Lawful dismissal for objective justified reasons even without losses by Paola Gobbi e Silvia Fumagalli Through court ruling no. 29238, dated December 6th 2017, the Court of Cassation has confirmed that a dismissal for economic reasons is lawful even if the company is not running at a loss, by recognizing the validity of reorganization as for a justified reason of dismissal. The Court of Cassation has stated again about objective justified reasons for dismissal, confirming case law, which deems, in case of dismissal for economic reasons, the negative economic situation of the company not a fact to be necessarily produced and proved by the employer. Lawful dismissal only requires that the reasons related to production and work organization, also aimed to achieve a more efficient management or a higher profitability for the company, cause an actual change of the organizational set-up, through the abolition of a job position. What matters is that the reorganization is the reason at the origin of the dismissal and is not its consequence and that there is a balanced causal link between the choice of the entrepreneur to reorganize his/her company and the dismissal (Court of Cassation, ruling no. 19185, dated September 28th 2016). Case law confirms that under article 3 Law no. 604/1966 it is not required to prove the need to reduce labour costs by demonstrating the existence of a negative economic situation in the market. Such an interpretation would be contrary to article 41 of the Italian Constitution, providing the economic freedom of the entrepreneur, who is free to choose the best combination between factors of production in order to increase the company productivity. However, the employer shall prove the negative economic situation of the company or the extraordinary costs where the dismissal is grounded on such reasons. Otherwise, if the employer fails to comply the burden of proof, the dismissal will be unjustified because the justification will be untruth and specious. Therefore, the employer shall pay attention to the reasons grounding the dismissal, because the employer can make reference to the reorganization but, if he/she has alleged the negative economic situation, this shall be proved, with all the possible consequences in case the existence of the negative economic situation is not recognized by the court.
