By order No. 12241 of 9th May, the Labour Division of the Court of Cassation decided on the validity of disciplinary termination of an employee of an IT company who had refused to further study certain operating systems and to update the programmes used by a client. In the case at hand, the judge of the merits had found that the worker had refused to take the training as directed by his immediate supervisor, although the participation in the professional development courses would not have caused him to bear any expenses, use leave days or sacrifice his free time. The passivity and non-cooperation of the employee was also ascertained, in that he had refused to update operating systems at a client’s premises. On these grounds, the Court of Cassation held that the company had lawfully communicated the disciplinary dismissal with prior notice; in the Court’s view, the worker’s behaviour amounted to serious insubordination, as it was in clear contrast with the duty of diligence, to be understood, in the case at hand, as also referred to the professional development required for employee profitability.
Our partner Alberto De Luca participated in the 31st Annual Meeting and Conference of the Inter-Pacific Bar Association (IPBA). Alberto took part in the panel discussion entitled: ”Lawyer, I want to fire an employee in another country for poor performance. How do I do this and what are the risks?”
The discussion dealt with an Employment law survey report, involving almost 30 countries from around the world, and which focused on alternative dispute resolution (ADR) for employment disputes and on the employment process.
During his talk, Alberto addressed guiding clients through redundancies and employment dispute resolution around the world, considering the options, processes, and potential legal risks associated with a regional or global workforce, giving specific attention to:
In its recent judgment No 5288 of 20 February 2023, the Italian Court of Cassation ruled that, with reference to the national collective bargaining agreement for employees in the tertiary sector (hereinafter the ‘CCNL’), the job retention period of 180 days, to be calculated in a calendar year starting from the first episode of illness, must be considered to refer to both the protected period relating to a single long-term sick leave and the protected period relating to several days of sick leave (i.e. by aggregation, ‘sommatoria’).
The Court of Appeal of Catanzaro upheld the appeal of an employee dismissed for exceeding the protected period and, partially reversing the first instance judgment, held the dismissal to be unlawful. The Court of Appeal ordered the employer company to reinstate the employee and to pay compensation for damages under Article 18 of the Workers’ Charter.
The regional Court reached its decision stating that ‘based on the provisions of Articles 175 and 177 of the tertiary CCNL read in conjunction […] if a period of sickness is followed in the same year by an interruption, a new protected period of 180 days starts to run’. The Court of Appeal, therefore, having ascertained that the employee had not had 180 consecutive days of sick leave in the course of the calendar year, held that there had been no exceedance of the protected period which had been the basis of the dismissal by the employer.
The Company filed an appeal before the Italian Court of cassation against the Court of Appeal’s judgment. The two grounds of appeal related to the breach and false application of Article 175 of the Italian CCNL, arguing that this provision contemplated an ‘aggregated’ protected period – which, in the present case, was to be considered exceeded by the employee – and not a ‘single’ protected period as ruled by the regional Court.
The Italian Court of Cassation, in order No 23155 of 2020, rejected the appeal brought by the Company, stating that ‘if the injury is followed by a period of absence due to sickness, as was unquestionably the case in this instance, even if there is no interruption, a separate period of 180 days begins to run from the time of the onset of the sickness, and only at the expiry of this period can there be dismissal for exceeding the protection period’.
The Company, alleging a factual error in the ruling made by the Italian Court of Cassation, appealed for the revocation of the relevant judgment, arguing that the ruling was based was on an erroneous basis. The Court documents showed, in fact, that the absences, for two distinct periods of 109 and 124 days respectively, were due exclusively to sickness and not also to injury as indicated by the Italian Supreme Court.
The Italian Court of Cassation, in accepting the appeal for revocation brought by the Company, preliminarily noted that the interpretation adopted by the appeal judges did not correspond to the literal content of Article 175 of the Italian CCNL, where the contractual provision provides for a protected period for the role ‘of a maximum period of 180 days in a calendar year’, without referring to the consecutive or interrupted nature of the absences.
The Italian Supreme Court also ruled that the solution proposed by the Court of Appeal was untenable on the basis of a general interpretation of the rules, since it did not take into account the difference, which the Italian CCNL does, between absences caused by a single sickness and the scenario in which there are different causative factors of absence (i.e. sickness and accident) that bring into operation two independent protection periods.
Therefore, according to the Supreme Court Judges, the term of 180 days, calculated backwards from the last period of sickness within the calendar year of 365 days, must also apply to the protection period for several sicknesses and not only to the protection period for a single sickness.
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With the recent order No 1584 of 19 January 2023, the Italian Court of Cassation addressed dismissal for ‘poor performance’, stating that conduct that had previously been the subject of separate disciplinary proceedings cannot be used as a basis for dismissal on the grounds of poor performance.
Poor performance consists in a breach by the employee of his or her main obligation, which is to perform work, and is therefore a lawful subjective ground for dismissal. Case law has, over the years, identified specific and determined limits within which dismissal for poor performance can be said to be lawful.
