With its order no. 16975 of 25 May 2022, the Court of Cassation intervened on the single company attribution in employment relationships, outlining the indicators.
In a ruling following a complaint under Law no. 92/2012, the local court found that the dismissal of an employee (i.e., the alleged divestiture of the hotel business) lacked a justified objective reason. Instead, the court found a single company attribution due to the relation between the formal employer and other affiliated companies and the applicable protection measure.
The Court of Appeal established that the contract for the provision of certain services stipulated between two companies was unlawful since the companies had the same registered office, corporate purpose and owner. It found the elements of corporate connection related to features and purposes had gone beyond a synergy between affiliates but represented a co-mingling of means and activities, which implies a substantial subjective unity.
After the workers employed in the affiliated companies were reviewed, the local court considered the manifest lack of the reason for the dismissal, and ordered the companies jointly and severally to reinstate the employee and pay her an indemnity of 12 months’ salary under art. 18, paragraphs 4 and 7 of Law no. 300 of 1970.
One of the affiliated companies appealed against the local court’s ruling in cassation, arguing that there was no connection and control between them under art. 2359 of the Italian Civil Code, nor a case of joint employers, since the employee worked exclusively for one company.
The Supreme Court, rejected the company’s appeal and ruled that the Court of Appeal conducted a careful examination of the facts of the case. This established the fictitious nature of the service contract (which turned out to be a mere labour contract) and the existence of a single company attribution, without finding any flaws in the legal logic of the case which were raised by the appellant company.
Based on its well-established case law, the Court of Cassation outlined the criteria and indicators to identify the single company attribution, namely:
The Court clarified that the financial-functional connection between enterprises managed by companies of the same group did not entail the lack of “independence of the individual companies which have separate legal status. They continue to be responsible for the employment relationships of personnel working at each company.” However, the obligations arising from an employment relationship can be extended to the individual companies, identifying a single company attribution where, as in this case, “the court, by examining the individual companies”, adequately proved that there was a simulation or conduct breaching the law when splitting a single business.
As for the objection relating to the failure to establish the excessive onerousness of workplace reinstatement, despite the manifest lack of the fact on which the dismissal was based, the Court of Cassation, pointed out that the Constitutional Court declared art. 18, paragraph 7, second sentence, of Law no. 300/1970 constitutionally illegitimate (for violation of art. 3 of the Constitution), as amended by art. 1, paragraph 42, letter b) of the Fornero Law, where it provided that the court, when it finds that the fact underlying the dismissal for objective justified reason was manifestly unfounded, “may apply” – instead of “shall apply” – the rules set out in art. 18, fourth paragraph (see ruling no. 597/2021). The Court of Cassation emphasised that the Constitutional Court rulings produce the annulment of the provisions of the law declared unconstitutional, with erga omnes effects, not only ex nunc, but ex tunc, with the sole limitation of the pre-defined relationships. Since this did not occur, in the Court of Cassation’s opinion, the reinstatement measure must be considered correctly applied (based on the combined provisions of paragraphs 7 and 4 of art. 18 of Law no. 300/1970) in the face of the established manifest lack of the reason for the dismissal (i.e., the divestiture of the hotel business).
Other related insights:
With the recent ruling no. 181 published on 27 April 2022, issued as part of the Fornero Procedure opposition proceedings, the Court of Vicenza expressed its opinion on whether absences due to illness attributable to the employee’s disability can be included (or not) in the protected period.
The case originated from the dismissal of an invalid employee for having been absent due to illness for a period exceeding 365 days in the last three years, thus exceeding the protected period governed by the Agidae social-assistance collective labour agreement applicable to the employment relationship.
The employee, challenging the dismissal, objected to its discriminatory nature on grounds of disability, asking the Judge to declare it null and void.
In support of her argument, the employee invoked the Community legislation on direct and indirect discrimination (EU Directive 2000/78/EC) and rulings of the European Court of Justice on the subject, arguing that the employer was obliged to adopt “reasonable accommodations” to “guarantee persons with disabilities full equality with other employees.” This means the employer should have excluded from the protected period calculation the days of absence attributable to “endometriosis”, which was her declared disability, to avoid exceeding the protected period.
