24 Gen TERMINATION OF EMPLOYMENT IN ITALY: TYPES OF INDIVIDUAL DISMISSIAL
The field of employment law in Italy, in recent years, has been constantly modified. One of the biggest changes is the reform carried out in 2015 by the Renzi government, which is called Jobs Act. Due to this reform a lot of new legislative acts entered into force in 2015. Among other novelties, let’s concentrate on the changes concerning the procedure of dismissing an employee from work. The main purpose of the new regulation is to reduce the financial uncertainty among employees resulting from the redundancies while maintaining a high level of workers’ rights. The new regulation however concerns employment agreements that entered into force after 7th March 2015. The previous provisions will still apply to employment agreements concluded before this date ((Section 18 of the Italian workers’ Statute, as amended in 2012). In this way, a unique dual-system was created in Italy. Let’s focus on the most important changes that concern the dismissal of an employee in Italy.
To start with, we must know what is an individual dismissal (il licenziamento individuale) in the Italian legal system. An individual dismissal is one of the form of termination of an employment relationship. The employment relationship is terminated by a unilateral receptive act taken by the employer. Such an act is valid if the employee is notified about dismissal with
a document in writing form. In principle, such notification must be preceded by a period of notice. Depending on the reason the employee is dismissed, we differentiate between the various types of dismissal. Below we will indicate different types of dismissal that exist in the Italian legal system.
TYPES OF INDIVIDUAL DISMISSAL
In Italian legal system we can indicate three types of individual dismissal:
- dismissal at will ( ad natum);
- dismissal for just cause ( per giusta causa);
- dismissal for justifiable reasons (per guistificato motivo) distinquished into subjective and objective.
DISMISSAL AT WILL
When it comes to the first type of the dismissal it is used only for the cases for which the law non envisage specific limitations on withdrawal. Dismissal at will is regulated in art. 2118(1) of the Italian Civil Code -,,Each of the contracting parties may withdraw from an open-ended employment contract, providing notice according to the terms and methods established by corporative regulations, accepted practice or equity.’’ In other words, using this kind of dismissal
a worker can be dismissed by employer without the obligation to provide any motivation, solely respecting the period of notice envisaged under the contract and respecting the restrictions connected with the written from. Recently, dismissal at will is a rather rare case, because this regulation applies to only few categories of employees like workers on trial (per i lavoratori
i prova), domestic workers (il lavoro domestico), executives (per i dirigenti) and employees who are fulfilling the requirements to achieve a pension (i lavoratori che abbiano raggiunto i requisiti pensionistici ) if they don’t have the willingness to continue to remain at the workplace.
DISMISSAL FOR JUST CAUSE
In Italy, the legal definition of ,,just cause’’ we can find in Italian Civil Code (art.2119). According to this regulation, a just cause is defined as the reason that does not allow (even on
a provisional basis) the continuation of the working relationship. In other words, this provision establish that each of the contracting party may terminate the employment contract before its end
( in case of fixed contracts) or without forewarning in case of indefinite-term contract.
Having clarified the definition of the abstract concept of dismissal for just cause, we should now indicate the cases that may lead to immediate termination of the contract, i.e. without notice. Generally this procedure is taken by the employer in the case of extremely serious breaches and damage to the bond of trust. Making the assessment of whether or not there is just cause
the employer must always take into account some specific parameters of the assessment like: the quality and nature of the relationship, the position that employee holds inside the company,
the obligations he performs, the place in which discussed fact took places and any other circumstances that had a negative, unacceptable impact on the working relationship. Employer analyzing in concrete situation we are meeting a just cause are obliged to take into consideration both objective and subjective circumstances.
In order to better understand aforementioned parameters of assessment we should examine some examples that comes from the case law on this topic, where the court took its position in relation to individual, specific cases.
According to the Supreme Court enterprise bankruptcy or administrative compulsory liquidation does not represent a just cause. A just cause is represented by: molestation of the employer, request of the unlawful acts by the employer, offending behavior by the employer, discriminatory acts of colleagues supported by the employer, duty depletion, compensation payment delays. The most frequent cause of being dismissed at will for employees is their behavior. With reference to the harm done to the bond of trust in the case of the misappropriation of corporate assets, some case law considered that even if the economic damage is slight., it is irrelevant, since priority should be given to the symptomatic value of act, which compromises the trust that
a company may place in the employee. Also just cause for dismissal has been found to exist in the case of criminal coercion exercised by an employee against a colleague, consisting in having forced a shop assistant to purchase goods approaching their sell-by date. Another example, especially current in recent years, is the misuse of the employer’s technological resources in the workplace.
A typical instance of such an abuse is primarily the misuse of the Internet by an employee in
the workplace, during the time assigned for work and paid as such. Such abuses legitimizes
the employer to dismiss the employee. The same conclusions also appear in relation to the use of the company mobile for personal purposes. An interesting case, in which court has found the just cause to dismiss is ATM and pay by credit card sums exceeding authorized limits, this may lead to immediate dismissal. As we can notice in the indicated cases, what judicial jurisdiction may consider like the ‘’just cause’’ always depends on a specific, individual situation. Some behavior
of the worker not suitable for an employment relationship- normally irrelevant for the purposes of dismissal-become significant when due to their seriousness and nature they are such as to consider the employee unsuitable to continue in the relationship (Supreme Court no.3379 of 6 March 2003.)
