Dismissal

In order for a dismissal to be valid, our legal system requires that it is supported alternatively by a justified objective or subjective reason (Italian Law 604/1966), or by a just cause (Article 2119 of the Italian Civil Code), where:

• the objective justifiable reason is based on an organizational need on the part of the employer such that the continuation of the employment relationship would cease to exist;
• justifiable subjective reason entails a serious breach of contract by the employee, such as insubordination, repeated non-compliance with working hours, etc.;
• just cause is generally due to the employee’s behavior being so serious that it does not permit the employment relationship to continue, even temporarily, given the irreparable breach of the fiduciary relationship between the employer and employee.

The dismissed employee must be granted a certain period of notice, generally determined by the applicable NCLA. As an alternative, the employee may be provided with an indemnity in lieu of notice in an amount equal to the salary that would have been paid during the notice period, so as to immediately terminate the employment.

The terminated employee must also be paid the severance pay accrued up to the date of dismissal, plus the indemnity in lieu of any unused holidays and leave.

An additional cost due by the company is the so-called dismissal ‘ticket’, which is a contribution to be paid to the INPS in cases of termination of an employment relationship for one of the reasons that would entitle the employee to the unemployment allowance (so called ‘NASPI’). This amount is equal to 41%of the monthly NASPI ceiling for each year of service of the employee by the company, up to a maximum of 36 months.