In judgment no. 32412 of 22 November 2023, the Italian Court of Cassation dealt with the lawfulness of a dismissal by the formal employer of a worker employed under a sham outsourcing contract.
A worker brought legal proceedings to obtain a declaration of the existence of an employment relationship with the principal company, and that, consequently his dismissal was ineffective because it was ordered by the contractor and not by the ‘actual’ employer. The worker also sought reinstatement. The Italian Court of Cassation, hearing the case, first affirmed that the worker was not precluded from bringing legal proceedings for a declaration of the existence of a sham intermediary and to obtain the recognition of an employment relationship with the principal including in the event of dismissal by the contractor. The Italian Court of Cassation also established that in the case of a sham intermediary, the power to dismiss must in any case be exercised by the actual employer and not by the sham one, under penalty of ineffectiveness of the dismissal; the actual employer, in fact, cannot rely on the contractor’s dismissal as an act affecting management of the relationship.
On Wednesday 24 April 2024, MEPs adopted the text of the new Directive on the working conditions of platform workers. As can be learned from the press release published on the Parliament’s institutional website, the Directive “aim[s] to ensure that platform workers have their employment status classified correctly and to correct bogus self-employment”by introducing “a presumption of an employment relationship (as opposed to self-employment) that is triggered when facts indicating control and direction are present, according to national law and collective agreements […]”.
Among the initiatives introduced by the Directive, as far as is of interest here, there are limitations on the processing of personal data carried out by means of automated monitoring or decision-making or systems. For example, the following may not be subject to any processing operation: (i) data on the emotional or psychological state of the person performing platform work; (ii) personal data in relation to private conversations; (iii) data belonging to the category of special data (former sensitive data) or biometric data or, again, (iv) the data of the worker who carries out activities through a digital platform may not be collected when he or she is not carrying out his or her activity through the platform itself.
These provisions will apply from the start of the recruitment and selection procedures and for the entire duration of the relationship. It is understood that, given the type of processing and the high risk to the rights and freedoms of natural persons, processing of personal data by a digital work platform will be subject to specific impact assessments under Article 35 of Regulation (EU) 2016/679. The impact assessments carried out by the employer will then have to be shared with the workers’ representatives.
Another key element is the transparency obligations. Persons who perform work through digital platforms will have to be promptly made aware, in a transparent, intelligible and easily accessible form using clear and plain language, about the categories of decisions that are taken or supported or by automated decision-making or monitoring systems. The Italian national legal system is already familiar with this aspect following the introduction of the provisions of Regulation (EU) 2016/679 and the adoption of the so-called “Transparency Decree”.
Finally, it is understood that Member States will have to ensure that digital work platforms guarantee sufficient human resources to effectively monitor and assess the impact of individual decisions taken or supported by automated decision-making or monitoring systems.
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Next steps
The text approved by the European Parliament will now also have to be formally adopted by the Council and then published in the Official Journal of the European Union. After publication, each Member State will have two years to incorporate the new provisions into its national law.
Other related insights:
By order no. 10734 of 22 April 2024, the Italian Court of Cassation ruled that, in the event of a failed conciliation attempt, as required under Article 7 of Italian Law no. 604/1966 in the case of dismissal for justified objective reasons of workers hired before March 2015, the employer is not required to send the employee notice of dismissal, as the indication of the intention to interrupt the relationship contained in the minutes drawn up before the Local Employment Inspectorate (Ispettorato Territoriale del Lavoro, ‘ITL’) is sufficient.
As a result of the conciliation attempt held before the ITL under Article 7 of Italian Law no. 604/1966, the minutes of failure to conciliate were drawn up, in which the employer’s intention to proceed with the dismissal of the employee for justified objective reasons was formally stated.
Subsequently, the worker challenged her dismissal, objecting, in the first place, that it was ineffective because it was not in writing.
As part of the so-called ‘summary phase’ of the Fornero Proceedings, as well as in the subsequent opposition phase, the Judge found that the dismissal had not been in writing, with a consequent order against the employer to reinstate the employee.
The employer appealed to the Italian Court of Appeal which overturned the judgment handed down in the context of the opposition phase.
