The recent judgment released by the Court of Justice of the European Union (CJEU) dated June 4th, 2026 (Case C-907/24) addresses the relationship between dismissal resulting from the refusal of a transfer notice from the originally designated place of work and the rules governing collective dismissals, providing significant clarifications regarding their application. The issue stems from an Italian case: a company had decided to permanently move its production operations to a site located at a considerable distance from the one contractually set (from Campania to Sardinia, more than 600 kilometers away). After receiving notice of the transfer, the affected employees decided not to report to work at the new location, remaining absent without any justification for more than 30 (thirty) days, resulting in their dismissal by the employer. Subsequently, the employees started a judicial proceeding before the competent Court of Naples, claiming that the transfer decision was unlawful and, further, that the resulting termination was illeicit, as well, since it effectively constituted a collective layoff for which the proper procedure required at the national level had not been followed. Both requests were granted by the Court. In reply, the employer company appealed the judgment in question, challenging the interpretation of the concept of “dismissal” under EU regulations, which was adopted by the Court of Naples North, arguing that the termination of the employment relationship was due to just cause (i.e., the refusal of the employees involved to comply with the transfer decision). The national court therefore deemed it necessary to refer the matter to the CJEU so that it could rule on the exact classification of the termination of the employment relationships in question as “dismissals” under Directive 98/59/EC and, consequently, whether each dismissal should have been taken into consideration in relation to the numerical thresholds that trigger the obligations to inform and consult, according to collective dismissal procedures. In its analysis, the CJEU reiterated that, under EU law, a substantive interpretation is required to determine what constitutes a “dismissal”: what matters is the actual cause of the termination, regardless of the formal classification adopted by national law or by the employer. From this perspective, if the employer unilaterally imposes a significant change to an essential element of the employment relationship—such as the place of work—and the employee does not accept that change, the termination must be attributed to the employer and classified as a dismissal. A transfer over a long distance, in fact, constitutes a substantial change to the contract, as it is likely to have a significant impact on the employee’s living conditions and personal and family balance. It follows that terminations resulting from the refusal of transfers of this magnitude must be included in the calculation of collective dismissals for the purposes of applying the Directive. From an operational standpoint, this means that if an employer anticipates that a reorganization may lead to widespread refusals by employees, it must initiate the information and consultation procedure in advance. This decision is consistent with the rationale behind Directive 98/59/EC, which aims to ensure transparency and employees’ involvement during corporate restructuring, as well as with the now-established principle that substantive considerations take precedence over the formal grounds for termination cited by the employer. The CJEU has therefore adopted a substantive approach, aimed at preventing organizational measures that are formally different from being used to circumvent the safeguards provided for in the context of collective layoffs, thereby urging companies to conduct a more careful preventive assessment of the effects of their organizational decisions, thereby reinforcing the principle of the effectiveness of protection.
2026 - Morri Rossetti
