Italy: The Dismissal for Objective Reasons Contextual to the Failed Settlement Procedure Pursuant to Section 7 of Law No. 604/1966 is Valid

The negative outcome of the settlement procedure, prescribed by Section 7, Law no. 604/1966 which states that whenever an employer staffed with more than 15 employees intends to dismiss an employee hired before 7 March 2015 for justified objective reasons. It does not require “that the notice of dismissal […] must be served in a different and subsequent context” with respect to the signing of the final report closing the said settlement procedure. This was affirmed by the Supreme Court in Order no. 10734 of 22 April 2024, regarding a case wherein an employee had been dismissed following the unsuccessful attempt of conciliation through the formalization of the dismissal for objectively justified reasons in the same minutes signed at the end of the settlement procedure.

The Court of first degree, confirming the judgement issued in the summary phase of the proceedings, had admitted the employee’s request to challenge the dismissal and, considering the breach of the formal requirement prescribed by Section 2, Paragraph 1, Law no. 604/1966 had granted the same reinstatement protection provided for in the case of dismissal served orally. According to the Court of first degree, this was due to the exclusion of “the equivalence between the notice of dismissal and the manifestation of willingness in the minutes concluding the conciliation procedure.”

Instead, the Court of Appeal, emphasizing the function of the written form requirement, “to make the employee aware of the termination and also to draw the declarant’s attention to the importance and delicacy of the manifestation of will contained in the statement,” held that, in this case, “the expression of the will to terminate the relationship transferred into a written report signed by both parties fulfilled the functions connected with the form requirement.”

The Supreme Court, for its part, identified the question of law in the exact scope to be attributed to the suspensive condition “if the attempt at conciliation fails” contained in section 7, Law no. 604/1966, to which the notice of dismissal by the employer is subordinate. In other words, according to the Supreme Court, it is necessary to establish whether the law intended to attribute importance, by means of this formulation, to the “objective fact of the failure of the attempt at conciliation” or “to the chronological and formal fact of the closure of the report drawn up” during the conciliation meeting. The Supreme Court, opting for the first of the two hypotheses, clarifies that the wording of the law provision does not require that the notice of dismissal, allowed to the employer “if the attempt at conciliation fails,” takes place in a different context and subsequent to that of the minutes signed “in an institutional seat” such as in the case of conciliation, and this because, without prejudice to the observance of “further requirements on the subject of dismissal, starting with the written form pursuant to section 2, paragraph 1, of Law no. 604/1966,” no “need to protect the interests of the employee could plausibly justify” a provision to that effect.

In this case, the Court concludes that the notice of dismissal served after the failure of the attempt at conciliation, “expressed in a report ‘signed by both parties’ and ‘undoubtedly in writing’“, is “unquestionably” in accordance with law.

Key Action Points for Human Resources and In-House Counsel

Practical Points

• The notification of dismissal occurred after the failure of the settlement attempt ex Section 7, Law no. 604/1966, and was expressed in the minutes executed by both parties, undoubtedly in written form, which is fully valid as it complies with the requirement to communicate the dismissal in writing.
• The wording of Section 7, Law no. 604/1966 does not require that the notice of dismissal take place in a different context and subsequent to the signing of the minutes of the meeting to attempt the settlement.