The aim of the settlement agreement must be identified not in relation to the wording used by the parties, but in the context of their contrasting interests
Court of Cassation, Employment Section, 23 October 2020, Judgment no. 23385
With the decision under discussion, the Judges offer a broad examination of the principles on the interpretation of waivers and concessions as regards the reciprocal rights deriving from the employment relationship.
The case stems from the claim by a worker who was hired for a managerial role of General Manager and was also appointed Managing Director, without any additional remuneration for the latter position.
The employment relationship ceased on 31st December 1998 by virtue of a settlement agreement between the parties three months previously. The worker subsequently claimed additional remuneration for the position ofManaging Director.
The claim was rejected both in first instance and on appeal, on the basis that the question of remuneration had been fully settled within the agreement.
The employee appealed to the Supreme Court, complaining that the court in first instance had undervalued the literal meaning of the settlement agreement, resulting in the breach of the principle of the necessary preliminary interpretation of the negotiations and the principle of gradualism.
In particular, the worker pointed out that the agreement did not make any reference to the position of Managing Director, referring in fact only to the managerial (dirigente) employment relationship.
The Supreme Court rejected the appeal, commenting that “with regard to waivers and settlements in the context of an employment relationship and the termination of same, the intention of the worker is based on the interpretation of the document, on the assumption that he was aware of his rights and consciously wishes to abdicate or settle them (Court of Cassation no. 10056 of 1991; Court of Cassation no. 1657 of 2008)”.
According to the Judges, the purpose of the settlement agreement should not be identified in relation to the wording used by the parties, but “in relation to the objective situation of conflict that the parties themselves have begun to settle through mutual concessions in relation to the positions taken by the same not only in the dispute in progress but also in view of a dispute that may arise between them and that they intend to prevent and the judge, In order to investigate the scope and the content of the settlement, may draw on any element suitable to clarify the terms of the agreement, even if not referred to in the document, without this entailing a breach of the principle that the agreement must be proven in writing (cf. Cass. n. 729 of 2003; Cass. n. 9120 of 2015)”.
On the subject of the general interpretation of contracts, “if the wording used is not sufficient to reflect the will of the parties, it is necessary to have regard to the intent of the parties”.
With particular reference to the interpretation of settlement agreements, the Judges remind us that “in order to verify whether the actual content reflects the negotiations, it is necessary to investigate first of all whether the parties, through the agreement, have pursued the aim of putting an end to the uncertainty of future litigation, using expressions, without the need to express their disagreement on opposing claims, nor to use expressions revealing the negotiations, whose existence can also be inferred from expressing the will to put an end to any further dispute“.
Finally, with regard to the requirements of the aliquid datum and the aliquid retentum, for the Court “they are not to be related to the actual rights of the parties, but to their respective claims and disputes and, therefore, the existence of an economic balance between the mutual concessions is not necessary” (see Court of Cassation no. 7548 of 2003)”.