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.
With order 1888 dated 28 January 2020, the Court of Cassation has ruled on a case of dismissal for unlawful justified objective grounds with the consequent reinstatement in the job based on article 18 of Law No. 300/1970 (in the text prior to the amendment brought about with Law No. 92/2012). By expressing a general principle, first of all, the Court has stressed that «the actual protection of the job can in no way go so far as to exclude the possible impact of subsequent vicissitudes entailing the termination of the binding obligation». In the case at issue, with judgment 705/2017 and by reversing the ruling of first instance, the Court of Appeal of Catania declared the unlawful nature of the dismissal served by the employer on 18 July 2005 and ordered the reinstatement of the appellant in the job, regardless of the fact that the total discontinuance of the business had supervened pending the proceedings. The employer brought an appeal before the Court of Cassation against the appeal judgment complaining, amongst other reasons, the breach and the false application of article 18 of Law No. 300/1970 and of section 1463 of the Civil Code. In particular, according to the employer, in the appeal proceedings, the Court allegedly failed to examine crucial facts for the purposes of the reinstatement judgment, amongst which, the discontinuance of the business occurring after the dismissal and the filing of a proof of claim in the composition with creditors with the relevant assignment of assets to the creditors validated at a later stage. Based on a principle already set forth, the Court of Cassation has deemed that «the reinstatement is an effect of the ruling handed down pursuant to article 18 of Law No. 300/70 unrelated to the exercise of the employer’s potestative rights who, thus, may at all times infer the total or partial inapplicability to the case under dispute» (Court of Cassation 28703/2011). Should the supervened total discontinuance of the business be ascertained in the specific case, it would de facto amount to a cause of actual supervened impossibility not ascribable to the employer such as for the binding obligation to no longer exist, together with the corresponding applicability of the real protection. In light of the principles cross-referenced above, the Court of Cassation has upheld the employer’s appeal by holding that, without prejudice to the unlawfulness of the dismissal, the Court of Appeal could not have in any case ordered the employee’s reinstatement since it had failed to take into consideration, in light of the evidential findings, the actual supervened discontinuance of the business.
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The Court of Cassation, under ruling no. 26029 dated 15 October 2019, clarified that, in the context of a collective procedure for reducing staff numbers,
Facts of the case
An employee hired pursuant to the mandatory placement legislation had judicially appealed the dismissal sent to him in the context of a collective procedure. The worker had based his appeal on the assumption that, with his dismissal, the employer had breached the so-called special reserve required by law. The worker’s appeal was upheld at first and second instance, ordering the company to reinstate him in his post and to pay him compensation equal to 12 months’ salary of the last total de facto remuneration. The unsuccessful company appealed to the Court of Cassation against the ruling.
The decision of the Court of Cassation
The Court of Cassation, in rejecting the appeal of the employer company, preliminarily observed that, in this case, Article 10, paragraph 4, of Law 68/199 applies. According to said rule, dismissal on the ground of reduction in staff numbers or on justified objective grounds in respect of a mandatorily employed worker may be annulled if the number of remaining mandatorily employed workers is less than the special reserve.
The rationale of the rule is to avoid that, in the event of individual or collective dismissals for financial reasons, the worker can exceed the limits imposed on the percentage presence in his company of staff belonging to protected categories, originally hired in accordance with a legal obligation.
In this context, the Court of Cassation pointed out that the findings of the courts of first instance could not be re-examined in the context of legality, but considered them sufficient to support the decision. The courts of first instance had, in fact, agreed on the undisputed existence, in the company, of the requirements for recruitment pursuant to the legislation on compulsory placement and that, with the dismissal of the worker, the special reserve had been breached.
That said, in the opinion of the Court of Cassation, the protection applicable to the worker is attributable to theoretical case of annulment of the dismissal due to breach of the selection criteria, which exists “when the selection criteria are, for example, illegitimate, given that they are in breach of the law, or unlawfully applied, as they are implemented in contravention of legal or collective provisions” (Cassation no. 12095/2016). Therefore, in the case in question, paragraph 3 of Article 5 of Law 223/1991 applies, according to which “if the dismissal is ordered without observing the written form, the sanctioning regime referred to in Article 18, first paragraph, of Law 300 of 20 May 1970 and subsequent amendments, applies. In the event of a breach of the procedures referred to in Article 4, paragraph 12, the rules referred to in the third sentence of the seventh paragraph of aforementioned Article 18 shall apply. In the event of a breach of the selection criteria provided for by paragraph 1, the scheme referred to in the fourth paragraph of Article 18 shall apply.
