Constitutional Court: the mere compensation remedy in collective redundancies is lawful

Italian employment law currently provides for two different regimes when it comes to remedies for violation of rules on selection criteria in collective redundancies: (i) reinstatement for employees hired before March 7, 2015; and (ii) a financial compensation, ranging from 6 to 36 months of pay for employees hired since March 7, 2015.

In fact when remedies against unfair dismissals were changed in March 2015 – so-called Jobs Act – it was decided that the new remedies would be applicable only to employees hired after the entry into force of the new provisions.

As a consequence of the 2015 reform, two different regimes and remedies apply depending exclusively on date of hire of the employee dismissed, so two employees dismissed in the context of the same collective redundancy procedure may benefit from different remedies; this was challenged before the Constitutional Court.

However, in Judgment No. 7 dated January 22, 2024, the provision of different sanctions for the same violation, depending only on the date of hire, has been deemed lawful by the Constitutional Court, as it appears not to violate the principle of equality.

In fact, it responds to the Italian Legislator’s discretion to provide for the reinstatement protection only for those employees hired before March 7, 2015, while limiting the application of the new rules to those hired since that date, with the aim of encouraging their employment.

Moreover, the Constitutional Court has confirmed the compensation remedy to be adequate, discouraging and suitable to balance the different interests at stake, being also reliable.

Lastly, the Constitutional Court is hoping for the Italian Legislator to carry out a broader review of the sanctions for unlawful dismissals, which are currently divided in different regimes. The firm Toffoletto De Luca Tamajo is available for any needs and/or clarification you may need.

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