By judgment No. 18168 of 26 June 2023, the Italian Court of Cassation once again addressed the issue of the limits of employer controls via the use of IT tools, establishing the unlawfulness of dismissal and the non-usability of evidence gathered following a check on an employee’s company e-mail carried out by the employer company in breach of, inter alia, the provisions on the protection of personal data.
The facts of the case
The procedural case stems from a disciplinary measure against a worker for ‘insubordinate conduct and breach of the duties of diligence and loyalty as well as of the general principles of fairness and good faith’ because, among other things, he had had dealings with competitors.
The evidence relating to the alleged facts had been collected following an indiscriminate investigation carried out by the company into the company email assigned to the worker.
The Court of Appeal, in upholding the first instance ruling, found that the dismissal was unlawful and ordered the company to pay sums in lieu of notice supplementary indemnity, and as amounts due as severance pay (TFR)
The unsuccessful company thus appealed to the Italian Court of Cassation.
‘Defensive controls’
On this occasion, the Court of Cassation once again returned to the issue of so-called ‘defensive controls’, reaffirming the distinction between a. ‘controls in defence of the company’s assets’ and b. ‘defensive controls in the strict sense’.
a. The ‘controls in defence of company assets’
The ‘controls in defence of company assets’ concern all employees (or groups of employees) who in carrying out their work are in contact with company assets and must necessarily be carried out in compliance with, and within the limits of, the provisions of Article 4 of the Italian Workers’ Statute (Italian Law No. 300/70).
b. ‘Defensive controls in the strict sense’
The ‘defensive controls in the strict sense’, on the other hand, are aimed at ascertaining specific unlawful conduct attributable, on the basis of specific indications, to individual workers and ‘remain, even today, outside the scope of application of Article 4’; these controls must be targeted and implemented ex post, prompted, therefore, by episodes that have already occurred ‘because only from that point onwards the employer can collect usable information’.
The decision of the Italian Court of Cassation
Returning to the present case, the Court of Appeal found that the company:
Since it is not possible ‘to remove the worker’s relationship with his employer from the general rules on the protection of personal data’, the Italian Court of Cassation itself – which refers to the founding principles of the matter including (i) the principles of minimisation and proportionality (ii) the principles of relevance and non-excessiveness with respect to a lawful purpose as well as (iii) the principles of transparency and fairness – clarifies that even in the context of a ‘defensive control in the strict sense’ it is necessary to ensure ‘a correct balance between the employer’s needs to protect the company’s assets and property and the indispensable protection of the worker’s dignity and confidentiality’.
For all these reasons, the Court concludes, the second instance judges correctly assessed the balance between the conduct engaged in by the company and the resulting level of intrusion into the worker’s private life.
The Italian Court of Cassation rejected the appeal, finding against the appellant company and upholding the unlawfulness of the dismissal as well as the unusability of the unlawfully acquired data.
The Italian Court of Cassation indicated the elements useful for guiding the Italian judge’s balancing act in cases of ‘defensive checks in the strict sense’:
By referring to the case law of the European Court of Human Rights (specifically, the case Barbulescu v. Romania, 5 September 2017), the Italian Court of Cassation indicated the elements useful for guiding the Italian judge’s balancing act in cases of ‘defensive checks in the strict sense’:
Other related insights:
The Italian Court of Cassation in its very recent judgment No. 20239 of 14 July 2023 ruled on the issue of an employer’s withdrawal ad nutum that was given on the basis of a trial period agreement, which was declared null and void, stating that, where the dismissal does not fall under any of the cases referred to in Article 3(2) of Italian Legislative Decree 23/2015, the only protection applicable to the employee is indemnity.
The facts of the case
The case involved the dismissal of an employee for unsuccessful outcome of the trial period. The relevant employment contract had been entered into on 3 August 2015 with effect from the following September and with consequent application of the regulations on dismissals set out in Italian Legislative Decree 23/2015 (the so-called Jobs Act).
In the context of the proceedings on the merits, it was found that the trial period agreement set out by the contract was null and void for the failure to indicate the specific duties to which the employee would be assigned, and the professional profile assigned to her.
