The financial crisis is having a significant impact in the field of employment, with an increase in dismissals for an objectively justified reason (giustificato motivo oggettivo) as employers seek to reduce their business costs. This brief note offers practical advice for employers in light of recent decisions on this issue.

As a result of the financial crisis, companies under pressure to reduce their business costs are frequently faced with the need to eliminate employment positions, leading to the termination of the employees in such positions.

Employers must seek to avoid the risk of such dismissals being ruled unfair or unjustified in the event of legal proceedings. In order to do so, the employer must be able to demonstrate to the labour court that the dismissals are a consequence of the company's economic situation. This requires the employer to maintain consistent conduct for a certain time after a dismissal. In particular, the employer should not hire new employees during a given period.

In Decision 11720, which was issued on May 20 2009, the Supreme Court stated that hiring a new employee eight months after a dismissal does not affect the fairness of the dismissal.

Moreover, Italian law provides that in a case of dismissal for an objectively justified reason, the employer must evaluate whether the employee can be employed in another role within the company before it decides to terminate the employee. This is termed the 'duty of repechage'.

The evaluation must take account of the duties and skills of the employee to be dismissed and must seek to find and offer him or her a similar role within the company, if such a role is available. In particular, the employer must determine whether all similar roles within the company are held by permanent employees - a condition clarified in a decision issued on January 15 2009 by the Labour Division of the Court of Rome.

In Decision 6552, which was issued on March 18 2009, the Supreme Court specified that an employee - in the context of such a dismissal - may choose to accept a new role within the company with lesser duties. Therefore, an evaluation must take into consideration possible roles at a lower level that may be available within the company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.