Introduction
Arguments
Supreme Court of Cassation decision
Comment



Introduction

The directors of a credit company placed under extraordinary administration for serious irregularities learned that an employee had covertly given the company's former general manager some confidential company documents, which he had had no reason to access. In particular, the directors discovered that the employee, with the help of another employee and in secret, had given the former general manager an appraisal of the value of a property owned by third parties.

The directors only become aware of this fact indirectly and some months later after the Public Prosecutor's Office had tapped the general manager's phone as part of criminal proceedings.

The employee was subsequently subject to internal disciplinary proceedings and dismissed for a serious breach of the obligation of loyalty to her employer.

The employee challenged the dismissal as illegitimate in a district court and the Court of Appeal. However, the Court of Appeal rejected her claim on the ground that her conduct had constituted a serious breach of the obligation of loyalty and confidentiality generally imposed on all credit institution employees and was therefore of such gravity as to justify her dismissal.

The employee appealed this sentence to the Supreme Court of Cassation.

Arguments

The employee argued that her dismissal had been unjustified based on the following grounds:

  • The Court of Appeal had based its assessment of the employee's conduct on phone conversations recorded as part of criminal proceedings against the bank's former general manager, but the employee argued that the recordings should not have been used in relation to her dismissal and therefore the allegations about her conduct should have been regarded as unsubstantiated.
  • She had not breached her obligation of loyalty to her employer, as the only obligations imposed on her in that regard were those in Article 2105 of the Civil Code, which sets out that employees should not:
    • conduct business on their own behalf, on behalf of third parties or in competition with their employer; and
    • disclose information concerning a company's organisation or production methods or make use of them in such a way as to be prejudicial to the employer.
  • Delivering an expert report relating to a property owned by third parties did not fall within these categories and had caused no damage to the employer.
  • The dismissal was an excessive and disproportionate penalty for such conduct and contradicted the fact that her employer had not punished similar conduct by other employees in the past.

The company instead argued that the employee's dismissal and the Court of Appeal's decision had been justified based on the seriousness of the employee's conduct.

Supreme Court of Cassation decision

The Supreme Court of Cassation found that the arguments of the company and the Court of Appeal were correct and stressed that:

  • the employee's conduct could be proven independently of the phone tapping of the former general manager because the employee had essentially admitted her conduct during the disciplinary proceedings which preceded her dismissal; the question of the usability of the phone recordings was therefore to be considered irrelevant;
  • the employee's conduct constituted a serious breach of her obligations of loyalty to her employer, as according to case law interpreting the Civil Code, an employee must refrain not only from the conduct expressly prohibited by Article 2105 of the code, but also from any conduct which conflicts with their duties or the company's aims and interests or that is likely to irreparably damage the fiduciary character of the employment relationship; and
  • the employee's conduct should be considered serious enough to justify her dismissal due to the irreparable damage to the relationship of trust with her employer, which is of particular importance for credit institution employees and must be assessed with particular rigour and regardless of the existence of actual damage to the employer.

The Supreme Court of Cassation thus definitively rejected the employee's claims and ordered her to pay the costs of the proceedings.

Comment

Italian jurisprudence has on several occasions offered extensive and rigorous interpretations of employees' obligations of loyalty and confidentiality towards their employers. This rigour is even stricter for employees of credit institutions. Judges have often stated that the conduct of such employees must be such as to guarantee the employer full reliability and transparency and must not counter the trust that the public grants to banking institutions based on the fairness and loyalty of employees thereof.

For further information on this topic please contact Sergio Passerini at Ichino Brugnatelli e Associati by telephone (+39 02 48193249) or email ([email protected]). The Ichino Brugnatelli e Associati website can be accessed at www.ichinobrugnatelli.it.