Some reflections on the recent judgment of the Tribunal of Milan while waiting for the decision of the Constitutional Court. by Marilena Cartabria When an employee hired under the new “contract with increasing protections” regime is dismissed for economic reasons, the employee is entitled to damages rather than reinstatement, even if the employer was unable to show that there was no other equivalent or similar job position for the dismissed employee. This is the principle stated by the Tribunal of Milan a few months ago (Judgment no. 1755, dated August 8th 2017), which represents an interesting development regarding the duty of repêchage. The case The case before the Tribunal of Milan concerns an employee hired in June 2015 who challenged the dismissal for objective reasons, asking the court to assess in the first instance the discriminatory nature of the dismissal, failing which the absence of any valid grounds for dismissal, based on economic reasons (abolition of the position). In both cases, the employee was seeking reinstatement. The defendant company did not file a notice of appearance and was thus considered in absentia. Having heard the preliminary oral arguments, the court rejected the alleged discriminatory nature of the dismissal. As regards the actual abolition of the job position, although this was not specifically challenged, the employer in absentia did not prove that there was no other position they could have offered the dismissed employee. Nevertheless, by applying the remedies under the Jobs Act 2015, the Judge awarded damages (not reinstatement). The duty of repêchage: state of the art It has been the case for a long time that a dismissal is deemed lawful when the employer proves the existence of economic, organisational and productive reasons and the absence of equivalent positions within the Company. Therefore, the employer has to prove both aspects during the trial, while the employee has to prove the contrary, i.e. there was an alternative job position for him in the Company (Court of Cassation, March 22nd 2016, no. 5592). The duty of repêchage is a “creature” of Italian case law, with its origins embedded in the old Article 18 of the Workers’ Statute. Until the Summer of 2012, without doubt, if the employer failed to comply with the duty of repêchage the employee was entitled to reinstatement. However with the passing of Law no. 92/2012 (the so-called Fornero Reform) in 2012, effectively amending Article 18 of the Workers Statute, the remedies for breach of the duty of repêchage began to crumble due to the remedies for unfair dismissal for justified objective reasons being split into two separate and distinct categories: reinstatement if the reason for dismissal was actually non-existent, otherwise damages ranging from 12 to 24 months. While the, courts initially stated that if the employer fails to comply with the duty of repêchage, the employee is entitled to be reinstated because it is a case of “evident non-existence of the facts on which the dismissal is based”. However, the courts then started to consider non-compliance with the duty of repechage as something separate from the grounds of dismissal, thus pushing it into the “other cases” bracket and excluding the remedy of reinstatement (most recent decision on point: Tribunal of Turin, April 5th 2016). Fast-forward to March 2015 and with the introduction of the Jobs Act, the sole remedy (in most cases) for unfair dismissal for employees hired after March 7th 2015, is damages, strictly linked to length of service. Ironically, while the remedies for unfair dismissal have become less severe, sanctions for non-adherence to the duty of repêchage have become more severe, due to another employment law reform in June 2015 introducing a profound change to the rules on tasks and duties. In fact the case law in point underlines that the burden of proof is on the employer to show the absence of a suitable job position. Therefore, the Tribunal of Milan, in a judgment of December 2016, considered that as from June 2015, the notion of “equivalent duties ” was replaced by the concept of “duties attributable to the same job level and category”. This means that in checking the existence of alternative positions that could be assigned to the redundant employee, the employer has to look at all available positions in the company, which belong to the same job level/category and the employee cannot complain that the duties are detrimental or do not form part of his/her skills set. Moreover in checking other available positions, the employer now has to look at not just the same job level but the one immediately below as well. Given the most recent decisions of the Supreme Court, the burden of proof on the employer has become more onerous in that it is now on the employer alone to show the impossibility of repositioning the employee elsewhere, there being no onus on the employee whatsoever to show the contrary. Conclusions On one hand, under the new regime of open-ended employment contracts with increasing protections (introduced in 2015 by the Jobs Act), it looks highly unlikely that the sanctions for breach of the duty of repêchage could reach beyond payment of damages (for companies with over 15 employees, two months’ salary per year of service), However for employees hired before March 7th 2015, the remedy could still be reinstatement: a potentially very serious state of affairs for companies. Employers beware! Prior to dismissal, companies must evaluate closely whether there are any other alternative positions available to offer the employee.