With reference to the consequent penalties, both the Court and the Court of Appeal had ruled that the consequences of the unlawful termination by the employer on the basis of a null and void trial period agreement did not fall within the scope of the circumstances governed by Article 3(2) of Italian Legislative Decree No. 23 of 2015, entailing the application of the effective protection, but regulated by Article 3(1) of the aforementioned decree, with the application, therefore, only of the so-called indemnity protection, in practice set at four months’ pay of the actual overall pay.
The application to the Italian Court of Cassation and the Court’s ruling
The employee lodged an application with the Italian Court of Cassation against the decision of the Court of Appeal, and put forward a number of grounds for contesting the ruling on appeal.
Indeed, the employee argued, firstly, that due to the lack of a valid and effective trial period agreement, the dismissal given for unsuccessful outcome of the trial period should have been declared null and void, with the consequent application of full reinstatement protection, pursuant to Article 2 of Italian Legislative Decree 23/2015.
In the alternative, the employee criticised the judgment on the ground that the Court of Appeal had held that the protection under Article 3(1) of Italian Legislative Decree 23/2015 was to be applied instead of the reduced reintegration protection, pursuant to the second paragraph of Article 3 of the aforementioned provision.
The Italian Court of Cassation rejected the employee’s plea on the basis of several findings.
The Court first observed that the nullity of the clause of the trial period agreement, given that it was partial, does not extend its effects to the entire contract, but pertains to the final employment from the outset, in accordance with Article 1419, paragraph 2, of the Italian Civil Code.
It follows from this, on the one hand, that the regime of free withdrawal no longer applies and, on the other hand, that the employer’s termination must be equated with an ordinary dismissal subject to judicial examination as to whether there is just cause or justified reason.
Thus, continues the Court, in the system introduced by Italian Legislative Decree 23/2015, the specific case cannot be traced back to the scope of the invalidity of the termination governed by Article 2 of the aforementioned decree, this rule being only applicable ‘to the case of discriminatory dismissal and the other cases of nullity expressly provided for by law’.
Having ruled out the application of Article 2, the Court consequently examined Article 3 of the so-called Jobs Act in order to verify the protection applicable to the case at hand.
The Italian Court of Cassation noted how, in the regulatory framework of the Jobs Act legislator, reinstatement protection is merely residual in nature, being applicable only to cases of dismissal for justified subjective reason or for just cause in which the lack of the material dispute of fact contested against the employee is proven in court (Article 3(2), Italian Legislative Decree 23/2015).
It follows – the Italian Court of Cassation continues, that the withdrawal ad nutum given without a valid trial period agreement, since it does not fall under any of the specific cases referred to in the second paragraph above, is to be considered to be subject to the general rule of indemnity protection under Article 2(1) of Italian Legislative Decree 23/2015.
Other related insights:
By judgment No. 429 of 27 April 2023, the Court of Turin established that resignation for just cause giving entitlement to the unemployment allowance ‘Naspi’ does not require the worker to prove that the transfer was unjustified if the new place of work is more than 50 km away from his/her residence.
The case stemmed from the resignation for just cause submitted by the worker in connection with the transfer of her place of employment from Turin to Trieste. In particular, the resignation was due, as indicated in the notice of resignation, to the refusal to ‘move to another location more than 80 km away from her residence’.
The request to access Naspi following the resignation following the transfer was rejected by National Social Security Entity (INPS, Istituto Nazionale della Previdenza Sociale). INPS, by citing message No. 369/2018, noted that, in such a case, in order to be eligible for the Napsi allowance, the employee must prove the just cause of the resignation and, therefore, that the transfer was not supported by technical, organisational and production reasons.
In upholding the worker’s appeal, the Court of Turin disregarded INPS’s practice also in light of the reference legislation, i.e. Italian Legislative Decree No. 22/2015.
In fact, in the Court’s view, the fundamental requirement for access to the Naspi treatment (in addition to employment and contributions) is the involuntary loss of employment. According to the judges, in order to assess whether the worker has ‘involuntarily lost his/her job’, it is necessary to ascertain whether the decision to resign is the result of a spontaneous and voluntary decision by the worker or induced by significant changes in working conditions resulting from the transfer to another location imposed by the employer.
