Referendum on unfair dismissals in small enterprises: the reasons for yes and no

Ahead of the referendum on 8 and 9 June on five referendum questions, we delve into the second question on labour issues promoted by the CGIL. We do so with professors Arturo Maresca (Labour Law at La Sapienza University of Rome) and Franco Focareta (Labour Law, University of Bologna). The second question concerns the repeal of the upper limit for compensation in unjustified dismissals in small and medium-sized enterprises.

Professor Focareta, why yes to the repeal of these regulations and what impact would it have on the labour market? "Because the excessively marked difference in protection between workers employed by medium-large companies and workers employed by small companies, i.e. under 16 employees, affects workers' living conditions. In small enterprises, if a worker is unjustifiably dismissed, he has protection from two and a half months' pay up to a maximum of six months' pay. A cost deemed absolutely inadequate both in terms of compensation for the damage suffered by the worker and in terms of deterrence against knowingly arbitrary behaviour by the employer. For the Constitutional Court, the difference in protection based only on the number of employees in a company is not an adequate index to distinguish also the economic potential of the company. The positive outcome of the referendum, by eliminating the upper limit of protection of six months' pay, would leave it up to the judges to find adequate compensation for the unjustly dismissed employee, based on a series of criteria that the law already indicates. We would have decisions based on length of service, on the size - including the numerical size - of the company, on the company's economic potential, finding a more acceptable balance, to give adequate protection to the worker and have a dissuasive effect on arbitrary and unjustified dismissals for employers'.

Professor Maresca, why 'no' to the repeal of the referendum rules and what would be the impact of a 'yes' vote? "It's easy, because the Constitutional Court - as Franco Focareta said - held that the parameter for identifying small businesses based only on the number of employees is unconstitutional. The referendum leaves this parameter and therefore the unconstitutional parameter remains even after the referendum. That is the first point. The second point is that the rule, if the referendum passes, would have the paradoxical effect that the sanctioning regime of dismissal for small companies would be even more favourable than that of large companies, for which there is a ceiling: 24 months, 36 months. In SMEs there would be no ceiling, so an inverse disharmony would be created between small companies for which the judge can set whatever the measure of compensation is, while in larger companies there would still be a ceiling. This is a disharmony. We have seen that the Constitutional Court takes these disharmonies into account when assessing the legitimacy of the rules'.