With its order 24139/2018, the Court of Cassation clarified that in order to render the office of a company’s director gratuitous rather than remunerated, a lack of requests for payment is not sufficient, as a specific clause indicating the gratuitous nature of the director’s services must be included in the contract or the company’s articles of association.

The Facts

This case began from a request for payment made by a director of a limited liability company, which was accepted in the first instance, but rejected on appeal.

In particular, the director had claimed remuneration for the period he was in office from 2001 to 2006. The Court of first instance had accepted the claim and recognised that remuneration was due. The Court of Appeal having jurisdiction for the action brought by the company had accepted the latter’s claims, finding that the lack of a claim for remuneration, whether while the director was in office or after termination, constituted a waiver due to conclusive facts.

The Court of Cassation dealing with the director’s appeal once again reversed the ruling and accepted the reasons put forth for the claim.

The ruling of the Court of Cassation

According to the Supreme Court the office of a director is presumed to be remunerated in accordance with Article 1709 of the Italian Civil Code, stating that: “The office is presumed to be against remuneration. If not determined by the parties, the amount of the remuneration shall be determined based on professional fees or practices; in the lack thereof, it shall be determined by the court.” By accepting the office, the director therefore acquires the right to receive remuneration and any failure to act, i.e. failure to claim the remuneration, while in office and upon termination, is not in and of itself sufficiently indicative of a tacit, valid and effective waiver pursuant to Article 1236 of the Italian Civil Code. This is because in this case no intention that was objectively incompatible with maintaining the right to be remunerated was detected. Finally, the Court underlines that, given the presumption of remuneration, the gratuitous nature of the office must be established expressly or through a specific provision in the company’s articles of association or a specific agreement to this end with the Director.

Conclusions

The director of a company is entitled to receive remuneration for his or her service, which is presumed to be provided against remuneration. This is notwithstanding any failure to act by the director. The gratuitous nature of the office can therefore only ensue from an ad hoc arrangement.

The Court of Cassation, with judgement no. 21438 dated 30 August 2018, ruled again on the subject matter of dismissal for cancellation of the job position. More specifically, a worker – among other things – had filed an opposition against the dismissal imposed on him, seeking annulment thereof, as he considered it retaliatory, and consequently, payment of a non-reinstatement allowance, equal to 15 monthly pays of the last comprehensive salary actually received, and the payment of damage in the amount of 14 monthly pays of his last actual comprehensive salary. In reviewing the judgment of the court of first instance, the Court of Appeal found the dismissal unlawful, even though in its opinion it was not discriminatory. This decision was due to the fact that the company had not proven the reasons why the petitioner had been dismissed, while other employees that performed the same duties and had less seniority than him had not been dismissed. Since the Court of Appeal found that the prerequisites for the actual protection regime did not apply, it condemned the employer to pay an allowance in the amount of 6 monthly pays of the last comprehensive salary actually received by the worker. In filing an appeal against this decision, the company argued, among other things, that in the course of the proceedings it had proven that (i) the closing of the division had been necessary due to critical circumstances of the company and (ii) in continuing the business, the company had preferred the use of semi-finished products, thus saving another sector. Therefore, in its opinion, the workers employed in such sector could not been dismissed, since the petitioner had never worked in it and lacked the necessary skills. The Court of Cassation found the above ground inadmissible on the assumption that the court of first instance had established, on the basis of preliminary findings and the submitted documents, that “there had been a mere reduction in the production activities” and that the company “had deemed it proper to privilege certain sectors without suppressing any”. Also, the company complained about the violation and wrongful application of Article 5, Law no. 223/1991, because the dismissal was not due to a reduction of equivalent and replaceable personnel but to the suppression of a sector of activities, whose one and only employee was the appellant. The Court of Cassation also rejected the above complaint. On this point, making reference to previous rulings of its own, the Court of Cassation first noted that the cause for dismissal should be evaluated by the employer, without the court having a say so on the selection of the company’s management criteria, in accordance with Article 41 of the Constitution. The Court of Cassation then reiterated that a dismissal for justified objective reasons is considered lawful if the conditions referred to in Article 3, Law no. 604/1966 are met. This means: a) cancellation of the division/job in which the worker is employed, without necessarily suppressing all duties previously assigned to him/her; b) attribution of the cancellation to the employer’s plans and choices that affect the undertaking’s structure and organization – the adequacy and appropriateness of which cannot be questioned by a court of law, provided they are real and not simulated; and c) impossibility to employ the worker in other duties. The Court of Cassation also remarked that the burden of proving the satisfaction of these pre-requisites rests on the employer, who can fulfil it also by way of presumptions. The worker’s obligation to prove the existence of assignable positions is expressly excluded. Also, according to the Court, if the justified objective reason consists of a generic reduction of homogeneous and replaceable personnel, neither the normal criterion of the job position to cancel nor the criterion of the impossibility to carry out a repêchage are applicable, because the former is no longer necessary and because all job positions are equivalent and all workers are potentially dismissible. Nonetheless, the choice of the worker to dismiss is not at the absolute discretion of the employer, which is however limited by the prohibition to discriminate and by the rules of correctness and good faith, pursuant to Articles 1175 and 1375 of the Italian Civil Code. On the matter, the Court of Cassation remarked that the judges discussed the issue of how to identify in practical terms the criteria that allow deeming said choice compliant with the aforementioned principles, deeming that it is necessary to refer, even while taking into account the diversity of the respective regimes, to the criteria established by Article 5 of Law No. 223/1991 governing collective dismissals, where the trade union agreement fails to indicate alternative criteria for such choice. Consequently, according to the Court of Cassation, in the case at hand, by the same token, the criteria of dependent family members and seniority level can be taken into consideration, given that the technical/productive and organizational needs are irrelevant, in the light of a full replaceability of workers. In other words, according to the Court of Cassation, even if several positions are interchangeable, where the criterion of the impossibility to carry out a repêchage does not apply, the employer should select the worker to dismiss on the basis of correctness and good faith. These principles – the Court went on to say – can be considered fulfilled if the employer, in selecting the workers to dismiss, keeps into account the criteria applied in collective dismissals, that is to say, the presence of dependent family members and seniority.