According to INPS, this requirement is deemed to be met when there is a mutual termination of the employment relationship resulting from the worker’s refusal to transfer to another office of the same company that is more than 50 km away from the worker’s residence or can be reached on average in more than 80 minutes by public transport. On the other hand, a resignation that the worker claims took place for just cause following a transfer to another company location is eligible for the Naspi allowance, provided that the transfer is not supported by ‘proven technical, organisational and production reasons’ provided for in Article 2103 of the Italian Civil Code. Therefore, in the event of resignation, the worker will be able to access the Naspi only if he accompanies the relevant application with documentation (such as a declaration in lieu of affidavit pursuant to Articles 38 and 47 of Italian Presidential Decree No. 445/2000) showing at least his/her willingness to defend himself in court against the employer’s unlawful conduct (enclosing letters of summons, claims, complaints, writs of summons, urgent applications pursuant to Article 700 of the Italian Code of Civil Procedure, as well as any other suitable document), undertaking to notify the outcome of the judicial or out-of-court dispute.
Based on the foregoing, therefore, the lower court judge found that the same institution, in guaranteeing the Naspi treatment in the case of mutual termination, implicitly confirms that the transfer to another location 50 km away from the usual location or within 80 minutes by public transport entails a significant change in working conditions.
Therefore, the worker’s decision to resign after having undergone a transfer of that nature, irrespective of the lawfulness or otherwise of the employer’s organisational choice, must be considered to be an involuntary choice of the worker that led to the decision to resign and, therefore, entailed an ‘involuntary loss’ of employment.
Other related insights:
With the recent judgment No. 20284 of 14 July 2023, the Italian Court of Cassation ruled that, even though not specifically provided for in the disciplinary code, breaches by the employee of the fundamental duties underlying the employment relationship are valid grounds for dismissal.
The facts of the case
An employee working as a Level I salesperson was dismissed by the employer company due to his constant failure to meet the production targets periodically set by the company.
The employee challenged the dismissal before the Court, which – by comparing the results achieved by the employee with the targets set by the company schedules – confirmed the unequivocal poor production performance of the worker. Therefore, the Judge hearing the case declared the dismissal to be lawful, classifying it as dismissal for a justified subjective reason.
The worker appealed the ruling before the Rome Court of Appeal, where he argued that the dismissal was unlawful due to the failure to display the disciplinary code in the company.
In this regard, the Court, in upholding the judgment of first instance, held that the failure to display the disciplinary code in the company was irrelevant for the purposes of determining the nature of the dismissal, since the worker was charged with negligent and inexperienced failure to fulfil his obligations under the employment contract, and that the dismissal was based on the worker’s poor production performance resulting from his constant failure to comply with the work schedules previously established.
For the Court, moreover, for the purposes of assessing the seriousness of the misconduct, previous disciplinary records that indicate the worker’s repeated offences must also be taken into account.
The worker therefore challenged the judgment of the Court of Appeal before the Italian Court of Cassation.
The decision of the Italian Court of Cassation
When confronted with the issue, the Italian Court of Cassation confirmed the rulings of the lower courts on the lawfulness of the dismissal.
First of all, the Judges of the Italian Court of Cassation reiterate that the power to terminate the employment contract in the event of significant breach of contractual obligations stems directly from the law (Article 3 of Italian Law No. 604 of 1966) and does not require, in order for it to be lawfully exercised, a detailed provision, in the collective bargaining agreement or in the company disciplinary regulations, of every possible instance of conduct constituting the above requirement. Indeed, it is for the judge to verify, if the lawfulness of the termination is contested, whether the alleged incidents constitute a legal case of non-performance.
For this reason, continues the Court, even if not specifically provided for by the contractual provisions, serious breaches of the fundamental duties associated with the employment relationship constitute grounds for valid notice of withdrawal; in particular, those duties that underpin the existence of the employment relationship, such as the duties imposed by Articles 2104 and 2105 of the Italian Civil Code (obligations of diligence and loyalty) as well as those deriving from company policies.
