The Court of Rome, in its ruling no. 3605 of 19 April, 2021, ruled on the application of the dismissal prohibition, provided for by art. 46 of the “Cure Italy” decree and confirmed by the emergency measures that followed, to executives. Contrary to the conclusions reached on 26 February, the Court ruled that “the literal wording of the regulation, together with the philosophy that supports it, did not allow executives to be included in the prohibition.”
To deal with a crisis, worsened by the consequences of the pandemic, a company, with a notice dated 29 April 2020, dismissed its Chief Operating Officer due to the position removal and redistribution of the functions assigned to him among other company managers.
The executive challenged the termination by objecting to its nullity due to violation of art. 46 of Decree Law 18/2020 (“Cure Italy Decree”) on the assumption that the prohibition of individual dismissal introduced by the emergency legislation should apply to executives and the dismissal illegitimacy.
In rejecting the appeal brought by the executive, the Court of Rome preliminarily noted that art. 46 of the “Cure Italy” Decree – and the subsequent emergency measures that extended the dismissal prohibition – expressly excluded the possibility of ordering dismissals for justified objective reasons under art. 3 of Italian Law no. 604/66)
However, based on the literal content of the regulation and the assumption that art. 3 of Law 604/66 does not apply to executives, based on the express provisions of the legislation (art. 10 L. 604/66) and by constant case-law orientation, the Court ruled out that executives can be included in the dismissal prohibition.
The Court found the “clear and evident symmetry” between the dismissal prohibition and the use of social shock absorbers, which has allowed companies to reduce labour costs in a generalised manner to cope with losses. This symmetry is confirmed by the possibility for employers to revoke dismissals already announced before the prohibition, introduced by art. 46 of the “Cure Italy” Decree in paragraph 1-bis. This applies if a request to access the redundancy fund was made simultaneously.
According to the Court, the combination “dismissal prohibition” and “use of social shock absorbers” cannot be applied to executives, as they cannot benefit from social shock absorbers while in office. An interpretation that would allow the inclusion of executives in the dismissal prohibition would be unconstitutional. It would leave the employer responsible for the costs of the managerial employment relationship even in the presence of a justified termination.
The Court held that it could not come to a different conclusion, not even because of the order from the same Court dated 26 February 2021. Under this order the prohibition would apply to executives because “according to a ‘constitutionally oriented interpretation’ the exclusion of executives from the prohibition is unclear, given the regulation is supposed to prevent general dismissal without any distinction.”
With this ruling, the Court disagreed with the reasoning contained in the 26 February order. Under this order, it would be unreasonable not to include executives in the prohibition because they are protected by the rules of collective dismissal. With this ruling, the Court declared the cases were different. This justifies a difference in approach and it cannot be a valid reason to apply the dismissal prohibition to the individual executive.
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The logical-juridical process that led the Court to exclude the extension of the dismissal prohibition to management personnel can be shared since it follows legal provisions and the entire emergency regulatory system’s reason.
However, the case law on the interpretation of the same regulatory source provided diametrically opposed solutions, resulting in uncertainty for companies about the outcomes and costs of any dismissal of senior figures.
Other related insights:
Art. 6 of Italian Law no. 604/1966 states that:
That said, Article 83, paragraph 2 of the Cura Italia Decree, and Article 36, paragraph 1 of the Liquidity Decree, laid down, among the measures to combat the health emergency due to the spread of the COVID-19 virus, the “extraordinary” suspension of procedural terms from 9 March 2020 until the following 11 May.
In relation to appealing a dismissal, the Court of Milan, with measure dated 14 October 2020 no. 5145, stated that the suspension of the terms in question does not apply only to the term of 180 days relating to the judicial appeal of the dismissal but also to the forfeiture period of 60 days relating to its extrajudicial appeal.
In the Court’s opinion, a restrictive interpretation would contrast with the unitary nature of the two terms of appeal and with the “rationale of the urgent decree to limit the negative consequences of the pandemic also for the jurisdictional protection of rights”.
From another profile, the Courts of Rome and Palermo recently focused on the appeal of the dismissal, sent by certified email as an annex – scan of the original – and thus an image copy not containing the authentic signature of the interested party.
