Dismissals’ ban: between doubtful constitutionality and compliance with European law

Prepared by Francesca Tironi, Alessandro Ferrari and Valentina Panettella

With our previous newsletter concerning the discussed issue of dismissals’ ban (https://blog.pwc-tls.it/it/2021/01/28/nullita-del-recesso-del-datore-di-lavoro-in-violazione-della-normativa-sul-blocco-dei-licenziamenti/), the Court of Mantova’s ruling no. 112/2020, which stated the nullity of the employer’s termination in violation of the dismissals’ prohibition laid down in Article 46 of Law Decree no. 18/2020, was analyzed.

The issue of the dismissals’ ban has been several times addressed by the interpreters, who have repeatedly stressed that Article 41 of the Italian Constitution could have been infringed, on the assumption that such a prohibition would excessively restrict the entrepreneur’s financial and organizational freedom.

As proof of the delicacy (and complexity) of the issue, the Iberian judge has recently come up with considerations diametrically opposed to those of the Italian one which, also in view of the topicality of the subject, deserve an adequate in-depth examination. In fact, the Court of Barcelona, with its sentencia n. 283/2020, Juzgado de lo Social N°. 1 de Barcelona, affirmed that the dismissals’ ban (prohibición de despido) laid down in the Real Decreto-Ley no. 9/2020, which has been extended several times (as happened in Italy), has to be considered disrespectful of EU law.

More in detail, the Catalan Court, by dealing with the matter of dismissals for financial reasons due to the ongoing pandemic, after having recognized the lawfulness of the dismissal in the specific case, focused on the adequacy of the legislative choice to reiterate the said ban. In this regard, while appreciating the virtuous aim behind the introduction of the law provision, the judge focused on the demonstrated ineffectiveness of its extensions, as well as on its contrariety, not only to Spanish constitutional law, but also to EU principles.  According to the judge’s assessment, the freedom to conduct a business (contained in Article 38 of the Spanish Constitution, Article 3(3) of the Treaty on European Union and Article 16 of the Charter of Nice), undermined by the dismissals’ ban, is a prerogative of such importance that its infringement must lead to the disapplication of the emergency national law on the ground of its unlawfulness with respect to European law.

Whether or not the reasoning of the said ruling can be agreed, it must be nevertheless acknowledged that the same judgement has been the first in Europe to question the compatibility of the reiteration of the dismissals’ ban with EU law. The legislative provision in question, although probably “obliged” by the emergency situation linked to the spread of the Covid-19 virus, actually alters the balance – already quite sensitive – between the entrepreneur’s financial and organizational freedom on the one hand, and the opposing need to safeguard employment on the other.

In conclusion, without wishing to dwell here on an issue, the one in question, which deserves much more in-depth considerations, we deem it interesting at least to note that the ruling in question relies on the “Spanish” dismissals’ ban which, differently to the Italian one, is limited to dismissals for financial reasons closely related to the effects of the pandemic situation and announced within six months after the use of a shock-absorber. Well, if in the case at hand it has been stated that the national provision has to be considered in contrast with European law, how could a law provision – the Italian one – whose scope is much wider (and, conversely, much more restrictive for employers) be considered respectful of the European law? In this sense, it will be interesting to see whether the national case law will be influenced by what has been said so far or will continue to legitimize the work of the Italian legislator, at least until March 31st 2021.

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Francesca Tironi

PwC TLS Avvocati e Commercialisti