In fact, the decision of the employer cannot be considered legitimate if, in breach of a legal provision, it includes, amongst its dismissals, a mandatorily employed worker, thus exceeding the limit of the special reserve. This is because, whilst, on the one hand, the legitimate interest of the entrepreneur in reducing the workforce in order to cope with a financial crisis must be taken into account, on the other hand, the interest of the mandatorily employed worker in keeping his job must also be taken into account.
According to the Court of Cassation, this conclusion appears to be in line with a rationale of the regulation aimed at ensuring compliance with special reserves and the obligations of employing disabled persons, which, only a protection of a restorative nature of the employment position of the dismissed person can guarantee.
The Labour Court of Padua, by ruling dated 4 October 2019, established that dismissal for just cause of employees who falsely attest to their presence in the office is permitted – and, therefore, lawful -, even if said conduct is ascertained by the investigative agencies. The case on which the Court of First Instance was called upon to decide refers to an employee hired with development technician within the context of the process of opening new sales outlets. The employee benefited from a position with independent access located in Bologna, adjacent to one of the company’s sales outlets, but entirely independent of said company, separated by a wall. The employee was required to register his entry and exit times via a badge stamping system or, should he forget, by manually entering the times in a special printout provided by the company (a method considered supplementary and not alternative to the former). Having said this, an employee at the company’s security office went to carry out checks on the alarm system at the sales outlet in Bologna and, on that occasion, visited the office next to that of the employee, who, that day, was not on at the office. The employee at the Security Department warned the company, which initiated a series of checks of the employee’s attendance records, noting that the latter often recorded his attendance by entering his times manually in the printout. In this context, the company considered it appropriate to initiate a series of checks, via an investigative agency, on the activities carried out by the appellant. From the investigations, it emerged that, during working hours, albeit attesting otherwise on the attendance sheet, the employee often used to carry out personal matters instead of carrying out his activities for the company, this was also carried out for a long period of time, which was obviously duly paid. This conduct was subject to disciplinary proceedings which led to the employee being dismissed for just cause. Therefore, said employee, following the appeal of the dismissal, filed an appeal with the Court of Padua, which called upon the Honourable Court to ascertain and declare the nullity and/or voidability and/or ineffectiveness and/or illegitimacy of the dismissal ordered by the company given that it was without just cause and, in any case, related to conduct that is punishable by a conservative disciplinary measure. The company duly appeared in court, contesting all charges and also demanding that the appellant be ordered to pay the legal fees.
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The Court of Appeal, by ruling 26029 dated 15 October 2019, reconfirmed that the dismissal of a compulsorily employed employee must be considered voidable in the context of a collective staff reduction procedure if, at the time of the termination of the employment contract, the number of remaining compulsorily employed employees is less than the special reserve and clarified that the consequences of the aforementioned voidability of the dismissal must be attributed to those actionable in the case of unlawful dismissal due to ascertained breach of the selection criteria. The case on which the Supreme Court was called upon to decide refers to an employee hired under the mandatory placement regulations, dismissed in the context of a collective procedure. The regional courts, called in the first and second instance to decide on the employee’s request aimed at obtaining a declaration of unlawfulness of the dismissal with all legal consequences, had accepted the request, sentencing the company to reinstate said employee in the workplace and to pay compensation equal to 12 monthly salaries of the final overall de facto remuneration. The Rome Court of Appeal had specifically confirmed the first instance decision based on the assumption that it was undisputed that he was a mandatorily hired employee, on the circumstance to be considered amicable under internal ruling, given that the employee had not provided evidence to the contrary, that, at the time of the termination of the employment contract the number of mandatorily employed employees was less than the special reserve. The company filed an appeal against the ruling of the Court of Rome, supported by a single ground. The employer claimed that it had not selected the disabled individual to dismiss him, but having applied a clause of the union agreement that provided for the outsourcing of the department in which he worked and having, in any case, offered the employee a relocation within the same production site and to the same tasks that he previously carried out, employed by the department’s contracting company, an offer that he had rejected. The Court of Appeal, in rejecting the employer’s ground of appeal, echoing the text of Article 10, paragraph 4, of Law 68 of 1999, according to which the dismissal referred to in Article 4, paragraph 9 of Law number 223 dated 23 July 1991, namely, dismissal to reduce the workforce or to for justified objective reason, exercised against the mandatorily hired employee, is voidable if, at the time of termination of the employment contract, the number of remaining mandatorily hired employees is less than the special reserve provided for by Article 3 of this law, specified as follows.
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