had erred in not verifying, once the absence of a drop in production was discovered, the assignment of the duties initially assigned to the dismissed worker to another employee with a university degree in biology. The same Court then concluded that judicial control of “the real operation of personnel reorganisation and redistribution of duties”, must also include verification of the economic difficulties of other departments, ordering that such verification be remanded to the trail judges.


Il Sole 24 Ore