Italy: Jobs Act provisions on protections in the event of dismissal deemed by Council of Europe committee to breach the European Social Charter

The European Committee of Social Rights, which monitors respect of the European Social Charter by member states of the Council of Europe, has ruled in favour of Italian trade union CGIL, which alleged in a complaint brought forward in 2017 that the compensation mechanisms provided for by the 2015 Jobs Act, in the event of unfair dismissal, did not allow for workers affected to obtain adequate compensation. In its decision on the merits of the complaint, adopted on 11 September 2019 and published on 11 February 2020, the Committee takes the view that there was indeed a breach of Article 24 of the Charter. “In the case of unlawful dismissal […], the victim has the choice between two options for compensation for material damage – judicial or extra-judicial – which are capped and do not cover the financial losses actually incurred from the date of dismissal,” the decision reads. The Committee considers that “neither the alternative legal remedies offering a worker who is victim of unlawful dismissal the possibility of compensation beyond the upper limit provided for by the law in force, nor the conciliation mechanism […] make it possible in all cases of dismissal without just cause to obtain adequate compensation, proportionate to the damage suffered and discouraging of recourse to unlawful dismissal”. The CGIL expressed its satisfaction with the decision and said it is now time to “rethink the regulation of dismissals, asking not what the most favourable regime for companies is, but what the most adequate protections for workers are”. The Committee’s decision further undermines the legal basis of the Jobs Act, whose main innovation was to facilitate individual dismissals by instituting an open-ended contract “with increasing protection”. Several Italian courts have referred cases to the country’s Constitutional Court and the European Court of Justice to understand whether certain measures of the Jobs Act may be discriminatory in the case of collective dismissals (see article n°11531).