With its judgement no. 21569 dated 3 September 2018, the Court of Cassation ruled on the consequences of disciplinary dismissal after expiry of the term set out in the Collective Bargaining Agreement. The ruling originated from the appeal brought by a worker against the dismissal enforced after expiry of the terms set out in the National Collective Bargaining Agreement for the Gas and Water Industry, due to the justifications rendered with regard to the conduct in question. More specifically, the court of appeal had granted to the worker only the indemnification safeguard, excluding that the non-observance of the terms set out in the National Collective Bargaining Agreement could imply the annulment of dismissal, thus resulting in the right to be reinstated in the position. Accepting the worker’s appeal, the Court of Cassation quashed the judgment of the court of appeal deeming that the violation of the rule relating to the term for the adoption of a disciplinary measure implies acceptance of the justifications and, consequently, the applicability of the actual protection set out in Article 18 (4), Workers’ Statute, resulting in the reinstatement of the worker concerned. Specifically, the judges of the Court of Cassation remarked that ‹‹on the basis of the provisions set out in Article 21/2 (3) National Collective Bargaining Agreement for the Gas and Water Industry, it does not seem possible to assume any consequences other than the obligation to proceed to the indicated specific activity within the set term and the fictio of the acceptance of the justifications in the event of non-fulfilment of the aforementioned obligation››. Therefore, according to the Court of Cassation, the dismissal ‹‹must be considered not only ineffective for the non-observance of a procedural term but also unlawful for the inexistence of the conduct complained – as the employer had accepted the justifications in excuse of the worker – and therefore for a total lack of an essential element of just cause. The logical/legal reasoning made by the Court of Cassation seems to stir up the debate on the relevance of procedural terms when dealing with sanctions. This is an interpretative doubt that in fact may have particularly different consequences – to be evaluated on the basis of the applicable contractual provision (which may also not provide for the automatic effect of the acceptance of justifications after expiry of the applicable term) – and result in different protection schemes.

