Collective dismissal: the provisions to be respected in the relevant procedure

Prepared by Francesca Tironi, Sara Tanieli and Paola Dell’Utri

With judgment no. 15119/2021, the Italian Supreme Court has dealt with collective dismissal and the relevant procedure, stating the following important principles:

  1. the communication to be transmitted at the end of the collective dismissal procedure shall contain the list of dismissed employees, a precise indication of the manner in which the criteria for choosing the employees to be made redundant were applied and the scores attributed to each of the employees on the basis of the aforementioned criteria;
  2. breach of the seven-day deadline for sending the notice invalidates the dismissal;
  3. the employees to be dismissed must be identified by comparing the employees of the entire company.
The facts under examination

In its judgment, the Italian Supreme Court upheld the ruling of the Court of Appeal of Catania, which, by reforming the judgment of first instance, had annulled the dismissal of an employee by a company and had ordered the company to reinstate the employee in his job and to pay him an indemnity of ten months’ salary of the last full salary.

In particular, the case that gave rise to the Supreme Court’s ruling is as follows: an employee, dismissed as part of a collective dismissal procedure, had challenged the dismissal and then appealed to the judge in order to ascertain and declare the unlawfulness of the employer’s measure for the alleged failure to comply with the selection criteria provided for under Article 5 of Law 223/91. More specifically, the employee complained that the documents relating to the scores awarded to the employees were not intelligible and likewise alleged that the dismissal was based on limitations on the choice of employees to be made redundant only for certain geographical areas rather than considering the entire company at national level.

At first instance, the judge rejected the employee’s appeal against the dismissal, considering the termination as lawful because, according to the judge, the notice initiating the mobility procedure clearly indicated the reasons grounding the redundancy, the company units to be removed and the professional profiles of the employees. Similarly, the final communication, pursuant to Article 4(9) of Law no. 223/91, indicated the company units to be removed (divided according to the company’s territorial areas), and the list of dismissed employees (although the names were obscured), with their respective data, as well as the selection criteria and the related application methods, where it was made clear that, within each geographical area (identified “in application of the criterion of technical and organizational needs“), the criteria of family loads and company seniority had been applied.

Moreover, according to the court of first instance, if it is true that the identification of the staff to be dismissed was carried out for individual geographical areas (rather than on a national scale), it is equally true that the entire network of employees was involved in the collective redundancy procedure; it follows that, according to the Court, there was no limitation in the choice of employees to be dismissed only for certain geographical areas.

On this point, the Court of first Instance had observed that, in any case, considering all the Company’s employees employed at national level, the employee in question would have been dismissed on the basis of the points held, so that it had to be considered that he had no interest in bringing the proceeding In question.

As mentioned above, the Court of Appeal of Catania, before which the case was brought by the employee, overturned the ruling of the Court of first instance and declared null the dismissal of the employee in question.

The company then appealed to the Supreme Court, which ruled on the matter with the ruling in question.

Grounds of the judgement

In its ruling no. 15119/2021 referred to above, the Italian Supreme Court observed that the communication to be sent, at the end of the procedure for collective dismissal, to the competent Regional Labor Office and maximum employment, to the Regional Employment Commission and to the trade associations as provided for by article 4, paragraph 9, Law no. 223/91, as aimed at allowing employees, trade unions and administrative bodies concerned to check the correctness of the comparison between employees, shall include, in addition to the list of dismissed employees, a precise indication of the manner in which the criteria for selecting the employees to be dismissed were applied and, therefore, a complete indication of the list (by name) of employees and the scores awarded to each of them, elements which were lacking in the case under consideration.

Secondly, the Italian Supreme Court reminded that the seven-day deadline for sending the above-mentioned communication is mandatory and that its breach causes the unlawfulness of the dismissal, irrespective of whether the employees subsequently had known all the elements that the communication must have. Lastly, the Supreme Court specified that, pursuant to Article 5 of Law 223/91, the employees to be dismissed shall be identified by comparing the employees not of a single production unit but of the entire company, “in view of the need to broaden as far as possible the area in which the choice is to be made, in order to provide suitable guarantees against the danger of discrimination to the detriment of individual employees, which is all the more likely to occur the more the scope of the selection is restricted“.

Let’s Talk

For a deeper discussion, please contact:

Francesca Tironi

PwC TLS Avvocati e Commercialisti