international employment law firm alliance L&E Global

Italy: Dismissal for objective justified reasons: the latest judgment of the Italian Supreme Court

Under the Italian legal system, before serving an individual dismissal due to objective justified reasons, the employer is required to assess the possibility to relocate within the company’s organisation the redundant employee in similar positions/jobs of the same level and, according to the most recent case law, even of a lower level.

The latest judgment rendered by the Italian Supreme Court (no. 12132 of May 8, 2023) has further extended this obligation (the so-called “repêchage” obligation).

Indeed, the Italian Supreme Court has established that the employer, when evaluating the relocation of the employee must also consider those positions within its organization that even though they are at the moment of the termination covered, will become available in a period of time close to the dismissal’s date.

The Italian Supreme Court gives an extensive interpretation of the obligations of fairness and good faith that shall characterize the employment relationship even in the termination’s phase. In this context, it deems that the company’s picture at the time of the dismissal does not constitute a congruent perimeter within which the employee’s relocation may be assessed.

The repêchage obligation must also concern jobs/positions “soon” available.

In the case examined by the Court, the “available jobs in the near future” were those of two colleagues of the concerned employee, with fungible job profiles compared to those performed by the terminated employee, who at the time of dismissal had already resigned and were on notice.

However, it emerges from the judgment that the resignations of the two employees were not spontaneous but had been encouraged as part of a wider company’s reorganisation plan. Therefore, also these two positions were to be considered as redundant.

Moreover, these positions could not even be deemed to be “available” since the company gave evidence of the lack of subsequent new hires. Indeed, in consideration of such significant element, the employee lost the first two instances.

The Supreme Court, surprisingly, held that the employer’s punctual defences were not admissible, since introducing new and different factual circumstances with respect to those provided by the company along the trial (which defended itself initially stating that at the time of dismissal the positions were still covered).

Regardless of the complex procedural profiles pertaining the case examined, the principle expressed by the Supreme Court can not be ignored since it threatens to widen the already broad obligation of repêchage.

In this respect, the decision no. 12132 of May 8, 2023 constitutes a warning: employers dismissing employees for objective reasons may be required also to assess the employee’s relocation in relation to future available positions (of which they are aware at the time of dismissal).

It is worth evidencing that by applying such principle the lawfulness of this type of termination would be more difficult to be proven by companies.

The judgment appears objectionable since the Supreme Court should at least have emphasized the actual availability of the positions in question also in the light of ongoing business reorganisations.

In the absence of clear and predetermined limits, the extension of the obligation of repêchage to positions available in the “near” future risks to introduce a criterion for the evaluation of the lawfulness of dismissals not predictable for companies, as on the other hand, the principle of justice and fairness would dictate.

Key Action Points for Human Resources and In-house Counsel

Practical Points

  • Aside from any considerations on the conclusions of the Supreme Court, this decision implies that the employers shall be aware of the extremely heavy burden of proof they have to face when dismissing an employee for objective justified reasons;
  • Employers shall assess more accurately whether the redundant employees are inserted in department with colleagues performing the same/similar tasks and shall become more attentive on evaluating the existence of new positions within the company’s organization even in a near future (for example considering employees who are in notice period).
  • In case this decision become a well-established case-law, for the lawfulness of the dismissal it would not be sufficient not to replace the dismissed employee with a new hiring in the same and/or similar professional position.