Legislative Decree No. 23/2015 Also Applies to Employees of Small Companies Hired Before Its Entry into Force

The Italian Constitutional Court, on the legitimacy of Article 1, Paragraph 3, Legislative Decree No. 23/2015 stated that it is in compliance with the Italian Constitution in the part where it allows the application of the unlawful dismissal regime for those hired after 7 March 2015 to all the employees working in companies that exceeded the dimensional limits referred to in Article 18 Law No. 300/1970 as a result of hiring after that date. The Constitutional Court declared this in its recent decision no. 44 issued on 19^th March 2024, which, together with the other two this year, adds to the multiple interventions of the Constitutional Court on the so-called Jobs Act.

In particular, the case before the Court of Lecce was about the challenge of a dismissal of an employee hired before 7 March 2015, who had invoked the application of the protections set out in Article 18 Law No. 300/1970, as generally applied to those who were hired before that date in companies with more than fifteen employees. The company, for its part, insisted on the application of Article 1, Paragraph 3, Legislative Decree No. 23/2015, objecting that “although at the time of dismissal the requirements of the Art. 18 […] were met, the numerical threshold had been exceeded after the entry into force of the aforementioned Legislative Decree No. 23 of 2015.” The Court of Lecce had doubted the constitutional legitimacy of this provision due to excessive delegation, with reference to the criteria set out in Law No. 183/2014 enacting the related decree, which “by delegating to the Government the provision of permanent contracts with increasing protections, limits its application to «new hires».”

The Constitutional Court – valorising the “overall aim” pursued by the legislator in 2014 of strengthening opportunities for entering into the labour market – instead concluded that it was allowed by the delegated legislator, “in the exercise of its power to complete the framework of the discipline,” to “regulate the position of employees in small companies, for whom there was no reinstatement protection regime pursuant to article 18 to be preserved.” More precisely, the Court states that for small companies being able to apply the provisions of Legislative Decree no. 23/2015 to the entire workforce after exceeding the threshold of fifteen employees, regardless of each date of hiring, represents “an incentive (or the absence of obstacles) to grow in the company dimension.”

In any case, taking into account the “balance desired by the delegating legislator,” the Italian Judge of Laws does not find any “regression in peius” in the protections provided by Legislative Decree no. 23/2015 for those employees already in force on 7 March 2015, to whom, before exceeding the size limit, the less favourable regulations of Law no. 604/1966 applied.

Worthy of note is the final consideration according to which “the discipline of the legislative decree, precisely because it is applicable to all new hires, which are increasing in number, tends to be the ordinary one,” while the discipline referred to in Art. 18 Law No. 300/1970 for workers hired before 7 March 2015, “naturally sees its area of applicability narrowing over time until it will completely disappear.“

Key Action Points for Human Resources and In-House Counsel

Practical Points

• The extension of the Legislative Decree no. 23/2015 application to all employees – including those hired before the mentioned Decree entered into force – working in entities that exceed the threshold of fifteen employees after 7 March 2015 is constitutionally legitimate.
• This provision follows the aim of the delegating legislator of promoting new hiring and does not imply an amendment in peius or discriminatory treatment to the concerned employees.