The Court of Rome, with its ruling dated 20 October 2020, no. 86577, declared that the dismissal may be appealed, indifferently, both (i) by attaching to the certified email an electronic document (known as “digital native document”) and (ii) by sending the scan of the paper document signed by the lawyer and by the interested party, even if not having any digital signature.
The Court of Palermo took a different stance, with its ruling dated 28 October 2020, no. 30615, declaring ineffective the appeal of the dismissal sent by the employee’s lawyer to the employer, by certified email, if it is not accompanied by the digital signature or by a certification of conformity of the documents.
It is hoped that the case law contrast that has now come to light on the issue will soon be resolved by a decision of the Supreme Court or by a regulatory change.
Establishing, in fact, whether or not the appeal as an image copy is effective is crucial in deciding if the document thus produced has the value of a document interrupting the limitation period indicated in Art. 6 of Italian Law no. 604/1966.
Other insights related:
INPS, with its circular letter no. 45 of 25 March 2020, provided operating instructions regarding the use of parental leave for the COVID-19 emergency and increase of leaves as per the law no. 104 of 5 February 1992 both included in Decree Law no. 18 of 17 March 2020.
Reference normative framework
The circular letter in question concerns the special measures introduced by articles 23 and 24 of the Decree Law 18 of last 17 March (so-called “Decreto Cura Italia”, hereinafter “Decree”), aimed at making it easier for families and workers to handle the epidemic emergency in progress.
Specifically, article 23 of the Decree introduces an extraordinary parental leave to take care of minors during the period when pre-school educational services and scholastic activities of all schools are suspended ordered by the Presidential Decree of 4 March 2020.
The leave, for a total of 15 days, can be used by workers employed in the private sector, workers enrolled in the INPS “Gestione Separata” pension scheme, self-employed workers registered with INPS and employees of the public sector. Alternatively to the aforesaid leave, parents with children not over age 12 have been given the possibility to use a bonus of 600 euro to purchase baby-sitting services.
Instead, article 24 of the Decree, includes an increase in the number of days of paid leave as per law no. 104 of 5 February 1992 for an additional 12 days which can be used in the months of March and April 2020.
These measures are also applicable for adoptive and foster parents or those who have minors in temporary placements.
Period to use leave and relative indemnity
The Institute with the circular letter in question, set out the operating procedures for being able to use the leave, specifying, at the same time that parents employed in the public sector must follow the instructions provided with the Public Administration where they are employed.
As mentioned, use of the extraordinary parental leave, may occur for a continuous or fractioned period, however not longer than a total of 15 days starting from 5 March 2020 is alternatively granted to just one of the parents for family. This requires, for this benefit, that no parent benefits from wage support instruments provided in the event of suspension or termination of work or another parent unemployed or not working.
Operating procedures for using the leave
The new COVID-19 leave guarantees greater protections compared to those that the parents can benefit from for care of their children using ordinary parental leave. Specifically, the new parental leave grants parents with children not older than 12 an indemnity equal to 50% of their wages, calculated as stated by article 23 of the Legislative Decree no. 151 of 26 March 2001. INPS specifies that (i) calculation of the days and payment of the indemnity occurs with the same procedures envisaged for payment of parental leave and (ii) the protection is granted even if the individual couple limits have been reached included in the specific laws on parental leave.
Instead, parents with children between ages 12 and 16, despite being granted leave, i.e. the right to be absent from work for the period educational services and schools are closed, is not granted payment of any indemnity.
Those who intend to use the leave must:
Greater protections are also provided for parents enrolled in “Gestione Separata” compared to ordinary parental leave. The COVID-19 leave guarantees parents with children not over age 12 an indemnity equal to 50% of 1/365 of their income, identified according to the calculation basis used for determining maternity leave.
Similarly also for self-employed workers registered with INPS the protection is expanded from an indemnity of 30% of pay provided only in the case of children up to age 1, to an indemnity totaling 50% of daily conventional pay established annually by law, based on the type of self-employment carried out, for worker parents with children up to age 12.
The Decree also includes an alternative benefit for subjects who receive the above leave who may request a bonus for baby-sitting services up to a maximum amount of 600 euro which, can reach 1,000 euro for workers in the healthcare, defense and security sector.