DISMISSAL FOR JUSTIFIED REASON: SUBJECTIVE AND OBJECTIVE
After having analyzed the case of dismissal for just cause, we should consider that the working relationship can be also terminated with notice (con preavviso) according to Art. 2118 of the Italian Civil Code. Article 3 of Law No. 604/1966 distinguishes between two types of justifiable reason: “subjective” (soggettivo), consisting of a “significant non-fulfillment of the employee’s contractual obligations”, and “objective” (oggetivo), which occurs when dismissal is justified by “corporate reasons inherent in the production activity, the organization of work and its proper functioning”. At first glance, the dismissal for subjective justified reason is very similar to dismissal for just cause. What however distinguishes dismissal for a justified reason from that for just cause
is that in the former the violation has the less grave nature, which does not make it impossible to continue the employment relationship. As we can see the basic difference between the two types
is qualitative in nature, in the sense that the dismissal for just cause is connected with much more serious violations of the contract compared to those at the basis of dismissal for justified reason. Behaviors that may lead to dismissal for subjective justified reason are e.g. : unjustified absence, abandonment of the workplace, breach of the obligation of correctness, loyalty an noncompetition or simulating illness in order to perform other work. It is worth to highlight that in accordance with the case law, it is excluded to dismiss an employee because of his poor performance, unless the employer proves his negligence (Supreme Court no. 7398 of March 2010).
The second type of dismissal for the justified reason is dismissal for objective purposes. Objective justifiable reason has nothing to do with the employee’s conduct, but is connected with the enterprise’s facts and/or events which affect the enterprise reality in which the worker
is inserted, and mean that the employer has to make a decisions (of an organizational or economic nature) resulting in the abolition of jobs. Also in that case, the employer is obliged to communicate the fact of putting an end to the employment relationship with notice pursuant to Art. 2118 of the Italian Civil Code. When an objective reason for dismiss the worker occurred, the employer has to prove that the termination of the employment is inevitable and that he is unable to employ the worker in other duties. The scope of the objective reasons for dismissal for is wide.
As an example, we can mention the following reasons: the computerization of services, reorganization for the more economically viable management of the enterprise, the termination
of production activity or part of it, the completion of work on a construction site, the closure
of a branch of a store or of a single department.
UNFAIR DISMISSAL – PROTECTIONS FOR EMPLOYEES
In Italian legal system, any dismissed employee who considers the termination does not have adequate grounds is entitled to take an action before the Labour Court in order to challenge it. Depending on the date, when the employee was hired, we apply different regulations.
For employees hired before 7th March 2015, we use the provisions of Law 92/2012. Meanwhile for those employed after 7th March 2015 we use those provided in Jobs Act.
The following regulations refers to the unfair dismissal of an employee hired before
7th March 2015:
1) Where it has been ascertained that the grounds for dismissal does not exist , the employer will be forced to reinstate the employee ( or pay the worker the compensation which
is equivalent of 15 month’s salary– if the worker opt for it). Moreover, the company will be ordered to pay damages in proportion to the months running from the date of dismissal
to reinstatement ( in any case up to 12 month’s salary);
2) When the Court judge that ,,there are not the grounds for a subjective justified reason or just cause’’, in other words that the dismissal was not justified, the employment relationship is terminated and the employer may be ordered to pay a compensation between
a minimum of 12 and a maximum of 24 months’ salary on the basis of the last overall salary received.
3) If the grounds of dismissal are found to be discriminatory (caused by reasons refereed to political or religious beliefs, race, gender, nationality etc.), the court issues a ruling
of nullity of the dismissal and orders the employer to reinstate the worker or pay the equivalent of 15 months’ salary. In addition, the company will be obliged to pay the salary that the employee would have received from the date of dismissal until the date of the court ruling.
4) In the case, the dismissal is considered to be legitimate, but the employer made some procedural errors envisaged under Law, the company is obliged to pay compensation of between a minimum of 6 and a maximum of 12 months’ salary on the basis of the last salary received.
For employees hired after 7th March 2015, according to the Jobs Act the following rules refers to:
1) Nullity of the dismissal – under Italian Labor Law the dismissal is considered to be null when, regardless of the formal reasons adopted, it is ascertained as being: discriminatory, ordered for reason of marriage, ordered during the period of protection envisaged by the law on maternity and paternity, ordered for a determining illicit reason pursuant to art. 1345 of the Italian Civil Code. In aforementioned cases the employer will be obliged to pay the salary that the employee would have received from the date of dismissal until the date of the court ruling, and to reinstate the worker or pay the equivalent of 15 months’ salary (if the employee will choose this option);
2) Unfair objective dismissal – the penalty for ascertained unfair objective dismissal is the order to the employer to pay compensation equal to 2 months’ salary for each year of service, with a minimum of 4 and a maximum of 24 months;
3) Unfair disciplinary dismissal – in the event of dismissal when it is openly visible that the reasons of dismissal are non-existent, the employee obtain the right to be reinstated to the workplace ( or to be paid 15 month’s salary if it is his choice) and the right to receive the compensation calculated on the basis salary that he/she would have received from the date of dismissal until the date of reinstatement;
4) In other cases in which there is ascertained in court that the dismissal is simply unfair (when the punishment is not adequate to the circumstances), the employer is ordered to pay damages equal to 2 months’ salary for each year of service, with a minimum of 4 (under Law 92/2012 it is envisaged 12) and a maximum of 24 months.