The different systems of penalties provided for in cases of illegitimate collective dismissals, before and after the so-called “Jobs Act” entered into force on 7 March 2015, is notably problematic. The Court of Naples therefore, has asked the European Court of Justice and the Italian Constitutional Court to weigh-in on this matter.
Under the Italian discipline of collective dismissal, Article no. 5 of Law no. 223/1991 provides that the selection of employees to be made redundant within a given group subject to reorganisation, should be made on the basis of the “selection criteria” laid down in collective agreements or provided by the Law, to be applied in combination with each other:
- family burden;
- length of service;
- technical, productive and organisational needs of the company.
In the event that a collective dismissal is notified in violation of the abovementioned “selection criteria”, two different systems of sanctions could apply, depending on the hiring date of the dismissed employee:
- in case of employees hired with an open-ended employment contract before 7 March 2015, Article 5 of Law no. 223/1991 provides for the consequences referred to in Article 18, par. 4 of Workers’ Statute (i.e. reinstatement of the employee, in addition to the payment of wages from dismissal to reinstatement up to a maximum of 12 monthly installments);
- adversely, in case of open-ended employment contracts (the so-called “contracts with proportionate protection”) signed after 7 March 2015, pursuant to Article 10 of Legislative Decree no. 23/2015, the only possible remedy would be a compensation equal to 2 monthly installments for each year of service within a minimum of 6 and a maximum of 36 monthly installments.
The questions raised by the Court of Naples are similar to those posed to the European Court of Justice by the Court of Milan, in August 2019.
Case Analysed by the Court of Naples
The case involved a female employee who was transferred to another company following the transfer of the tender contract with the contractor. The employee was eventually dismissed through a collective dismissal procedure, together with eight other employees.
The female employee challenged her dismissal in court and questioned the recognition:
- of the violation of the “selection criteria” provided by art. 5 of Law 223/1991;
- of the protection regime of reinstatement, highlighting that the applicable NCBA provided the application of art. 18, par. 4 of Workers’ Statute (i.e. reinstatement of the employee, in addition to the payment of wages from dismissal to reinstatement up to a maximum of 12 monthly installments).
Issue raised by Court of Naples before the European Court of Justice and Italian Constitutional Court
The Court of Naples, by rulings of 18, 2019, referred the case to the European Court of Justice and to the Italian Constitutional Court, to evaluate the compatibility of Article 10 of Legislative Decree no. 23/2015 which, as mentioned above, provides only for an indemnity protection for employees hired after 7 March 2015 with European principles of equality, reasonableness and non-discrimination, as provided for by the “Charter of Fundamental Rights of the European Union”, EU Directive 99/70/CE, EU Directive 98/59/CE and by Articles. 20, 21, 30, 34 and 47 of the Italian Constitution.
In the questions raised before the European Court of Justice and the Italian Constitutional Court, the Court of Naples contends that the coexistence of two different sanctioning regimes for cases of illegitimate collective dismissals, has caused significant problems regarding:
- the adequacy and effectiveness of the protection against illegitimate dismissals;
- the difference in treatment (reinstatement vs only compensation) between employees hired before or after 7 March 2015; and
- excessive delegation.
We are closely monitoring this situation and will inform you once these two courts have released their respective interpretations on this matter.