The Supreme Court confirms: less restrictions to dismissals if the misconduct is serious

According to the decision No 1403 issued on 31 January 2012 the Italian Supreme Court confirmed the following principle: an employee who seriously breaches his employment contract in a way that permanently jeopardises the fiduciary relationship with the employer may be properly dismissed with no need for the employer to fully comply with the guarantees set out under Art. 7 of the Workers’ Statute (Law No 300/70).

In particular, according to the above decision a serious breach of the employment contract may be sanctioned with a disciplinary dismissal even if such misconduct was not specifically ruled in the company’s disciplinary code and if the disciplinary code was not posted in company’s premises, as expressly required by Art. 7 of the Workers’ Statute. As you may appreciate, the above principle is even more important for the employment contract of executives, who generally have a stronger fiduciary relationship with the employer which could be more easily breached by a misconduct.

In practice, the Italian Supreme Court confirmed a principle that was contained in a previous decision issued on 19 December 2006 (No 27104), which had already changed the prevailing case law until that time, according to which a disciplinary dismissal to be valid required the full compliance with the above mentioned Art. 7.

The case at stake concerns a disciplinary dismissal served on an executive of a bank who made administrative irregularities and infringed the Consob (the Italian Supervisory Authority for the investor’s protection) regulations. Amongst other things, the employee challenged the disciplinary dismissal for the following reasons: the bank’s policies, rules and regulations should have expressly indicated all the misconducts which could bring to a disciplinary dismissal and should have been posted by the employer in bank’s premises. Nevertheless, the Supreme Court confirmed the regularity of the dismissal served, as the executive’s misconducts were so serious that they fatally and irremediably jeopardised the working relationship. As a consequence, according to the judges it was not necessary to comply with all the guarantees set out by the Workers’ Statute.

In other words, this decision confirmed a major flexibility for the employer (and a lower protection for the employee) specifically in the case of executives’ disciplinary dismissals. On the other hand, it remains firm the duty of the employer to comply with the disciplinary procedure which provides that a prior disciplinary warning must be given to the executive before serving the dismissal, in order to grant him the right to justify his conduct.