Dismissal for cause: everything you need to know

The termination for just cause represents one of the most delicate and complex moments in human resource management within a company. This type of termination occurs when the employee's behavior is so serious that it irreparably compromises the trust relationship with the employer, making it impossible to continue the employment relationship even temporarily. From fraudulent actions to violations of safety regulations, termination for just cause is an extreme measure that requires careful evaluation and a solid evidence base.

In this article, we will explore the circumstances that can lead to a termination for just cause, the crucial role of company investigations, and the legal protections for both parties involved.

Definition of Termination for Just Cause

Termination for just cause is a measure whereby the employer immediately terminates the employment relationship with an employee due to behavior that is so serious that it does not allow the continuation, not even temporarily, of the employment relationship. This type of termination is governed by Article 2119 of the Italian Civil Code and occurs in the presence of facts or behaviors of the employee that irreversibly compromise the trust relationship between the parties.

Examples of Termination for Just Cause

What are the reasons for termination for just cause? This type of termination of the employment relationship can be motivated by various types of serious employee misconduct. Here is a list of causes for termination for just cause.

Theft or embezzlement: if an employee steals company property or money, this constitutes a violation of the trust relationship with the employer.
Serious insubordination: behavior of strong opposition or disobedience to the employer's directives or hierarchical superiors can justify termination.
Physical or verbal violence: acts of violence, threats, or serious insults towards colleagues, superiors, or customers.
Unjustified absenteeism: prolonged or repeated absences without valid justification can be a reason for termination.
Intentional damage to company property: the intentional destruction or damage of equipment, machinery, or other company assets.
Unlawful conduct outside of work: employee behaviors outside the workplace that severely damage the company's image.
Improper use of company resources: personal use of company resources or tools for unauthorized or private purposes, such as using company vehicles for personal purposes without authorization.
Violation of safety regulations: behaviors that endanger personal or others' safety, such as non-compliance with workplace safety regulations.
Falsification of documents: manipulation or falsification of company documents, such as attendance sheets or accounting records.
Substance abuse during working hours: consumption of alcohol or drugs during working hours, compromising the ability to perform duties safely and effectively.
Behaviors damaging to the company's reputation: actions or statements that severely damage the company's image and reputation.
Sexual harassment or discrimination: any act of harassment or discrimination against colleagues or superiors.

In each of these cases, it is essential that the employer follows an appropriate procedure, which usually includes the formal contestation of the charges to the employee and the possibility for the latter to present their defenses.

Termination for Just Cause and NASpI

NASpI (Nuova Assicurazione Sociale per l'Impiego) is a monthly unemployment benefit for employees who have involuntarily lost their job. However, in the case of termination for just cause, the employee may not be entitled to this benefit.

NASpI is intended for employees who lose their job involuntarily. Termination for just cause, being determined by serious employee misconduct, does not fall under the causes of involuntary job loss.

In some particular cases, the employee terminated for just cause could still access NASpI if they can prove that the termination was illegitimate. For example, if the employee contests the termination in court and obtains a favorable ruling that annuls the termination for just cause, they could be entitled to NASpI.

If an employee believes that the termination for just cause is unjust, they can appeal to the labor judge. If the judge determines that the termination was illegitimate, the employee may be entitled to NASpI. During the process, the employee can request a provisional unemployment benefit, but the outcome will depend on the final court decision.

The NASpI application must be submitted to INPS (National Institute of Social Security) within 68 days from the date of termination of the employment relationship. If the termination is contested, the terms for submitting the application may be suspended until the dispute is resolved.

Termination for Just Cause and TFR

Even if the employee is terminated for just cause, they are still entitled to receive the TFR accrued up to the moment of termination of the employment relationship. This is because TFR is considered an acquired right during the employment period and cannot be denied, regardless of the termination circumstances.

TFR must be paid to the employee at the time the employment relationship ends. The exact timing may vary based on the applicable national collective labor agreement (CCNL) or company agreements, but usually, payment is made within 30-45 days from the termination of the employment relationship.

TFR is calculated based on the employee's annual salary, including all fixed and variable components of the salary (base salary, overtime, bonuses, etc.), and updated with an annual revaluation coefficient.

Procedure to Obtain TFR

Formal request: in case of termination, the employee should formally request the payment of the accrued TFR from the employer. Often this happens automatically, but in some cases, it may be useful to send a written request.
Disputes and delays: if the employer does not pay the TFR within the established terms, the employee can turn to a union or a lawyer to start a dispute and credit recovery procedure. In extreme cases, the employee can appeal to the labor judge.
Taxation of TFR: TFR is subject to separate taxation. The applied tax rate depends on the employee's length of service and the total amount accrued.

In summary, even in the case of termination for just cause, the employee has the full right to receive the TFR accumulated during the employment period. The employer is required to pay this amount within the prescribed times, and the employee can take legal action if the payment is not made correctly.

Termination for Just Cause without Notice

Characteristics of Termination for Just Cause without Notice

Immediacy: termination for just cause entails the immediate cessation of the employment relationship without the need for a notice period. This is because the employee's behavior is considered so serious that it does not allow the continuation of the relationship even for the notice period.
Severity of Conduct: to constitute just cause, the employee's conduct must be extremely serious, such as to irreparably harm the trust relationship between employer and employee. Examples of such conduct include theft, serious insubordination, physical or verbal violence, falsification of company documents, etc.
Disciplinary Procedure: before proceeding with termination for just cause, the employer must follow a disciplinary procedure. This includes written communication to the employee of the facts that constitute the charge and the possibility for the employee to provide their justifications within a specified period (usually five days).
Absence of Notice Compensation: in the case of termination for just cause, the employee is not entitled to notice compensation, precisely because the behavior justifies the immediate cessation of the employment relationship.

