In ruling no. 11638 dated 11 April 2022, the Court of Cassation established that the single company attribution in the employment relationship implies that the verification of the redundancies must be carried out considering the entire workforce, i.e., the workers employed by the other companies of the established individual company organisation and not only those of the formal employer company.

Facts of the case

In the first and second instances, the existence of a single company organisation between two defendant companies was established, and the dismissal of a worker because of a collective dismissal procedure activated by his formal employer company was declared illegitimate.

According to the Court, the worker’s redundancy was attributable to the employment situation including the employees of the other defendant company already acquired and owned by the first company.

This circumstance, according to the court, entailed the need that the verification of redundancies in the collective procedure initiated by the formal employer, should be carried out considering the workers employed by the other company and not only those of the formal employer.

The losing companies appealed against the Court’s ruling in cassation, relying on four pleas in law, which the worker opposed with a counter-appeal. 

The Supreme Court of Cassation’s ruling

The Court of Cassation held that the assessment made by the local Court as to the existence of a single company attribution was above reproach.

In the Court of Cassation’s opinion, the established elements of connection between the companies went beyond the implications of a simple synergy between associated companies in terms of features and purposes. These elements encroached on an interpenetration of means and activities, where the latter is indicative of substantial subjective unity and of an individual decision-making centre.

The unavoidable consequence of the single employer attribution is, according to the Court of Cassation, the need for the collective procedure to involve the workers of the individual company organisation resulting from the integration of the two companies, this is because the prerequisites for limiting the number of workers to be dismissed to the sole workforce of the formal employer have not been deduced and proven.

Given the above, the Court of Cassation dismissed the appeal and ordered the two companies to pay the costs of the proceedings

Other related insights:

The Court of Cassation, with order no. 118 of 7 January 2020, on the subject of collective redundancy, stated, recalling its own consolidated case law, that the choice of workers to be dismissed cannot fall exclusively on the personnel assigned to the department or sector eliminated or reduced. There must, in fact, be objective business needs underlying the choice of those subjected to the restructuring project. And the burden of proof of the existence of such reasons lies with the employer.

Facts of the case

Both the Judge at first instance and the Court of Appeal had declared unlawful the dismissal of a worker in the context of a collective redundancy procedure, declaring the employment relationship terminated and ordering his former employer to pay twenty months’ salary as compensation, in addition to the reimbursement of legal costs.

As the basis of the decision, the Court of Appeal found that the trade union agreement signed made it possible to consider that the reasons put forward by the company to demonstrate the abolition of the department to which the worker was exclusively assigned existed. However, this agreement could not be regarded as sufficient to remedy the obligation not to limit the scope of choice to the department abolished. According to the District Court, the company should have compared the worker with the workers employed in the other departments. This was because he had shown that he had a number of skills similar to the workers in question (repêchage rule) and he was physically fit to be compared with them. Finally, in the Court’s view, the compensation under Article 18 of Law 300/1970 provided for following the termination of the relationship did not require the deduction of either the aliunde perceptum [refers to the event in which the employee has earnings from other employment undertaken in the meantime] or the aliunde percipiendum [refers to the event in which the employee has not sought other employment in the meantime].

The unsuccessful company appealed to the Court of Cassation against the decision of the Court of Appeal with only one ground of appeal. The applicant resisted with a counter-appeal.

The decision of the Court of Cassation

By its ground for appeal, the company argued that (i) in a collective redundancy procedure the repêchage obligation does not apply and (ii) in the presence of a trade union agreement, there is no need for comparison with departments other than the one to be abolished.

The Court of Cassation, citing its own precedent, first of all stated that “in the matter of collective redundancy for reduction of staff, where the company restructuring project relates exclusively to a production unit or a specific sector of the company, the pool of workers concerned may be limited to those employed in a given department or sector only on the basis of objective company requirements, in relation to the company restructuring project, and it is the burden of the employer to prove the fact that it determines the objective limitation of those requirements and to justify the narrowest possible space in which the choice was made; with the consequence that the choice of workers cannot be considered lawful only because they are employed in the operational department abolished or reduced, neglecting the possession of professionalism equivalent to that of employees in other organizational units.

In the present case, in the Court’s view, it was the company’s obligation – since the employee had demonstrated that he possessed many professional skills acquired during the course of the employment relationship – to compare him with the employees of the other departments remaining in operation.

That said, the Court of Cassation, again recalling its own precedent, has observed that in the matter of collective redundancies, the employer and trade unions can sign an agreement to regulate the placement of redundant workers in mobility also by establishing conditions different from the statutory ones, provided that the requirements of objectivity and rationality are respected. This is because the agreement fulfils a function duly delegated by law.

However, in the present case, according to the Court of Cassation, the agreement reached between the parties did not comply with those requirements, because in providing for the redundancy of the worker it did not take into account his documented professionalism and the positions he could have occupied.

In view of all the above, the Court of Cassation rejected the appeal and ordered the Company to pay the costs of the proceedings.