The Italian Court of Appeal ruled, on the one hand, that there had been written notice of dismissal because the intention to terminate the employment relationship was contained in the minutes signed by both parties at the end of the procedure under Article 7 of Italian Law no. 604/1966. However, the Court also held, on the other hand, that as the principle of fairness and good faith had been breached with respect to the choice of the worker to be dismissed, the dismissal was unlawful and made an order against the employer under the provisions of Article 18, paragraph 7, of the Italian Workers’ Charter.
The employee appealed against the judgment before the Italian Court of Cassation and the company, as well as submitting a defence lodged, in turn, a cross-appeal.
The Italian Court of Cassation – in upholding the second instance judgment – noted, first of all, that the purpose of a written notice of dismissal lies in the need to make the employee aware of the action interrupting the relationship.
This function – the Court continued – is fulfilled if the intention to proceed with the termination is formally stated by the employer, in an institutional setting (such as the ITL where the conciliation attempt under Article 7 of Italian Law no. 604/1966 is held), in minutes that are also signed by the employee.
The legislative wording of Article 7, paragraph 6, third sentence of Italian Law no. 604/1966 (“If the conciliation attempt fails and, in any case, the deadline referred to in paragraph 3 has elapsed, the employer may give notice of the dismissal to the worker”) outlines a legal condition (precedent) and a term (dilatory). For this reason, once the first has been fulfilled or the second has expired, the employer “may give the employee notice of the dismissal”.
With regard to the meaning to be attributed to the legal condition precedent (i.e., the failure of the conciliation attempt), according to the Italian Court of Cassation “the literal reading” suggests that the legislator “has given importance to the objective failure of the conciliation attempt rather than to the chronological and formal date of the finalisation of the minutes drawn up in the local conciliation commission”.
Moreover, the Court continues, “the wording of the provision does not require that the notice of dismissal which may be given by employer ‘if the conciliation attempt fails’, must take place in a different context and subsequent to that of the aforementioned minutes”.
In this sense, the Court argues, “nothing to protect the interests of the worker could plausibly justify the assumption that the notice of dismissal to the worker must necessarily take place in a context distinct from the minutes drawn up at the meeting before the appropriate commission, provided of course that the notice of dismissal already stated in that forum complies with the additional provisions on dismissal, starting with that of the [notice being] in writing under Article 2, paragraph 1 of Italian Law no. 604/1966”.
According to the Italian Court of Cassation judges, it follows that, where the conciliation attempt under Article 7 of Italian Law no. 604/1966 fails and the employer confirms his or her intention to terminate the relationship, there is no need to subsequently send the employee a letter of dismissal.
On these grounds, the Italian Court of Cassation therefore rejected the appeal brought by the worker, confirming that she was only entitled to compensation and not reinstatement.
Other related insights:
A non-compete agreement which is conditional upon the preservation of the original duties introduces an element of vagueness that undermines the entire agreement.
This principle was confirmed by the Italian Court of Cassation in order no. 10679 of 19 April 2024. In this case, the non-compete agreement provided that if the employee’s duties changed during the term of the relationship, the employee would be free from the non-compete obligation 12 months from the new duties. Moreover, the agreement provided that the geographical area subject to the non-compete agreement related to the Veneto region and to a further area that the company reserved the right to define on termination of the relationship.
In light of the above, it follows that the content of the non-compete agreement must be determined in advance and any clauses that result in its vagueness (such as the modification of the duties or of the geographical area) result in its nullity.
Other related insights:
An employee dismissed for drug trafficking has been reinstated and compensated. The drug related conviction occurred in the past and pre-dated the employment, when the company took over the staff from the outgoing company after taking over a contract held under a public administration tender. The Italian Court of Cassation, employment division, by order no. 8899 of 4 April 2024 held that the material fact existed but that this did not give rise to a legal ground: an old conviction has no disciplinary relevance where the employer does not prove “the relevance of the old facts on the relationship’s operation”. A criminal judgment that becomes final during the relationship, onthe other hand, may trigger the employer’s withdrawal for just cause if the relationship of mutual trust with the company fails.
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