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17 October 2012
Labour Minister Elsa Fornero's recent reform has introduced many important changes (for further details please see "Fornero labour reform at a glance"), including with respect to dismissals.
The term within which to appeal a dismissal in court has been modified. A mandatory 180-day term has been introduced in place of the previous 270-day term. In particular, the dismissal must be appealed within 60 days of written communication of the dismissal or written communication of the reasons for dismissal. The appeal is ineffective if it is not pursued within 180 days, by depositing the action with the court. One of the most debated aspects of the reform is Article 18 of the Workers Statute, the structure of which has been significantly revised.
The reform has not changed the definition of justified dismissal or objective justified reason. A 'justified dismissal' is defined by Article 2119 of the Civil Code as a cause for dismissal so serious that it does not allow the relationship to continue, even temporarily. An 'objective justified reason' is defined by Article 3 of Law 604/1966 as a dismissal on the grounds of an employee's non-fulfillment or serious breach of contract, or due to reasons related to the business activity and its proper operation.
The new structure of Article 18 provides for various consequences regarding different reasons for unfair dismissal.
The law provides a safeguard in the case of discriminatory and void dismissal. The employer must reinstate the employee and pay the amount of salary accrued from the date of dismissal to the date of the effective reinstatement. This must be no less than five months' salary once earnings from other work undertaken following the dismissal, if any, have been deducted. In addition, the employee is entitled to have his or her National Insurance contributions paid by the employer. The employee can opt to substitute the reinstatement for an indemnity of 15 months' salary, in addition to the damages. This standard applies to:
The standard is also applicable to managers, regardless of the size of the firm.
If the reason given for dismissal is unsubstantiated, or if the national collective labour agreement or disciplinary code provide for a lesser penalty, the employer must reinstate the employee and pay up to 12 months' salary, once earnings from other work undertaken after the dismissal have been deducted. Moreover, the employee is entitled to have his or her National Insurance contributions paid by the employer. The employee can substitute reinstatement for an indemnity of 15 months' salary, in addition to the damages. In all other cases of subjective justified reason or just cause absence, the employee must be paid between 12 and 24 months' salary.
In cases where there are errors in the procedure or grounds for dismissal, the employee must be paid between six and 12 months' salary.
Dismissal due to an objective justified reason occurs when:
In all these circumstances, the safeguard applies and the employer is obligated to reinstate the employee and pay up to 12 months' salary once earnings from other work undertaken after the dismissal have been deducted. Moreover, the employee is entitled to have his or her National Insurance contributions paid by the employer. The employee can substitute reinstatement for an indemnity of 15 months' salary, in addition to the damages. In all other cases, the employee must be paid between 12 and 24 months' salary.
Discriminatory and void dismissal provisions also apply to managers, regardless of the size of the employer. Other dismissal requirements regarding subjective justified reason or just cause, errors in procedure or grounds for dismissal and dismissal for objective justified reason, apply to employers with more than 15 employees.
It is possible for the employer to revoke a dismissal within 15 days from its notification of the employee's decision to appeal the dismissal. In this case, the work relationship will continue without interruption and the employee will be paid the accrued amount of salary from the dismissal date to the effective reinstatement date.
Finally, a mandatory special procedure has been introduced in relation to dismissal cases under Article 18 and where a matter of work relationship qualification is at issue. The new procedure, to be concluded within one year, will aim to minimise the formalities in order to reduce trial terms and to promote the effectiveness of the parties' discussion.
The steps include:
A relevant trial provision has been introduced by the Decreto Sviluppo.(1) The new law introduced Article 348bis of the Civil Procedure Code. Under the new law the appeal of the dismissal must be declared inadmissible where the court finds that there is no reasonable likelihood it will be upheld. This provision filters appeals, and may work as a deterrent in going to trial, saving in terms of both costs and timing.
For further information on this topic please contact Andrea Stanchi or Annamaria Pedroni at Stanchi Studio Legale by telephone (+39 02 546 9522), fax (+39 02 551 91641) or email (email@example.com, firstname.lastname@example.org or email@example.com).
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