Therefore, according to the Italian Court of Cassation, with regard to disciplinary sanctions, a distinction must be made between offences relating to the breach of specific rules concerning company organisation and production methods, which can only be recognised insofar as they are expressly provided for, and offences relating to conduct that is manifestly contrary to the duties of workers and the interests of the company, for which specific inclusion in the disciplinary code is not required.
With regard to the disciplinary code, the judges reiterate that it must, in any event, be drafted in such a manner as to make the cases of infringement clear, although by providing an outline and not a detailed description, and to indicate the corresponding penalties, albeit in a general manner and which can be adapted based on the actual and specific non-compliance.
Ultimately, therefore, the aforementioned judgments uphold the lawfulness of the employer’s termination of employment even where the alleged breach of contract does not constitute a case that is expressly set out in the company’s disciplinary code or in the national collective bargaining agreement, but takes place by infringing the duties underlying the employment relationship.
Other related insights:
Failure to comply with the time limits laid down in the Italian national collective bargaining agreement for the notice of the letter of dismissal constitutes a procedural breach resulting in the application of the indemnification penalty under Article 18(6).
The Italian Court of Cassation, with the recent judgment No. 10802 of 21 April 2023, once again ruled on the timeliness of the notice of dismissal, and analysed, on the one hand, the prerequisites for the application of the principle of the separation between the time when the intention to dismiss is expressed and the time when the effects are produced and, on the other hand, the consequences of the penalties associated with the failure to comply with the time limits for the conclusion of the disciplinary proceedings provided for by the national collective bargaining agreement.
The timeliness of the notice of the dismissal
As is known, the law does not specify a precise time limit within which the employer, at the end of the disciplinary procedure, must inform the employee of the termination.
And in fact, Article 7 of the Italian Workers’ Statute does not indicate a ‘final’ time limit within which the penalty must be adopted, but lays down the fundamental principles of disciplinary proceedings, such as the public disclosure of disciplinary rules and the employee’s right to defence himself/herself.
Case law has repeatedly stated that the notice of disciplinary dismissal – as, more generally, the imposition of disciplinary sanctions – must be of a ‘timeliness’ nature, as must the notification of the charge (among others: Court of Cassation No. 17058 of 2003).
Failure to meet this requirement is in fact suggestive of the employer’s willingness to accept any justifications of the employee, against whom the charge has been brought, or in any case to assess the employee’s conduct as not being of such a serious nature as to warrant dismissal: an excessive delay would, in fact, be contrary to the basis of the reasoning adopted (i.e., as expressly provided by Article 2119 of the Italian Civil Code, ‘a ground that does not enable the relationship to continue, even temporarily’).
The ‘timeliness’ nature can then be translated, more precisely, into a specific procedural guarantee provided for by the national collective bargaining agreement, capable of specifying further procedural elements including, for example, the introduction of a mandatory time limit for exercising disciplinary power (Italian Court of Cassation No. 9767 of 2011), i.e. a maximum spatium deliberandi [time period for deciding] established in a very precise measure aimed at shielding the (less precise) rule of the timeliness for the adoption of the disciplinary measure.
Take, for example, Article 240 of the National Collective Bargaining Agreement for Commerce, according to which ‘any disciplinary measure adopted shall be notified to the worker by means of a registered letter with return receipt or other suitable means for certifying the date of receipt, within 15 days from the expiry of the time limit given to the worker to submit his/her counter-arguments’, or the National Collective Bargaining Agreement for the Metalworking Industry, according to which ‘the dispute must be made in writing and disciplinary measures cannot be imposed before 5 days have elapsed, during which the worker can submit his/her justifications. If the measure is not imposed within 6 days following the expiry of the time-limit for justifications, these will be deemed to be accepted’(Article 8, section IV, National Collective Bargaining Agreement for the Metalworking Industry).
In interpreting clauses similar to those indicated above, the case law of the Italian Court of Cassation has pointed out, in a number of rulings, that ‘where the collective bargaining agreement imposes on the employer the duty to adopt the disciplinary penalty, under penalty of forfeiture, within a given time limit from the date of receipt of the justifications provided by the worker, such time limit must be deemed to have been complied with solely on the ground that the employer promptly expressed the intention to impose the penalty, and it is of no relevance that such a declaration is brought to the knowledge of the employee following the expiry of that time limit” (Court of Cassation 4.10.2010 judgment No. 20566 and, in the same sense, Court of Cassation 2.3.2011 judgment No. 5093; Court of Cassation 10.9.2012 judgment No. 15102; Court of Cassation 20.3.2015 judgment No. 5714).
