Sometimes there's no alternative but to dismiss an employee for poor performance. This article sets out the circumstances in which dismissal for poor performance can be effected under Italian employment law and it highlights some similarities and differences with other European jurisdictions.

By: Lorenzo Gelmi

Firm: Toffoletto De Luca Tamajo e Soci

In Italy it is possible to dismiss an employee for poor performance and an employee’s performance is an important criterion for assessing whether he or she has properly carried out their duties under their employment contract.

During the 1980s, the Italian Supreme Court began to establish a principle according to which a material breach by employees of their contractual obligations constituted a justified reason for dismissal, particularly if the breach committed consisted in the inadequate performance of the employee’s duties to the detriment of the success and development of the company’s business. However, in practice, when the Italian courts are faced with a case, they tend to restrict the scope of lawful dismissal based on poor performance.

The major precedent-setting case, in Italy, recently confirmed by the Supreme Court  (judgment n. 26676 of 10 November 2017) only considers termination based on poor performance to be fair if the Company is able to prove two different elements:

  • There is a significant gap between the employee’s productivity and the average productivity of his or her colleagues with similar professional classification levels and duties;
  • This productivity gap is a result of the employee’s negligence. As a consequence, if the employee’s poor performance is at least partially attributable to the way the company organises working practices or to social or environmental factors, then dismissal for poor performance may be deemed unfair.

Dismissing an employee for poor performance is also possible in other European countries, with varying levels of difficulty. For example, in France and the Netherlands, employers must not only prove an employee’s poor performance and the level of negligence that has caused it, but must also have attempted every possible solution (including the organisation of training courses) to improve the dismissed employee’s productivity. On the other hand, there are countries such as Switzerland and Belgium in which dismissal for poor performance poses lower risks for the employer, as there is no requirement to demonstrate the productivity gap between the employee’s performance and the average performance of colleagues with similar professional classification levels and duties.