With judgement no. 118, filed on 21 July, concerning Art. 9(1) of Legislative Decree no. 23/2015, Corte Costituzionale annulled the provision that provided for compensation for unlawful dismissal in “small businesses.” The provision stipulated that in companies with an average of less than 16 employees in the semester prior to dismissal within the same production unit or municipality and, in any case, no more than 60 employees in total, the amount of compensation could not exceed six months’ salary for each year of service.
According to Corte Costituzionale, the imposition of such a fixed and mandatory upper limit – regardless of the seriousness of the defect affecting the dismissal – when added to the rule that compensation amounts are halved for employers with this limited headcount, results in compensation being restricted to such a narrow range that it prevents the judge from applying the criteria of individualisation, adequacy, and fairness in relation to the damage suffered by the unfairly dismissed employee, and also fails to ensure that the award serves as an effective deterrent against unlawful conduct by the employer.
In summary, this ruling is based both on a previous ruling by Corte di Cassazione (No. 183 of 2022) and on the different definition of “small enterprise” defined by European legislation. The previous provision (Art. 9, par. 1 of Legislative Decree No. 23/2015) has now been annulled, and urgent legislative action will be required to regulate the severance pay in question.
We remain available for any further clarification