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Dismissal for Justified Objective Reasons (GMO)

dismissal for justified objective reasons (GMO), as outlined in Article 3 of Law 604/1966, occurs when the cause is related to reasons concerning the productive activity, the organization of work, and its regular functioning.

In particular, dismissal for justified objective reasons may be carried out by the company for reasons such as cost reduction, economic crisis, company restructuring, lack of work, or the employee’s inadequacy in meeting company needs.

An employee dismissed for GMO is entitled to receive notice and severance pay and may challenge the dismissal in labor court.

GMO dismissal applies only to employees with permanent contracts. For fixed-term employees, dismissal can only occur upon contract expiration.

What does dismissal for justified objective reasons mean?

According to Article 3 of Law 604/1966, a justified objective reason for dismissal exists when the termination is based on reasons related to the productive activity, the organization of work, and its proper functioning. Specifically, the following must apply:

  • The employment contract is terminated due to actual and concrete business needs.
  • A direct relationship exists between the company’s needs and the termination of a specific employment relationship.
  • It is not possible to reassign the employee to another position within the company, even to a lower-level role if it is the only solution to avoid dismissal.

What is the difference between objective and subjective dismissal?

An employer may proceed with subjective dismissal for disciplinary reasons, typically involving a breach of contractual obligations by the employee. Examples include extended unexcused absences or consistently low productivity.

What is the difference between dismissal for just cause and dismissal for justified subjective reasons?

Dismissal for justified subjective reasons can be considered a less severe alternative to dismissal for just cause. The distinction lies in the severity of the employee’s disciplinary misconduct.

What is owed to an employee dismissed for justified objective reasons?

An employee dismissed for justified objective reasons is entitled to receive TFR (severance pay), as this is due at the end of any employment relationship, regardless of the reason for termination, including dismissal for just cause.

Additionally, the employee is entitled to unemployment benefits, as detailed below.

In cases where the dismissal is declared unlawful by a judge, the employee may also be entitled to compensation for damages.

Notice Period

Dismissal must be communicated in writing, with respect for the notice period, and the reasons for termination must be specified.

For employees hired before March 7, 2015, and employed by companies exceeding the dimensional threshold defined by Article 18 of Law 300/1970 (Workers’ Statute), the conciliation process outlined in Article 7 of Law 604/1966 must be initiated. This involves:

  1. The employer notifying the Territorial Labor Inspectorate and the employee of the intent to dismiss, specifying the reasons.
  2. The Inspectorate summoning the parties for conciliation within 7 days of receiving the notification.
  3. The conciliation process concluding within 20 days.

If conciliation fails or the parties are not summoned within 7 days, the employer may proceed with dismissal.

 

NASpI

NASpI, the unemployment benefit introduced for involuntary unemployment events, is available to workers who lose their jobs involuntarily. To qualify for NASpI, the following requirements must be met:

  1. Involuntary job loss: NASpI does not apply to voluntary resignations (except for resignations for just cause) or consensual termination of the employment relationship.
  2. Contribution requirement: At least 13 weeks of contributions must have been paid to INPS in the four years preceding the end of the employment relationship.
  3. Work requirement: The worker must have performed at least 30 actual workdays in the 12 months prior to unemployment.

Thus, the monthly NASpI benefit (Nuova Assicurazione Sociale per l’Impiego) is also available for dismissal due to justified objective reasons, as it applies to workers who have involuntarily lost their employment.