A railway company employee challenged their dismissal which was on the basis of ‘the worker’s poor or insufficient performance fulfilling the duties of their grade’.
The Court of Bologna, in accepting the worker’s appeal under Article 1, paragraph 51, Italian Law No 92/2012, against the order of the same Court, declared the dismissal unlawful, and applied the so-called ‘mitigated’ reinstatement protection under Article 18, paragraph 4, Italian Law No 300/1970.
Similarly, the Court of Appeal of Bologna also declared the dismissal unlawful, fully confirming the Court’s ruling and ordering the company to pay the worker the additional costs of the proceedings.
The first instances Judges come to the conclusion that the dismissal in question was based exclusively on previous disciplinary charges against the worker, which had already been subject to sanctions by measures other than dismissal. The Judges noted that the employer company had not evidenced, on an objective level, the employee’s below-average performance and, on a subjective level, the agent’s fault, caused by inexperience, incapacity and negligence.
Finally, they pointed out that breach of the ne bis in idem principle, with the earlier exercise of disciplinary powers, resulted in the non-existence of the alleged fact underlying the dismissal.
The Company, therefore, appealed the judgment of the Court of Appeal before the Italian Court of Cassation.
When examining the matter, the Court of Cassation confirmed the rulings of the lower judges regarding the unlawfulness of the dismissal.
First of all, the Cassation Court Judges reiterated a well-established principle of jurisprudence on the subject of poor performance where the case arises, on an objective level, due to performance below the required standard and, on a subjective level, due to the fault of the worker.
For this reason, continued the Court, poor performance cannot be proved by several previous disciplinary actions against the worker which have already been sanctioned in the past, because this would constitute an indirect substantial duplication of the effects of conduct that has already been exhausted.
According to the Judges of the Italian Court of Cassation, therefore, the employer is not allowed to exercise disciplinary power twice based on the same facts under a different assessment or legal interpretation, as – in the opinion of the Italian Court of Cassation –done by the railway company. The employer, in fact, based the dismissal exclusively on previous disciplinary charges used to evaluate the overall application of the exemption from duty provided for by Article 27, paragraph 1, letter d), of the implementing regulation, Italian Royal Decree No 148/1931 governing the employment relationships of road and tram drivers.
According to the Italian Court of Cassation, therefore, it is certainly possible to include in poor performance multiple incidents, provided that they do not consist of multiple prior disciplinary incidents of employees already sanctioned – without dismissal – in the past.
Finally, the Italian Court of Cassation also confirmed the decision of the Court of Appeal regarding the protection regime applied once the unlawfulness of the dismissal had been ascertained. In particular, the Judges clarified that if the action is no longer punishable, it is equivalent to a fact devoid of illegality and as such attributable to the provision of Italian Law No 300/1970, Article 18, paragraph 4, as amended by Italian Law No 92/2012 (i.e. the ‘mitigated’ reinstatement protection).
In conclusion, therefore, once the employer has exercised its sanctioning power in respect of disciplinary conduct, not only does the power lapse in the hands of its holder, so that the employer can no longer exercise it for the same conduct, but at the same time, the action constituting a disciplinary issue can no longer be sanctioned, losing its unlawful nature due to the exhaustion of the sanctioning power.
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With Order of 23 January 2023, No 1965, the Italian Court of Cassation stated that, for the purposes of applying the collective dismissal procedure referred to in Italian Law 223/1991, the size requirement of at least 15 employees must refer to the company as a whole and not to the single production unit.
In the case examined by the order in question, the worker had been fired for a justified objective reason. The Court of Catania had declared the dismissal unlawful since it was ordered without observing the procedure for collective dismissals referred to in Italian Law 223/1991.
The Court of Appeal of Catania confirmed the decision of the judge of first instance and, therefore, the reinstatement of the employee.
The judges of the Italian Court of Cassation, in confirming the lawfulness of the worker’s dismissal, pointed out that the size requirement in the collective dismissal procedure must be assessed with reference to the company as a whole and not to individual territorial business units.
According to the Italian Court of Cassation, from a literal interpretation of Article 24 of Italian Law 223/1991, under Article 12 of the Italian general provisions on the law, the legislator’s intention emerges from the fact that the term ‘undertaking’ is not to be confused with the concept of ‘production unit’ referred to in Article 18 of Italian Law 300/70.
This conclusion can also be reached on the basis of the rationale for the provisions on collective dismissal the purpose of which is both to protect the worker as an individual but also to eliminate or reduce the social impact of the measure imposed on all workers.
Therefore, given the diversity of the interests protected, Italian Law 223/1991 cannot in any way be superimposed on Article 18 of the Italian Workers’ Charter which, for the purposes of offering real protection, requires the assessment of the size requirement in the production unit of the dismissed employee.
In the light of the principles set out above, the Court rejected the company’s appeal, confirming the unlawfulness of the dismissal and, consequently, the employee’s right to reinstatement.
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