Observatory

Dismissal for justified objective reason, loss of contract: invalidity and reinstatement protection (Andrea Di Nino, Sintesi – Ordine dei Consulenti del Lavoro, December 2022)

30 December 2022

With judgment No 30167 of 13 October 2022, the Italian Court of Cassation rejected the appeal filed by an employer against a finding that a worker’s dismissal for a justified objective reason was unlawful.

Furthermore, the District Court had found that the worker had been assigned a task attributable to a level of qualification lower than the worker’s, in breach of Article 2103 of the Italian Civil Code. 

The facts of the case were that a worker who was head of shift of security guard patrols, was dismissed following the loss of a contract.

The Italian Court of Cassation based its decision on the ‘clear non-existence’ of the factual ground that gave rise to the dismissal, which – following the investigation carried out in the various levels of the proceedings – was not linked by a causal link to the disappearance of the post to which the worker was invalidly assigned. On this basis, the protection of reinstatement applied, as required by Article 18, paragraph 7 of Italian Law No 300/1970 and the company was also ordered to pay the costs of the proceedings.

The employer filed an appeal based on six grounds, which mainly concerned the ‘clear non-existence’ of the factual ground and the excessive burden of reinstatement, provided for by the above-mentioned Article 18.

In particular, the company claimed that the District Court breached the legal principle expressed by the Italian Court of Cassation during the annulment with regard to the interpretation of the concept of ‘clear non-existence’ of the factual ground which was the basis of the dismissal (under Article 18, paragraph 7 of Italian Law No 300 of 1970), which would have been carried out ‘without the investigation both on the “obvious and easily verifiable” lack of causal link between the assignment (invalid) to the post and subsequent disappearance of the post and on the excessive burden of reinstatement’.

Furthermore, the appellant alleged a failure to examine a decisive fact discussed between the parties, given that the District Court overlooked – for the purpose of assessing the ‘excessive burden of reinstatement’ – that there were no positions of head of shift available at the operations centre where the worker was employed. Consequently, as the worker had been found to be classified as third level referred to by the Collective Bargaining Agreement for Security (Contratto Collettivo Nazionale di Lavoro – CCNL), he could no longer be assigned the duties of head of shift.

Notwithstanding the appellant company’s arguments, the Italian Court of Cassation nevertheless considered the various grounds for appeal to be unfounded. In particular, it explained how Article 18, paragraph 7 of Italian Law No 300/1970 — which governs the sanctions to be applied in the event of a finding that a dismissal for justified objective reason is unlawful — has been ‘affected by two recent judgments of the Italian Constitutional Court, subsequent to the rescinding ruling, precisely with regard to the requirements for the application of reinstatement protection’.

In particular, the Italian Constitutional Court, with judgment No 59 of 1 April 2019, declared Article 18, paragraph 7 of Italian Law No 300/1970 to be unlawful in the part in which it provides that the judge, when he or she has ascertained the clear non-existence of the factual ground on which the dismissal for a justified objective reason is based, ‘may also apply’ – instead of ‘also applies’ – Article 18, paragraph 4. Judgment No 125 of 2022 also declared the unlawfulness of the same paragraph where it provides for the non-existence of the factual ground for dismissal, limited to the term ‘clear’.

On the basis of the Italian Constitutional Court’s clarification, the Italian Court of Cassation has highlighted that where the judge ascertains the non-existence of the factual ground on which the dismissal for justified objective reason is based, the dismissal must be annulled and the reinstatement of the worker ordered, ‘without any right to choose between restorative protection and financial protection’. Therefore, the assessment of the existence of the defects complained of in the appeal must be made by reference to the legal framework applicable as a result of the ruling of unconstitutionality.

On this point, the Italian Court of Cassation pointed out that the assessment of the merits of the cassation appeal must be made with reference to ‘the legal framework applicable as a result of the ruling of unconstitutionality, it being irrelevant that the contested decision or the very lodging of the appeal predates the ruling of the judge on the laws, given that the effects of the declaration of unconstitutionality of a law are retroactive to the date of introduction into the legal system of the text of the law declared constitutionally unlawful”.

Since the first five grounds of appeal all relate to the fulfilment of two requirements relating to the regime sanctioning dismissal for justified objective reason which are no longer valid, the above-mentioned grounds were rejected.

The District Court also found that the finding as to the unlawfulness of the factual ground underlying the dismissal was to be regarded as definitive, since the material ground giving rise to the employee’s dismissal must be considered to be totally non-existent, given that there was no lawful assignment of the employee for the contract. Therefore, an unlawful factual ground could not be the basis, in a causal connection, for the dismissal for justified objective reason.

In other words, the factual ground of ‘loss of contract’ — according to the Italian Court of Cassation — cannot justify the dismissal of the worker who could not be assigned to it. Thus, the only requirement of Article 18, paragraph 7 of Italian Law No 300/1970 (in the text following the two rulings of the Italian Constitutional Court) for the application of the reinstatement protection was fully satisfied.

The employer was therefore ordered to pay compensation and contributions due to the worker for the period between the termination of the relationship and the effective reinstatement, up to a maximum of twelve monthly payments.

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