INPS, with its circular letter no. 44 of 24 March 2020 provided the operating instructions to be able to request this bonus, specifying that parents with children not over age 12 may benefit, but also those who at the time the application is submitted have already turned 12, as long as by the date of 5 March they were within the required age limit.
This age limit does not apply for children with disabilities in verified serious situations, enrolled with schools of all levels or those at day centers for the disabled.
The Institute, reiterating the contents of the Decree, clarified that the benefit is due as long as the family does not have another parent who is the beneficiary of income support instruments in the event of suspension or termination of their work (for example, NASPI, CIGO, unemployment benefits, etc.) or another parent who is unemployed or not working, with whom an incompatibility exists and ban on accumulation.
Extension of paid leaves as per law no. 104/1992
Article 24 of the Decree, as anticipated, includes an increase in the number of days of paid leave as per the law no. 104/92. Therefore, subjects who have the right to the leaves in question may use, in addition to the three days per month already guaranteed by the aforesaid law, another 12 working days to use in the months of March and April.
INPS specified that the 12 days can also be used consecutively during one month or broken down into hours.
Moreover, the possibility of accumulating various leaves for the same worker is confirmed. Therefore, if the worker cares for more than one disabled person, he/she can accumulate for the months of March and April 2020 another 12 days per dependent disabled person, in addition to the ordinary monthly leave of 3 days.
Article 46 of the Cura Italia Decree, containing urgent measures to contrast the COVID 19 emergency states that “beginning from the date the degree goes into effect starting any proceedings as per articles 4, 5 and 24 of Italian Law no. 223 of 23 July 1991 is prohibited for 60 days and pending proceedings started after 23 February 2020 in the same period shall be suspended. Until this period ends, the employer, regardless of the number of employees, may not withdraw from an employment contract for objective just cause pursuant to article 3 of Italian Law no. 604 of 15 July 1966”. Therefore, from 17 March 2020 until 16 May 2020 there is a ban on starting employee layoff proceedings and pending proceedings started after 23 February 2020 are suspended during the same time period. Moreover, until 16 May 2020, employers, regardless of the number of employees on the job, may not give notices of dismissal for objective just cause. Instead, employers can proceed with dismissal for just cause, dismissal for subjective just cause, withdrawal from a trainee contract at the end of the training period, withdrawal during probation period, dismissal for retirement based on the “Quota 100” law and old age pension, dismissal for exceeding the protection period and being unsuitable for the assigned job and dismissal of managers.
Among the measures that have come one after another in these weeks, this is the right time to make some remarks in light of the novelties introduced with Italian Legislative Decree no. 18/2020 “Cura Italia”, effective as of 17 March 2020.
First of all, it should be noted that in terms of social safety nets, the redundancy scheme included in our legal system is certainly one of the most favorable if compared with the main western countries and therefore a special law should not be necessary except to offer coverage to companies excluded from its benefits at present.
In terms of these companies, it has become very clear that the logic followed by the 2014 legislation (Law no. 183/14) for the reform of social safety nets basically focused on the desire to take into “account the special natures of various manufacturing sectors”, appears less and less adequate with the need to provide companies with uniform instruments able to offer solutions and coverage for systemic problems like the one generated by the most famous virus at present.
That said, we know that the Cura Italia Decree introduces extraordinary provisions for access to social safety nets for companies forced to reduce or suspend work due to the COVID-19 emergency.
The aforesaid Decree – among the multitude of included interventions – on one hand introduces an exception to the redundancy scheme and on the other provides the possibility of easy access to the ordinary redundancy scheme and wage integration fund.
Basically, the use of the ordinary redundancy scheme and wage integration fund has been simplified, since a “fast track” welfare consultation needs to be performed, upon request of trade union organizations within 3 (three) days.
This introduced consultation represents something brand new, not just due to the short, record-breaking deadline, but also due to the innovative “electronic” procedures which the same urgent law allows and includes.
We confirm that the solutions proposed by the current government to make the intervention of social safety nets more effective and resolutive, and believe that – once the emergency period is over – the law wants to introduce universal type social safety nets, i.e. applicable to all workers, regardless of their sector, just like it did with unemployment benefits (so-called NASPI) in 2015.
