A recent Supreme Court decision (Decision 22798/16) found that an employer can dismiss an employee for economic reasons only if he or she cannot be assigned to a different role in the company. In particular, the court affirmed that a role offered as an alternative to dismissal can require an employee to perform lower-grade tasks than previously.

The decision follows the important precedent set in Decision 7755/98, which allowed an employer to dismiss a disabled employee who was unable to perform her duties, as no other role was available in the company.

Before Decision 7755/98, Italian case law generally prevented employers from offering employees a lower-level role as an alternative to individual dismissal for economic reasons. This ban aimed to protect the professional skills of employees and was based on Article 2103 of the Civil Code, which declared null and void any agreement between an employer and an employee concerning the assignment of the employee to a lower-level role.

With Decision 7755/98, the Supreme Court set the general principle under which the maintenance of an employment relationship takes precedence over other legal protection granted to employees, such as protecting an employee's professional abilities. Italian case law states that, in the case of redundancy, an employer must confirm the possibility that an employee facing dismissal for economic reasons can be assigned to a different role in the company, without concern for maintaining the employee's professional skills.

Applying the general principle of Decision 7755/98 to Decision 22798/16, the Supreme Court affirmed that an employer must offer an employee facing dismissal for economic reasons a different role in the company, even at a lower level than his or her previous role. If an employer fails to offer an employee an alternative role that is available in the company, the individual dismissal for economic reasons can be challenged and the employee can refuse to accept the role available as an alternative to dismissal.

Article 2103 of the Civil Code, as modified by the Jobs Act in 2015 (Decree-Law 81/2015), confirmed an employer's duty to offer an employee facing dismissal for economic reasons an available role at a lower level. According to the new Article 2103, an employer and an employee can reach an agreement with unions or public offices, under which an employee accepts a role at a different level and salary in order to:

  • maintain his or her employment;
  • acquire different skills; or
  • improve his or her quality of life.

Therefore, the previous ban on agreements concerning the assignment of employees to lower-level roles has been relaxed.

For further information on this topic please contact Andrea Stanchi at Stanchi Studio Legale by telephone (+39 02 546 9522) or email (a.stanchi@stanchilaw.it).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.