The system of increasing protection for dismissals with formal or procedural vices has been declared unconstitutional

Prepared by Francesca Tironi, Lorenzo Zanotti and Valentina Panettella

By press release of June 25th, 2020, the Constitutional Court announced that article 4, Legislative Decree no. 23/2015, was deemed unconstitutional in the part in which, with reference to the determination of the compensation to be paid to the employee in the event of a dismissal which is unlawful due to formal or procedural reasons, it provides that it must be “equal to one month’s salary of the last reference salary for the calculation of the severance pay for each year of service“.

Such criterion, characterized by a rigid and automatic system of calculation, is exclusively based on the parameter of seniority of service, and provides, de facto, for a uniform compensation measure which is unrelated to the specific features and differences of the specific case.

Although the motivations of the judgment will be only issued in the coming weeks, the decision seems to follow what has already been decided by the Constitutional Court in its judgment no. 194/2018, with reference to article 3, paragraph 1, of Legislative Decree no. 23/2015.

On that occasion, the mechanism for the quantification of the indemnity, almost similar to that provided for by article 4 of Legislative Decree no. 23/2015, was deemed unconstitutional because it was unsuitable to subjectively quantify the amount of the damage suffered by the worker, thus assuming the connotations of a “forfeited and standardised” payment.

Such decision, indeed, could also be justified by the need to personalize the damage, which is imposed by the principle of equality according to which “equal situations must be treated equally, while different situations must be treated differently”.

From this point of view, it is reasonable to assume that, in line with what the Constitutional Court has already ruled in the above mentioned decision, the judge will have greater discretion and will be asked to determine, from time to time, the compensation due to the unlawfully dismissed employee, to be determined within the minimum limit (two months’ salary) and the maximum limit (twelve months’ salary) provided for by art. 4, Legislative Decree no. 23/2015. In this respect, in addition to the seniority of the dismissed employee within the company, also the traditional parameters provided by the law, which include the number of employees, the size of the business, and the behaviour and conditions of the parties, will be taken into consideration.

Indeed, a rigorous and automatic criterion, that provides for an unjustified homologation of different situations, cannot be accepted in a system of compensation of damages which is based, on the contrary, on the recognition of an adequate parametric compensation by valuing the effective damage suffered by the injured party.

Let’ talk

For a depeer discussion please contact:

Francesca Tironi

PwC TLS Avvocati e Commercialisti

Associate Partner

Lorenzo Zanotti

PwC TLS Avvocati e Commercialisti