The Court, confirmed the order made during the summary proceedings and rejected the employee’s opposition based on several arguments.
While it is undeniable the European Court of Justice found indirect discrimination against the disabled in the way absences due to illness were calculated, since the disabled employee was subject to a greater risk of accumulating sick days, it is equally true that the conclusions reached by the European Court cannot be applied to every disabled person’s dismissal.
This is because it is up to the national court to establish whether the employer has ensured “reasonable accommodation” for equal treatment and verify the legitimacy of the purpose pursued by the national legislation.
During the proceedings, the Court found that the employer had adopted numerous “reasonable accommodations” in favour of the employee, including undergoing medical examinations which determined the employee’s fitness for the specific task.
The Court expressed the need to weigh the legally relevant interests of the parties, i.e., the disabled person’s interest in maintaining a job suited to her physical and mental condition and the employer’s interest in obtaining a useful service for the company, considering that Art. 23 of the Constitution prohibits welfare benefits, including those at the employer’s expense, unless provided for by law.
Continue reading the full version published in Norme & Tributi Plus Diritto of Il Sole 24 Ore.
In ruling no. 9800 of 25 March 2022, the Court of Cassation ruled that – if the notice referred to in Art. 4, paragraph 9, Law no. 223/1991 for the collective dismissal procedure does not correctly specify the criteria for the selection of the workers concerned, the procedure is unlawful and, consequently, the dismissal must be annulled.
The Court of Appeal of Reggio Calabria, reforming the first instance ruling, declared the collective dismissal announced by the employer company to the appellants by means of a notice under art. 4, paragraph 9, Law 223/1991, unlawful.
The local Court declared the employment relationship between the parties terminated, ordering the company to pay an indemnity of 12 months’ salary of the last full salary. This was because the dismissal notice was vitiated by a breach of form and failed to specify points awarded to each worker and the factual data relating to dependent family members, the abstract points provided for each criterion and each worker’s seniority data.
Six of the original workers appealed against the decision on four grounds, with the company responding with a counter-appeal. The public prosecutor concluded that the first grounds of appeal should be upheld and absorbs the others.
According to the Court of Cassation, the failure to specify in the notice, under art. 4, paragraph 9, Law no. 223/91, the criteria for choosing the workers to be dismissed did not allow the worker to understand why they were dismissed and not other colleagues. It stated that this hindered any challenge to the employer’s termination. That would entail a case of procedural unlawfulness since that failure would not constitute a mere formal non-compliance but would entail a breach of the selection criteria.
In the Court’s opinion, the unlawfulness could only lead to the dismissal annulment and the consequent ordering the employer to reinstate the employees and pay an indemnity not exceeding 12 months’ salary of the last full salary, under art.18, paragraph 4, of the Workers’ Statute.
Other related insights:
The Court of Santa Maria Capua Vetere, by decree under art. 28, Law no. 300/1970, of 24 February 2022, stated that the dismissal of a trade union delegate, in the absence of prior authorisation from the trade union to which they belong, is ineffective and constitutes anti-union conduct.
The decision stems from an appeal filed by the trade union association to which the employee belongs (RSU delegate), which said the employer was guilty of anti-union conduct having imposed the dismissal for just cause, in violation of art. 14 of the Multi-industry Agreement of 18 April 1966.
The above rule, referred to by the Metalworking Industry’s National Collective Labour Agreement, for cases of disciplinary dismissal announced during the period of validity of the trade union office, provides that its operation is subject to the employer obtaining the authorisation of the trade union association to which the union representative belongs. The employer must notify the dismissal to the trade union delegate and the trade union association which rules on the expulsion measure within six days. The trade union organisation may refuse the authorisation, thus preventing the dismissal from taking place. If the trade union does not express its opinion within the following six days or does not decide to initiate the optional conciliation procedure under Article 14, the dismissal becomes effective.
The purpose of this procedure is to (i) verify that the dismissal is not instrumental and unjustified, and (ii) to avoid possible disturbances connected with the dismissal of a trade union representative.
