Italy’s Constitutional Court has ruled unconstitutional the fixed six-month salary limit imposed on compensation for illegitimate dismissals in small businesses. The court specifically targeted Article 9, paragraph 1 of Legislative Decree No. 23 of 2015. This provision capped compensation when dismissals were ruled illegitimate for employers falling below the size thresholds outlined in Article 18 (paragraphs 8 and 9) of the Workers’ Statute – specifically, businesses employing fewer than 15 workers per production unit or municipality, and fewer than 60 employees overall. The decree stated compensation “cannot in any case exceed the limit of six months” of the employee’s last reference salary used for severance pay calculation, per year of service.
According to the Court, imposing this fixed, absolute maximum limit, regardless of the severity of the dismissal’s legal flaw, combined with the halving of amounts specified in other articles (Articles 3(1), 4(1), and 6(1) of the same decree), confines compensation within such a narrow range. This prevents judges from respecting the principles of personalization, adequacy, and proportionality when awarding damages to wrongfully dismissed workers. Furthermore, the Court stated this cap undermines the compensation’s intended deterrent effect on employers.
The Court also expressed hope for legislative intervention regarding dismissals in sub-threshold companies. It highlighted that within both European and national legislation, even concerning other areas like business crisis, the criterion of employee numbers does not solely indicate a company’s economic strength or its capacity to bear the costs associated with illegitimate dismissals.