Law and Limits of the Power of Dismissal: A Comparative Analysis of the Legislation and Case Law in the United States and Italy
© Springer International Publishing Switzerland 2015Laura Pineschi (ed.)General Principles of Law – The Role of the JudiciaryIus Gentium: Comparative Perspectives on Law and Justice4610.1007/978-3-319-19180-5_10
Anti-discrimination Law and Limits of the Power of Dismissal: A Comparative Analysis of the Legislation and Case Law in the United States and Italy
Researcher in Labor Law, University of Parma, Parma, Italy
The prohibition of discrimination in employment relationships is core to the fundamental principle of human dignity that underlies the law of the most developed Countries. Nonetheless, under a comparative approach, anti-discrimination law assumes different roles and functions according to the historical development of each legal system. In the United States the implementation of anti-discrimination provisions has been one of the main instruments for US legislative institutions to promote the emancipation of the most disadvantaged groups of workers. On the other hand, United States courts have narrowly interpreted anti-discrimination statutory laws emphasizing the necessity of protecting employers’ prerogatives under the common law doctrine of “at will employment”. Within the European and Italian experiences, political concerns for the emancipation of the working class have informed the evolution of labor law since the nineteenth century. Case law and statutes provide for general limits to the powers of employers, in order to counterbalance the economic submission of workers to the supremacy of companies. This chapter focuses on discriminatory dismissals and is founded on the idea that the relationship between anti-discrimination law and the power of employers to dismiss acquires different roles and functions according to the peculiar features of the different legal systems, and in relation to their historical development. On the basis of these arguments a narrow interpretation of the most recent provisions of Italian legislations on discriminatory dismissals is to be preferred under a comparative approach.
Principia communia legis naturae non eodem modo applicari possunt omnibus, propter multam varietatem rerum humanarum: et ex hoc provenit diversitas legis positivae apud diversos.
Tommaso D’Aquino, Summa theologiae, 1a 2ae, Quaest. 95, Article 2
The prohibition of discrimination in employment relationships is core to the fundamental principle of human dignity that underlies the law of the most developed Countries. Nonetheless, under a comparative approach, anti-discrimination law assumes different roles and functions according to the historical development of each legal system.
In the United States, social class conflict has never been central to the political agenda. Non-class ties, in particular ethnicity, have been the dominant way for political parties to create attachments with immigrant and American-born workers. Thus, the implementation of anti-discrimination provisions has been one of the main instruments for US legislative institutions to promote the emancipation of the most disadvantaged groups of workers. On the other hand, US courts have narrowly interpreted anti-discrimination statutory laws, emphasizing the necessity of protecting employers’ prerogatives under the common law doctrine of “at will employment”.1
Within the European experience, political concerns for the emancipation of the working class have informed the evolution of labor law since the nineteenth century. Case law and statutes provide for general limits to the powers of employers, in order to counterbalance the economic submission of workers to the supremacy of companies.
Within American law, the dialectic between the common law “employment at will” doctrine and statutory anti-discrimination provisions constitutes the core of American jurisprudence on the limits to the employers’ power to terminate the employment relationship. Within Italian system employers can dismiss employees only on the basis of justified reasons, while the existence of a discriminatory motive affects only the kind of remedy enforced by courts in order to redress an unjustified dismissal. Thus, anti-discrimination principles play a residual role in this field.
Recently, Italian parliament has enacted a very remarkable reform on the consequences of the unlawful dismissal. Statute no. 92/20122 has modified Article 18 of the statute no. 300/1970.3 Currently the “discriminatory dismissal” and the “dismissal due to an illicit motive” are the only circumstances that imply the strongest remedy against unlawful discharge (reinstatement + back pay + front pay). This new regime has increased the debate on the role of the non-discrimination principle. The two main approaches shared by Italian scholarship, in this regard, are highly conflicting.
On the one hand, a strict interpretation has been held, that minimizes the systemic importance of the non-discrimination principle and, consequently, the scope of the application of the strongest remedy against unlawful dismissal. On the other hand, the idea of an extensive interpretation of the statutory provision on discriminatory dismissal has been affirmed. According to this approach, the more intense remedy should apply every time that there is no legitimate reason for the termination of the employment relationship, on the basis of the assumption that each unlawful dismissal should be considered as “discriminatory”.
The idea of this chapter is that a comparative approach might produce the insights necessary to clarify the interpretative doubts of Italian scholarship and jurisprudence. I will try to demonstrate that the relationship between anti-discrimination law and the power of employers to dismiss acquires different roles and functions according to the peculiar features of the different legal systems, and in relation to their historical development.