Only after filing the appeal under Art. 28, Law no. 300/1970 by the trade union association, the company had activated the procedure, communicating the re-admission of the trade union delegate, to fulfil their purpose but exempting them from providing work.
The court noted that the absence of the request for authorisation by the employer entails the “inoperability” of the dismissal and counted as anti-union conduct. In the court’s view, the procedure’s start (following the appeal filing), with the simultaneous formal readmission of the worker to service did not result in the anti-union conduct ceasing to exist, as the company claimed, or the conclusion of the disputed matter.
What mattered to the Court for the purposes of the existence of the interest in bringing proceedings under Art. 28, Law no. 300/1970 was not only the existence of the anti-union conduct but its continued damaging effect. In this case, the damaging effects was that the employer effectively prevented the RSU delegate, who had been suspended from work, from accessing company premises and exercising their functions.
The court ordered the continuation of the employment relationship without exemption from work and for the time necessary to carry out the procedure under Article 14 of the Multi-industry agreement.
Based on previous case law, the decree held that the sanction of reinstatement under Article 18 of the Workers’ Statute does not apply in cases of nullity of dismissal. This is because the infringement of Article 14 is a breach of contract and not a breach of law. Dismissal is only invalid if the employer’s termination is based on the employee’s membership of a trade union or participation in trade union activities and is therefore discriminatory.
Other related insights:
In ruling no. 8628 of 16 March 2022, The Court of Cassation ruled that the validity of dismissal for exceeding the protected period “‘by summation” requires specification of the days of absence due to illness, to which unjustified absences cannot be counted.
An employee of the Udine Prefecture had challenged her dismissal for exceeding the protected period, arguing that the dismissal notice did not correctly specify the days counted and added together.
The Court of First Instance upheld the employee’s appeal, declared the dismissal unlawful and ordered the Ministry to reinstate her.
The Ministry then appealed against the ruling before the Court of Appeal of Trieste, which confirmed the first instance ruling, upholding the principle that if the employer specifies the employee’s days of absence in the termination notice, it cannot subsequently change or add them.
In this case, the period specified by the Ministry of Health for absence due to illness was 472 days (taking into account the “protected period by summation”) and was less than the protected period under collective bargaining and set for 484 days. This is because the period specified by the Ministry included 12 days of employee unjustified absence and, therefore, was not included in the protected period calculation.
In addition, the Court of Appeal found that the Ministry’s evidence that the days of unjustified absence were attributable to the employee’s illness was worthless. According to the Court of Appeal, what mattered was the “incontrovertibility” of the periods specified in the dismissal notice, based on the principle that the reasons for dismissal cannot be changed.
The unsuccessful Ministry thus appealed the Court of Appeal’s ruling in cassation.
The Court of Cassation confirmed the decisions of the courts. The Court of Cassation upheld the local court’s finding that the 12 days of unjustified absence were not taken into account for a protected period exceeding purposes, as they related to a different case.
The Court of Cassation observed that, contrary to the Ministry’s claim, the Court of Appeal did not intend to affirm that in cases where the protected period was exceeded the employer must specify the individual days of illness considered for the calculation of the protected period in the letter of dismissal. This precluded a subsequent specification by the employer.
The Court of Cassation stated that the employer cannot ex post add to or change the days taken into account to exceed the protected period allowed by collective bargaining, if it specifies the absences taken into consideration.
According to the Court, for cases of dismissal for exceeding the protected period, “the employer does not have to specify the individual days of absence since more comprehensive information is sufficient. This is based on the amended Article 2 of Law no. 604/1966, which requires the simultaneous communication of the reasons, without prejudice to the burden of alleging and proving in court the facts constituting the power exercised. However, this applies to the protected “single period” (i.e. a single uninterrupted period of illness), where the days of absence are easily calculable even by the worker. In cases of protected period “by summation” (i.e.multiple and fragmented absences), a specification of the calculated absences is required to enable the worker to defend themselves.” In the Court of Cassation’s opinion, even when there was a dismissal for exceeding the protected period “by summation” the rule of unchangeability of the reasons underlying the termination applies. This rule constitutes a guarantee for the worker who, otherwise, would not have the opportunity to challenge the dismissal.
Other related insights:
