Supreme Court defines limits of immunity of foreign states from Italian jurisdiction in employment lawsuits

On 8 March 2019 the Supreme Court (joint chambers) decided a labour litigation case filed by an Italian employee of the British Council who wanted to claim outstanding salary. The court affirmed the principle that the exoneration from Italian jurisdiction of foreign states and entities that, in a broad sense, hold the status of bodies of a foreign state (a customary rule of international law) meets a double limit in the field of labour relations for disputes concerning employment relationships unrelated to the entity's institutional functions and organisation and when a claim with exclusively patrimonial content is raised.

In the case at hand, an Italian employee sued his employer, the British Council, challenging the lawfulness of his fixed-term employment contracts that were converted into an open-ended contract and claiming outstanding salary. Revising a first-degree decision, the Court of Appeal affirmed Italian jurisdiction as the employment relationship had started and been performed in Italy under Italian employment contracts.

The British Council appealed the decision before the Supreme Court, citing its status as a public body belonging to the British government and its institutional objective to diffuse the English language and British culture. Therefore, the British Council claimed that it was immune from Italian jurisdiction according to the customary rule of international law and the convention between Italy and the United Kingdom of 28 November 1951.

The Supreme Court rejected the British Council's claim, citing Italian and international case law on 'strict immunity', according to which immunity does not operate when the acts performed by a foreign international entity in another state are unrelated to the exercise of sovereign power. Instead, a balance must be struck between the opposing needs of protecting the sovereignty of the state and the right of the individual to access justice, as indicated by European Court of Human Rights jurisprudence.

Moreover, the Supreme Court cited its jurisprudence, according to which the Italian courts retain jurisdictional power in employment lawsuits against international law entities or bodies (immune from Italian jurisdiction) where the labour disputes are unrelated to institutional functions and the organisation of the entity or body, as there is no interference with the sovereign powers of the state to which the institution belongs.

For further information on this topic please contact Francesco Pedroni at Stanchi Studio Legale by telephone (+39 02 546 9522) or email (f.pedroni@stanchilaw.it).