Italian law pursues the aim of rebalancing the socio-economic and contractual disparities, within the employment relationship, by establishing a set of specific limits to every legal power of the employer; thus statute no. 604/1966 provides for a specific set of rules that limits the power of dismissal. The employer can terminate the employment relationship only for justified reasons, due to the economic organization of the business or to unlawful behavior of employees. The discrimination principle plays a very limited role. The discriminatory nature of the discharge does not affect the validity of the decision but only the kind of remedy that the court will enforce.
By contrast, in the United States the non-discrimination principle constitutes (at least within federal law) the most relevant limit to the “employment at will” doctrine. Nonetheless, American courts have always applied a strict interpretative approach, in order to protect employers’ prerogatives. Even with a more permissive approach, if compared to Italian case law (for instance as regards some decisions on the necessity of demonstrating the discriminatory intent), American courts have not opened the door to a massive application of the non-discrimination principle and to its extensive interpretation, notwithstanding the most remarkable systematic role that this principle plays within US employment law.
On the basis of these observations, a comparative approach corroborates the idea that a broad interpretation of the recent Italian provision on the legal remedies against discriminatory dismissals is not to be shared.
2 The Non-discrimination Principle: Some Preliminary Remarks
The general analysis of the principle of non-discrimination and of its systematic meaning outside the scope of labor and employment is not among the main aims of this chapter. Nonetheless, some preliminary remarks are necessary. On the basis of the traditional analysis of the general principles of law,4 some doubts about the existence of such a principle itself could be raised, at least as regards Italian law.
Nevertheless, even omitting the discussion on its very existence, this principle has ambiguous content that can be easily confused with the principle of equal treatment. Such a misunderstanding seems to be very frequent.
Equal treatment means treating similar situations in the same way, and distinguishing the different ones. Within European and American law, such a rule is not applied to the private relationships, but is commonly recognized as regards the relationships between public authorities and private subjects. Modern liberal law systems, founded on the rule of law, establish that the State and public administrations have to treat private individuals fairly and reasonably and that the legislator will enact statutory provisions that will not favor anyone in an unreasonable way. But such a principle is not granted within the relationships between the enterprise and workers.
On the contrary, a remarkable protection is recognized to the right of the employer to run his/her business5 and to take any decision that he/she finds convenient in order to manage his/her economic activity, unless it is in contrast with a specific rule provided for by statutes or case law.
Taking decisions implies differentiating between, and providing in different ways for, customers, enterprises, contractors and subcontractors. The employer is responsible for the results of his/her economic activity, for the destiny of his/her enterprise and the interests of his/her shareholders and stakeholders. In order to grant the freedom of enterprise of the employer, her/his judgment on economic choices cannot be subject to any external revision, unless the decision taken is contrary to a precise statutory provision or case law rule.
Things do not change when the treatment of workers and employees is at stake. Italian case law is decidedly clear on this point. There is no binding principle for employers to treat similar situations in the same way, in the absence of an explicit contrary provision. Exemptions are provided in order to protect only those specific interests of workers that are deemed to deserve protection equal or superior to that of the freedom of enterprise.6 American law does not seem to differ greatly, in this regard.
It might seem paradoxical but, while doubts about the existence of a general non-discrimination principle within Italian employment law could be raised, it is sure that, in any case, the general principle of law that grants the employer’s right to differentiate—I would say, in a provocative manner, to “discriminate”—prevails on it, unless the differentiation/discrimination is specifically prohibited.
Many provisions prohibit specific discriminatory behaviors within Italian law. Most of them derive from European law; others from the implementation of rules of international law; some were already contained in domestic provisions, even before the implementation of the European directives on discrimination, of first and second generation.7 In fact, the number of provisions is such that the existence of a general principle of non-discrimination could hardly be contested. Nonetheless, it is quite clear that, even if such a general principle exists, it is not an inference of the equal treatment rule provided for by Article 3 of the Italian Constitution.
In my point of view, the content of this principle is that the prohibition of discrimination among private subjects directly derives from the protection of human dignity, and thus relates to Article 2 of Italian Constitution.8 Since the right to differentiate (therefore to “discriminate”) is highly protected by the Italian Constitution, it would be surprising if the fundamental right not to be discriminated against were recognized in such a general and wide manner to all workers and employees within the same constitutional legal system. Provisions on discrimination do not protect the right to equal treatment, but the dignity of human beings, involved within the economic activities of the enterprise.
This assumption has many remarkable consequences. If such a principle exists, its normative effect is not intended to provide for a general limitation of employers’ power. On the contrary it is directly focused on the aspect of human dignity that would be under attack.
Italian and international scholars debate on the question of whether or not the express prohibitions of discrimination provided for within national and international law systems constitute a closed or open list. According to the approach proposed herein, even where the second idea is accepted,9 a deep analysis of the nature of the protected specific aspect of human dignity is necessary, since this specific interest is to be balanced with the freedom of enterprise.
3 United States: The Historical Development of Inequalities Founded on Ethnicity and Gender
Given these general remarks on the content of the non-discrimination principle, it is necessary to define the role that prohibitions of discriminatory forms of treatment play within the two different law systems under investigation, since I believe that it significantly affects the way in which relevant provisions are to be interpreted.
The main idea of this chapter is that the function of the non-discrimination provisions differs according to the historical development of the legal systems these provisions belong to. This is particularly apparent when one compares the US and the Italian systems.
Sociologists and historians consider the United States as a “categorically unequal” society,10 where the “exploitation” of one group of individuals, and “opportunity hoarding” by another, dominant, category regulates the functioning of socio-economic dynamics. It has been maintained that “the motor of American history has been the continual reconfiguration of racial inequality in the Nation’s social, political, and economic institutions”.11
One could observe that European societies (and, in particular, the Italian one) are not very different in this regard. Nonetheless, sociologic studies12 demonstrate that Europe has developed a less dramatic difference between the wealthiest and the most disadvantaged strata of society. The development of more effective systems, for the redistribution of wealth, has protected Europe from the more evident phenomena of economic social exclusion present within the American society. Nevertheless, the problem of poverty is still notable, even in Europe, and has seen a very conspicuous increase in consequence of the recent economic crisis.
The most evident difference between the two social systems is not the quantity of disadvantaged individuals, or the level of differentiation regarding access to economic resources or opportunities. The cornerstone of the problem is that in the United States the differentiation between social groups has operated on the basis of essentialist definitions of individuals, especially in terms of ethnicity and gender.13 Within American society the economic situation of individuals has historically been highly affected by essentialist definitions of identity. The situation of social exclusion primarily operates in terms of essentialist distinctions (for instance being black, Latino or female) and poverty or economic disadvantages are invariably their consequence.
Since its origin, American society has supported the development of this form of “inequality” through the endorsement of slavery and its wide use within the productive system.14 The racial segregation of Afro-Americans from Whites continued even after the civil war, through the Jim Craw system, and “racial segregation was enforced not only formally, in public settings, but also informally, in private practice, through a racial etiquette negotiated, daily, by black and white Southerners”.15 The New Deal political compromise “legitimated racial discrimination in employment”, maintaining the formal disparity between the status of Afro-Americans and Whites within US institutions, up until the sixties.16 Before the Civil Rights Act (CRA), African Americans were subject to a strong form of segregation and the employment was one of the most relevant fields in which their exclusion from the best opportunities took place.17 In the South, most of the work requiring “unskilled labor” was performed by black people and the situation was not very different in the North, even if the segregation there was less overt.18
The consequences of this form of alienation were destined to extend for many generations of Afro-Americans, because the inherited economic disempowerment of families prevented the possibility of access to the highest levels of education, and, thereby, to the highest “skilled labor” wages and more satisfactory forms of employment.19
For these reasons, there is still a significant lack of employment equity within the American labor market. 20 Black people still form the majority of those holding unskilled labor positions and of those unemployed.21 This distribution of employment also affects the demography of the major cities, thus further entrenching the segregation based on ethnic classification.
The situation is similar for other minorities, such as Chinese people and Latinos. In the case of Latinos the social segregation has different and more recent origins, but similar issues and, in some cases, more serious consequences for the conditions of the people concerned. In most cases, individuals with South or Central American origins, living permanently within United States territory, do not possess a regular authorization. The percentage of undocumented Latinos is continuously increasing. They constitute a “better underclass”,22 since not only are they exploited and forced to accept the most menial and badly paid jobs, but they are themselves “outside the law”, without the possibility of claiming any right, and under the continuous menace of being incarcerated for the felonious crime of being on US soil without permission.
However, “race”, or “ethnicity”, is not the only basis for the construction of “categorical inequalities” within American society. One of the most deeply embedded reasons for social segregation is gender or sex. Sociological studies demonstrate that women have significantly less access to the highest levels of education, and hold far less high status positions than men.23
From a general perspective, it is clear that “race and gender … continue to function in powerful ways, to generate categorical inequalities”24 and to operate as a “categorical mechanism of stratification” in the United States.25 Therefore, the weight acquired by non-discrimination provisions in US employment law is strictly related to the development of American society.26
4 Social Inequalities and Employment Law in the United States and Italy
Social class conflict has never been central to the political agenda in the United States. Non-class ties, in particular ethnicity, have been the dominant way for political parties to create attachments with immigrants and American-born workers. Thus, the implementation of anti-discrimination provisions has been one of the most relevant instruments for US legislative institutions in the promotion of the emancipation of the most disadvantaged categories of workers.27
Moreover, while labor movement and unions’ activism have been the motors for the emancipation of most disadvantaged classes in Europe, in the United States trade unions have always fought in order to exclude Afro-Americans from the most remunerated and qualified professional positions, preserving the privileges of their white members. Thus anti-discrimination law has been also used as an instrument for political institutions to undermine trade unions power to control the labor market in favor of white, more skilled workers.28
In the industrial and post-industrial era, labor law has represented the most important legal instrument for the emancipation of disadvantaged categories. Since American social stratification is fundamentally grounded on gender and ethnicity (or “race”), it is not surprising that the economic disparity between positions within the employment relationship and the labor market have been prevalently tackled by measures aimed to eliminate discrimination.
For these reasons anti-discrimination law constitutes the major part of American employment law and the most relevant body of limits to the powers of the employer.29 This is quite clear from the words of Mr. Justice Powell, in the seminal opinion delivered by the US Supreme Court on discrimination. In McDonnell Douglas Co. v. Green, the Court held that:
The language of Title VII makes plain the purpose of Congress to assure equality of employment opportunities and to eliminate those discriminatory practices and devices which have fostered racially stratified job environments to the disadvantage of minority citizens.30
From this point of view, the US case is remarkably different from the European one. In Europe political concerns related to the emancipation of the working class have determined the evolution of labor law since the nineteenth century. The economic disadvantages of certain groups of individuals were not related to other factors concerning their personal conditions. More schematically, in Europe you are poor because you are poor; while in America you are poor because you are African-American, Latino or Chinese.
The case of gender discrimination necessitates a different reasoning, since it has always been spread both within American and European society, and it is not by chance that the prohibitions of gender discrimination are key to European anti-discrimination law. Nonetheless, in Europe anti-discrimination provisions have developed in a general framework where case law and statutes had already provided for general limits to the powers of employers, in order to counterbalance the economic submission of workers to the supremacy of companies.
On the contrary, in US employment law, anti-discrimination provisions provide for the strongest and more extended body of limits to the legal prerogatives of employers.31 The Congress has adopted them in order to counteract an original and unlimited power of the enterprise to decide the destiny of the employment relationship, based on the common law “at will employment doctrine”, on whose basis “all may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for morally wrong cause, without being thereby guilty of legal wrong”.32
It is clear that anti-discrimination law performs an extremely different role within US employment law and the employment laws of European Countries. Instances for challenging economic and social exclusion have issued in two different normative techniques within the two different contexts. American employment law provides for a structured body of anti-discrimination provisions in order to limit the discretionary power of the employer to dismiss the worker. European legal systems originated a more general and systemic technique for regulating the employer’s power, based on the reasonableness principle.
It is not by accident that, within the European context, anti-discrimination law has seen a massive development at the European level and not at the level of the single Member States. In fact, unlike domestic laws, the European legal system does not have a highly developed social legislation and already consolidated techniques for counterbalancing the social primacy of employers over workers and employees.
Moreover, the possibility that the increase of anti-discriminatory measures could respond to the general improvement of the conditions and treatments of workers has recently been challenged. It has been argued that this legislative trend has a causal relation with the dismantling of the traditional welfare state system. Thus, the anti-discrimination principle would have nothing to do with a project of emancipation of disadvantaged classes. On the contrary, it would represent the “appealing” face of “a process whereby the protection of the interests of employees becomes secondary to securing their interest in employment and employability, for the sake of economic stabilization”33 and “disguise the unions’ lack of ability to address social concerns”.34
Within Italian law the Civil Code and the statutory provisions determine an organic body of rules, imposing a reasonable exercise of enterprise’s prerogatives.35 Anti-discrimination law is relegated to a residual role, aimed at counteracting only specific behaviors36 that undermine the personal dignity of workers, with more effective actions.