October 7, 2024
Dismissal during the Probation Period Dismissal of an Executive during Probation
Court of Arezzo
An executive was hired in September under a contract that included a six-month probation period. However, after seven weeks of actual work, the company decided to terminate his employment due to failure to pass the probation. The company explained the dismissal by citing differences in views with the commercial management and the executive’s failure to demonstrate the necessary skills for the role. The executive challenged the dismissal in court, but the Tribunal sided with the company.
The judge emphasized that there is no predetermined minimum duration for a probationary period to be considered appropriate. For the probation period to be adequate, it must allow the worker to perform the duties for which they were hired, as was the case here, and enable the employer to gather sufficient evidence to evaluate the individual’s professionalism.
The court thus declared the dismissal lawful, considering that one and a half months was sufficient to assess the executive’s qualities.
July 23, 2024
Settlement, Conciliation, and Mutual Termination Exit Incentive and Special Regime for Returning Workers
Italian Revenue Agency
A bank requested clarification from the Italian Revenue Agency regarding the applicability of the special regime for returning workers (Art. 16, Legislative Decree No. 147/2015) to exit incentives and settlement payments. Specifically, the bank, after reaching a mutual termination agreement with three employees, committed to paying them sums as exit incentives and settlement payments, totaling over one million euros. The bank asked if these amounts were subject to the separate taxation provided by Articles 17 and 19 of the Consolidated Income Tax Act (TUIR) according to the ordinary criteria or if they could benefit from the reduced taxable base provided for returning workers.
The Agency initially clarified that the law stipulates that termination payments exceeding one million euros are subject to ordinary taxation (Art. 24, paragraph 31, Legislative Decree No. 201/2011). As for the question, the Agency clarified that the special regime for returning workers does not apply to income subject to separate taxation. However, the amount exceeding one million, due to its being subject to ordinary rules, may benefit from the reduced taxable base for returning workers.
October 14, 2024
Social Security and Contributions Damages from the Incorrect Issuance of Asbestos Exposure Certificate
Italian Supreme Court, Labor Section
A worker brought a case against INPS and INAIL, as, based on an asbestos exposure certificate erroneously issued by INAIL, she had terminated her employment in anticipation of retirement, which the Institute later revoked.
The Supreme Court ruled in favor of the worker, stating that, when INPS provides an incorrect indication of the contributory status and the worker loses their job based on such erroneous information, the social security entity is liable for the damages suffered by the individual for the failure to secure pension rights, constituting contractual liability based on the breach of the legal obligation on public entities, which possess investigative and certification powers, not to compromise the trust of those seeking essential life benefits.
October 7, 2024
Executives Duty of Loyalty and Just Cause for Dismissal
Italian Supreme Court, Labor Section
An executive was dismissed for taking the role of managing director at another company, of which he was also a shareholder. The executive contested the dismissal. Both the Tribunal and the Court of Appeal rejected his claim. Upon reaching the Supreme Court, the judges upheld the previous decisions.
The Supreme Court emphasized that the duty of loyalty must be interpreted considering the standards of correctness and good faith, even in off-duty conduct. The duty of loyalty, the Court reiterated, can be violated by any conduct that could compromise the trust within the employment relationship or that may conflict in any way with the company’s interests. There is no need for the employer to suffer direct economic damage; a potential risk of harm is sufficient.
The Court thus confirmed the validity of the executive’s dismissal.
October 9, 2024
Compensation and Benefits Only Protected Agreements Allow Salary Reduction
Italian Supreme Court, Labor Section
A company and an executive signed an agreement that provided for a 10% salary reduction; later, the executive resigned for just cause and challenged the signed agreement in court.
The Court of Appeal declared the salary reduction agreement null because it was signed in violation of mandatory rules (as stipulated by Art. 2103 of the Civil Code), which require the agreement to be executed in a protected setting. The Supreme Court upheld the decision, clarifying that an agreement where the executive consents to a salary reduction must be signed in one of the legally protected settings, even if the change does not accompany a modification of duties.
August 1, 2024
Just Cause Dismissal Dismissal for Just Cause is Unlawful if the Employer Cannot Prove the Violated Company Policy
Italian Supreme Court, Labor Section
An employee was dismissed for just cause based on allegations of violating a company policy requiring the immediate delivery of lost property from clients to the person in charge of the establishment and refusing to cooperate with the company’s security officer who contacted him to reconstruct the incident. The employee challenged the dismissal.
The Supreme Court ruled in favor of the employee, stating that a dismissal for just cause is unlawful if the employer cannot prove the company policy allegedly violated by the employee.
July 23, 2024
Just Cause Dismissal Just Cause Dismissal is Lawful Even if the Execution of Unlawful Procedures Was Tolerated by Superiors
Italian Supreme Court, Labor Section
An employee was dismissed for just cause following a disciplinary procedure where he was accused of signing false purchase orders for goods paid for by the company but never received, in clear violation of company procedures. The employee, after acknowledging the facts, justified his behavior by claiming that it was a known and tolerated practice (even imposed) by his superiors.
The Court of Appeal, overturning the first instance judgment, rejected the employee’s challenge to the dismissal, holding that the conscious unlawfulness of the conduct justified the dismissal. The Court also clarified that even if a superior had ordered the unlawful conduct, it would not have justified it, as the subordinate’s position is not one of subjection to a superior authority in a public sense: in other words, he could and should have refused and reported the situation to the company’s top management.
The Supreme Court confirmed the decision and its reasoning, thus validating the dismissal.rker.
The ruling, in favor of the employee, highlighted that the concept of health (protected by law) can no longer be defined as the “mere absence of disease or infirmity” but must be understood as a “state of complete physical, mental, and social well-being.”