It has been observed, in fact, that the principle of the separation between the time in which the intention to withdraw is expressed and the time in which the effects referable to that intention are produced, affirmed by the Joint Chambers in judgment No. 8830 of 14 April 2010, must be applied whenever, as part of the disciplinary procedure, the time in which the intention is expressed does not coincide with the time in which the addressee becomes aware of it, because otherwise the yardstick of reasonableness and formal and substantive equality between the persons involved would be undermined.
On the basis of the so-called ‘principle of separation’, the employer therefore bears the burden of performing the activity necessary to start the notification procedure (i.e. by sending the registered letter or other suitable means), provided ‘that it is ‘entrusted to a service capable of ensuring adequate reliability free from its interference, by reason of a fair and reasonable balancing of the interests involved’ (Italian Court of Cassation judgment No. 18823 of 2018).
Untimely dismissal: consequences of penalties
On the principle of timeliness in disciplinary proceedings and on the issue of the consequent penalties under the regime of Italian Law No. 92 of 2012, the Joint Chambers of the Italian Court of Cassation intervened which, with judgment No. 30985 of 2017, drew a conceptual distinction between the ‘breach of the rules regulating the manner in which the entire procedural process is carried out at its various stages’ and ‘the breach of the general principle of substantive nature of the timeliness of the dispute when the dispute becomes that of considerable and unjustified delay’.
The Italian Court of Cassation emphasised that in the first case, ‘mere compliance with procedural rules, albeit essential, is relevant’, whereas in the second case, ‘more important requirements’ are taken into consideration, such as that of ‘guaranteeing the employee an effective defence’, to ‘protect (the employee’s) lawful expectation – in relation to the optional nature of the exercise of disciplinary power, in the performance of which the employer must behave in accordance with the standards of good faith – on the lack of disciplinary implications of the offence’ and to ‘remove him/her from the risk of an arbitrary postponement of the start of the disciplinary procedure’.
With regard to the consequent penalties, judgment No. 30985 of 2017 established that in disciplinary dismissal, where the law or the rules of the national collective bargaining agreement provide for time limits for the notification of the grounds for dismissal – which is governed ‘ratione temporis’ by Article 18 of the Italian Workers’ Statute, as amended by Italian Law No. 92 of 2012 -, failure to comply with these time limits constitutes a procedural breach and entails the application of the indemnity penalty provided for in Article 18(6) of said Workers’ Statute, i.e. the so-called weak indemnity protection between a minimum of 6 and a maximum of 12 months’ salary. On the other hand, it held the strong indemnity protection of Article 18(5) to be applicable in the event of a finding of ‘significant and unjustified delay in the notification of the charge underlying the withdrawal measure’ (see, in the same sense, Italian Court of Cassation judgment No. 12231 of 2018).
In the case law precedents of the Italian Court of Cassation, breach of procedural rules has been recognised, for example, where ‘the disciplinary notice, aimed at dismissal, does not contain a sufficient and specific description of the worker’s conduct’ (Court of Cassationjudgment No. 16896 of 2016), as well as in the event of ‘breach of the employer’s obligation to first hear the employee’s defence’ (Court of Cassation judgment No. 7392 of 2022), deeming the protection provided for in Article 18(6) is applicable in such cases.
On the other hand, it was held that ‘the fundamental failure to challenge the infringement leads to the entire procedure being non-existent, and not only to the failure to comply with the its governing rules, with the consequent application of the reintegration protection provided for by Italian Law No. 300 of 1970, paragraph 4 of Article 18, as amended by Italian Law No. 92 of 2012, referred to in paragraph 6 of the aforesaid article as regards the case of absolute lack of justification for the dismissal measure, a disciplinary dismissal adopted without any challenge to the charge should be considered as such” (Court of Cassation judgment No. 25745 of 2016; Court of Cassation judgment No. 4879 of 2020).
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