With its judgement no. 20761/18, the Court of Cassation, Labour Division, returned to rule on dismissal for exceeding the sickness period, confirming its opinion on the potential formal faults that may affect its validity. The ruling originated from the appeal brought by a worker against his dismissal for exceeding the sickness period, whose lawfulness had already been upheld by the courts of the previous two degrees. One of reasons at the basis of the appeal is that the worker had complained about the false application of the applicable rules, as the employer had failed to notify the employee of the imminent expiry of the sickness period. According to the employee, such failure resulted in the impossibility for him to exercise the right – guaranteed by the national collective bargaining agreement – to request a period of unpaid leave on expiry of such term. The Court of Cassation confirmed the lawfulness of the dismissal, clarifying and reiterating that there is no obligation from the employer’s part to notify the employee of the imminent expiry of the maximum sickness absence days, and that such a burden would not exist extensively, not even on the basis of the principles of correctness and good faith. In fact, the Court noted how such notification “would be used in truth to allow the employee to implement certain actions such as request for paid vacation or leave, essentially by-passing the verification of its unsuitability to carry out his obligations”, the latter being sufficient to exclude such information obligation. The Court of Cassation therefore took this opportunity to reiterate its orientation also in relation to other profiles pertaining to this type of dismissal. In fact, on one hand, the Court of Cassation remarked that Sundays and holidays, not covered by a medical certificate, although included between separate sickness periods, should be included in the calculation of the sickness period, unless proof is given of the actual interruption of the sickness in those days. On the other hand, the Court of Cassation noted that the obligation to communicate the reasons at the time of the dismissal for exceeding the sickness period does not require the indication of each separate leave, as it is sufficient – as happened in the case at hand – to indicate the full duration of the leaves. A dismissal for exceeding the sickness period is not equivalent to a dismissal for cause and, therefore, it is improper to speak of a confutation of leaves in this case. In the opinion of the Court of Cassation, the employer can indicate the total number of absence days occurred over a given period of time, without prejudice to the obligation for the employer, in case of legal proceedings, to submit and substantiate the elements that brought to the employer’s decision.

With its recent judgement no. 21965 dated 10 September 2018, the Court of Cassation once again ruled on the well-known controversial issue of the boundaries between the right to criticize and insubordination, upholding the decision of the trial court. The judgement at hand found the dismissal imposed on an employee, who had uttered words deemed libellous by the employer, unlawful. More specifically, the employee – at the time of the events, a trade union representative – had been caught transmitting – via a Facebook chat – lines with a libellous, critical and offensive content regarding the director of his employing company, calling him slave-trader. The Court of Cassation, called to rule on the matter, established that in the case at hand the prerequisites for libel did not exist, because the worker had uttered those words on a private chat, the access to which was allowed only to the members of the trade union to which he belonged. On this point, the Court of Cassation clarified that the digital venue where this action had been committed must be considered a “private digital place of debate and sharing of opinions”: hence, a reserved and safe place which, as such, determines for those who are part of it a set of rights, including the right to privacy and freedom to exchange correspondence. In support of its stance, the Court of Cassation remarked that (i) Article 15 of the Workers’ Statute considers “freedom and the right to correspondence and any other form of communication” inviolable, as secrecy should be intended as the expression of the broadest freedom to communicate with predetermined subjects, and therefore as assumption that subjects other than the selected recipients do not illegitimately get to know the content of a communication and (ii) the protection of secrecy implies, in addition to the choice of the recipients and the sender’s intention to exclude other persons from knowing the message, also the use of a tool that embodies the quality of secrecy or confidentiality of the communication. Moreover, the Court, making reference to one of its previous rulings, reiterated that the right protected under Article 15 of the Italian Constitution “includes correspondence and the other forms of communication, including telephone, electronic, computer-aided communications between those present or those effected by other means provided by the ever-improving technologies.” Therefore, the need to protect the secrecy of communications also includes e-mail messages exchanged by mailing lists reserved to the members of a given group of people, newsgroups or private chat lines, whose access is conditional upon a password given to specific subjects. Lastly, the Court of Cassation specified that legitimizing dismissal for the reasons brought to its attention would be tantamount to legitimizing the control of the employer over the freedom to criticize, as well as, considering the circumstances, a violation of the trade union’s freedom, which in this way would be necessarily and inevitably demeaned. In consideration of all of the above, the Court of Cassation ordered reinstatement of the worker in his former job and payment of damage.