Employee Rights

TFR and other credits: despite the termination for just cause, the employee is still entitled to receive the TFR (Trattamento di Fine Rapporto) accrued, unused holidays, the proportionate thirteenth and fourteenth months' pay, and any other credits accrued up to the date of termination of the employment relationship.
Contesting the Termination: the employee can contest the termination if they believe that the grounds for just cause do not exist. The appeal must be made within 60 days of receiving the termination notice, through written communication to the employer. Subsequently, within 180 days of the appeal, the employee must file the appeal with the competent court.
Reinstatement or Compensation: if the judge finds the termination for just cause illegitimate, they can order the employee's reinstatement in the workplace and/or compensation for damages, which may include lost wages from the time of termination to reinstatement or up to a maximum of 12 months' wages.

Does a Termination for Just Cause Leave a Trace?

Yes, termination for just cause leaves a trace, both at the company and legal level. Here is how and where these traces are maintained.

Company Traces

Internal Documentation: every termination for just cause must be adequately documented. The company prepares a detailed report that includes the reasons for the termination, the evidence collected during the internal investigation, and the formal communications sent to the employee.
Personnel Record: information related to the termination is kept in the employee's personnel file, which includes all documentation related to the employment relationship, from performance evaluations to disciplinary notes.

Legal and Bureaucratic Records

Official Communications: the employer is required to communicate the termination to social security and insurance institutions (such as INPS in Italy) through specific forms that record the termination of the employment relationship and indicate the cause.
Service Certificate: the employee is entitled to request a service certificate at the end of the employment relationship, which may include information on the start and end date of the employment, but not necessarily the reasons for the termination.
Judicial Proceedings: if the termination for just cause is contested by the employee and a judicial proceeding is initiated, the documentation and court decisions will be recorded in the judicial archives.

Implications for Future Employment

References and Recommendation Letters: often, a new employer may request references or information regarding previous employment. Although companies must respect privacy, the reason for the termination may emerge during this process.
Employment History Checks: some sectors require rigorous checks of previous employment history. In these cases, the termination for just cause may be revealed during pre-employment screenings.

Privacy and Disclosure Limits

It is important to note that information regarding the reasons for termination is subject to privacy regulations. Companies cannot disclose specific details about the termination without the employee's consent, unless required by legal proceedings or for security and transparency reasons in the workplace.

The Role of Corporate Investigations in Cases of Termination for Just Cause

Corporate investigations play a crucial role in cases of termination for just cause, as they provide the employer with the necessary information and evidence to justify the termination. Below are some key aspects of the role of corporate investigations in these contexts:

Purposes of Corporate Investigations

Gathering Evidence: the main objective of corporate investigations is to collect concrete and documentable evidence of the employee's misconduct or illegal behavior. This evidence is essential to support the decision to terminate for just cause.
Protecting the Company: investigations help protect the company from potential legal disputes by the terminated employee. Well-documented evidence can demonstrate the legitimacy of the termination and prevent potential damages claims.
Impartiality and Accuracy: professionally conducted corporate investigations ensure that the process is fair and that all relevant circumstances are considered. This can prevent rushed decisions or decisions based on incomplete information.

Investigation Procedures

Initiating the Investigation: the investigation can be initiated following reports of misconduct, suspected violations of company policies, or specific incidents. It can be requested by management, human resources, or even by colleagues.
Investigation Methods: the techniques used in corporate investigations may include:
- interviews and testimonies from colleagues;
- analysis of company documents and records;
- monitoring of IT activities and use of company resources;
- video recordings or surveillance (in compliance with privacy regulations).
Compliance with Regulations: it is essential that investigations are conducted in compliance with applicable laws, particularly those concerning employee privacy (GDPR in Europe) and labor regulations. The company must avoid any violation of confidentiality or workers' rights.

Investigation Outcomes

Final Report: at the end of the investigation, a detailed report is drafted that includes the evidence collected, testimonies, and conclusions drawn. This report must be objective and based on verifiable facts.
Termination Decision: if the evidence collected confirms the just cause, the employer can proceed with the immediate termination without notice. The investigation report becomes an integral part of the documentation justifying the termination.
Possible Disputes: the employee has the right to contest the termination. In such cases, the evidence collected during the investigation will be crucial in any legal proceedings.

Benefits of Corporate Investigations in Termination for Just Cause

Reducing Legal Risk: solid and well-documented evidence reduces the risk of legal disputes and increases the chances of success in court.
Protecting Company Reputation: handling cases of misconduct professionally protects the company's reputation and demonstrates a commitment to an ethical work environment.
Clarity and Transparency: investigations provide clarity on suspicious events and behaviors, contributing to a transparent and fair work environment.

In essence, corporate investigations are a fundamental tool for managing cases of termination for just cause. Ensuring accurate and compliant evidence collection, investigations protect the company and ensure that the rights of all parties involved are respected. Professional management of investigations contributes to maintaining a fair and transparent work environment, preventing misconduct and protecting the company's interests.

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