The Court of Cassation, with Judgment  no. 21306 of 5th October 2020, illustrates when it is legitimate to limit the collective redundancy to workers in a particular business or production unit

Court of Cassation, Judgment  no. 21306, 5th October 2020

The reduction in staff can be limited to a particular department or sector provided that there are objective business needs, consistent with those narrated in the opening letter of the collective redundancy procedure (pursuant to art. 4(3) Law no. 223/1991), and that the employer proves the facts that justify the narrow scope within which the choice was made. 
In the case in question, the Court of Appeal of Naples, overturning the judgment in first instance, declared illegitimate the dismissal ordered by the company as part of the collective redundancy procedure that had affected only one production unit, with an order to reinstate the employee and pay damages of 12 months’ salary.
In particular, according to the Court of Appeal, the dismissal was tainted by a procedural violation because although the said letter under art. 4(3) Law 223/1991, illustrated the economic crisis of the business in the province of Naples, due to the loss of an important client and an ongoing drop in orders, it had not highlighted the specific situation of the staff in the other business units «necessary for the purposes of assessing the non-fungible and obsolete tasks carried out by the employees of the unit in crisis, with consequent lack of justification of the limitation of the number of workers to be dismissed in a single branch, violation of the selection criteria and the application of reinstatement protections».

The company appealed to the Court of Cassation, which upheld the ruling in first instance. 
The Judges in fact found that the employer can indeed limit to a particular business unit the number of workers to be dismissed, provided that in the opening letter under Article 4(3) Law 223/1991 it indicates «both the reasons that limit the redundancies to employees of the unit or sector in question, and the reasons why it does not consider the transfer of such employees to other business units, in order to allow trade unions to verify the actual necessity for the planned redundancies».
On the contrary, «if the communication makes general reference to the situation of the company as a whole, without any specifics on the units to be abolished, the dismissals are unlawful for breach of the obligation to specify the objective business needs (see Cass. n. 4678 of 2015 cit.)».
The Supreme Court goes on to say that «as also recently reiterated by this Court (see Cass. n. 981 of 2020, Cass. n. 14800 of 2019), identifying the pool of  workers affected by temporary layoff or dismissal is conditional on the information acquired during the joint examination with the unions in the sense that, where the non-fungible character of the workers placed in CIGS or in any case in the absence of particular situations highlighted during the joint examination, the selection criteria must apply to the workers across the whole business».
Therefore, if the restructuring plan refers to a single business unit or a sector of the company, «the comparison between workers, in order to identify those to be laid-off, may be limited to those employed in the unit or sector to be restructured: this is not the result of a unilateral decision of the employer, but is objectively justified by the organizational needs underlying the reduction of personnel (Court of Cassation no. 2429 of 2012; Court of Cassation no. 22655 of 2012; Court of Cassation no. 203 of 2015)».
However, the decision to limit the pool of workers to be compared must be specifically narrated in the letter under art. 4(3) Law 223/1991 «to allow the unions to verify the link between the reasons that determine the redundancy of personnel and the business units that the company actually intends to close (ex plurimis Cass. no. 32387 of 2019, Cass. no. 203 of 2015; Cass. no. 22825 of 2009; Cass. no. 880 of 2013)».