Managerial relationship: limits to the right to criticise of the employer

The Italian Supreme Court, in its ruling no. 17689 of 31 May 2022, has expressed again on the limits of an Executive’s right to criticise of the employer company and the consequent legitimacy of the dismissal served in case the employer considers such limit exceeded.

The case submitted to the Court's examination stems from the dismissal for just cause of an Executive, a general manager, who, during the Board of Directors' meeting, expressed doubts concerning the draft financial statements for the previous year, pointing out the abstract possibility that he and the other directors might have committed certain offences.

Following technical verifications and controls ordered by the company’s top management, the remarks expressed by the Executive have been demonstrated as unfounded and the company, after the disciplinary proceedings, dismissed the general manager for cause.

The Executive challenged the dismissal but his appeal has been rejected before both the Court and the Court of Appeal of Brescia. The two courts of merit, in fact, stated that the right to criticise an employer could be legitimately exercised only if based on truthful assumptions.  Likewise, the right to raise doubts about the company's financial statements did not allow the general manager to express such doubts publicly, during a Board of Directors' meeting, or to claim potential criminal offences if the company didn’t accept the remarks pointed out by the employee.

The Court of Appeal, in particular, has decided that the dismissal was grounded, or at least justified, underlining that the Executive had voluntarily placed himself in opposition to the choices made by the company and, therefore, caused a a breach of trust, so that the groundlessness of the criticism justified the dismissal.

The Supreme Court ruled differently from the judges of the first two instances, upholding the Executive’s appeal and sending the decision back to the Court of Appeal.

The Supreme Court, firstly, reaffirmed the principles consolidated in jurisprudence regarding the right to criticise and noted how such principles are based not only on Article 21 of the Italian Constitution, but also on the Workers' Statute, which recognises the right of workers to freely express their opinion.

More generally, on the basis of the Court’s ruling, in the employment relationship the exercise of the right of criticise must be balanced with the duty of loyalty and the respect for general principles of fairness and good faith in carrying out work.

The Court, furthermore, analyse the features specifically connected to the Executive’s qualification and the role of General Manager and the implications arising from such role, also in consideration of the responsibilities that Articles 2392 and 2396 of the Civil Code – articles relating to dissent during meetings of the Board of Directors and to the liability of the general manager – assigned to this figure.

According to the Court, the only limitation to the right of criticism of an employee who claim unlawful conduct by his employer is the configuration of the crime of slander, i.e. when the employee is aware of the falsity of what he has reported.

In this perspective, it must be pointed out that the unfoundedness of the complaint made by the employee cannot lead to disciplinary consequences, nor to sanctions, since the general right of cooperation of the citizen based on the general and protected public interest to claim facts suspected as unlawful, must be protected.

In case at stake, the Court noted that the general manager had not formally filed a complaint, but had merely expressed, by exercising his right to criticise, that he had detected conduct that could have constituted a criminal offence and that he did it within the meeting of one of the corporate entities.

In a managerial relationship, the bond of trust existing between the parties cannot constitute any compression of the right of criticism, and the judge of merit, in order to assess the justification for dismissal, must evaluate very carefully the balance between the duty of loyalty and the right of criticise itself, excluding that the exercise of those rights may integrate grounds for justification of dismissal.

With reference to the so-called “giustificatezza” (a notion formulated by the case law according to which the dismissal of an executive is “justified” whenever it relies on reasons other than false, arbitrary, discriminatory or unfounded grounds), it must be noted that any reason appreciable from a legal point of view, that could break the bond of trust with the employer and which excludes the arbitrariness of the termination, may be relevant.

Applying these principles, the Supreme Court concluded that the conduct of an Executive who exercises, not as a pretext, the right to dissent, i.e. during the Board of Directors meeting, on a non-defamatory or offensive basis, does not constitute a justification for dismissal.

The Court, therefore, held that if the dismissed manager also covers the position of General Manager, the justification of dismissal is excluded if the right to dissent has been appropriately exercised, without any defamatory intention.