1. Our report wants to analyse the basic principles about the system of sanctions for dismissals in Germany, Great Britain, France, Spain and Italy. Particularly, we have chosen to deal with three aspects: first, the comparative description, in all the countries, of each different sanction, with a few comments on reinstatement, reengagement and compensation, which are the main sanctions that we all know; an analysis of these sanction's function in our legal system shall follow with some explanatory notes about diverging interests between the parties to the employment contract; lastly, we shall comment about special costs that burden on the employer in case of dismissal for economics reasons, even if the latter is fair or lawful.
2. First of all it needs to be specified that we mean by the term sanction all consequences following an unlawful conduct. Practically the unlawful conduct we are going to consider is the employer's behaviours that violates the formal and material restriction imposed by law for dismissals.
3. As we said before, the main sanctions are three: the first is reinstatement, consisting in the integral re-establishment of the contract as if it had never been interrupted.
a) In Germany reinstatement is always established by law in any case of unlawful dismissal and the employer has to pay all the wages to the employee. Anyway this sanction is in fact very rare also because of the special trial rules that induce parties to negotiated arrangement leading to a compensation of damages. But we are going to come back to different forms of compensation in a few minutes.
b) In Great Britain it is up to the court to decide the reinstatement after having heard the employer and the employee about the concrete possibilities of implementation. In particular we can have this kind of alternative: 1) if the employee doesn't want to go back to the enterprise, which is the most frequent situation, he is entitled to a compensation according to the rules that we are goign ro see later; 2) if the employee is willing to go back, the judge has to verify the effective chances of reinstatement; 3) if reinstatement is not possible, the court could decide alternatively between reengagement, if possible, or compensation. In any case, if the worker is reinstated, he has the right to receive all the wages. Concluding we can notice that in G.B. only 2% of law cases end by a reinstatement.
c) In France we have to make a distinction between unfair and unauthorized dismissal. When it is unfair, reinstatement is only possible with the parties' assent expressed in front of the court. In case the dismissal is prohibited, or there are some irregularities with social schemes, it is up to the employee to decide between reinstatement or compensation. In France, as well, the employee reinstated is entitled to receive all the wages lost because of the unlawful dismissal.
d) In Spain, we note the different ruling between a void dismissal and an unfair one. In the first case reinstatement is an automatic consequence, no matter what the parties want. On the other hand, when the dismissal is unfair the employer has to decide not later than five days whether he wants to replace reinstatement by a high compensation. If he doesn't decide in five days since the court decision, he has to reinstate the worker.
e) Last, but not least, in the Italian legal system reinstatement is provided by law for enterprises employing more than 15 workers in the plant or in the council, or 60 all over the country. Reinstatement works when dismissal is unfair, discriminatory or uneffective. In case of discriminatory and collective dismissals, when something is wrong with the procedure or selection criteria, the judge can always order reinstatement. In all these situations, the employee is entitled to receive a compensation quantified by the amount of the wages lost because of the unlawful dismissal. But if the employee wishes so, he can renounce to come back in the enterprise having an extra compensation of 15 montly wages.
f) About reinstatement, we notice that there are considerable differences in our countries concerning the possibility to enforce the reinstatement order by an executive trial. For example, in Great Britain and in Italy this could not happen because enforcement of re-engagement positive obbligations is not allowed.
4. The second sanction is reengagement and it consists in drawing up a new employment contract. It means that the dismissal, even though unfair, has some effects. We have this sanction only in Great Britain and in Italy.
a) In Great Britain. the court, after consulting the parties, can order the re-engagement with the the employer's agreement when there is not a concrete possibility of reinstatement but there exists a different work place for the worker.
b) in Italy reengagement is provided by law for enterprises with less than 16 workers in the plant, or in the council, or less than 60 all over the country. Reengagement is possible only for unfair dismissal and is up to the employer to decide to have a new contract with the worker or to pay him a special indennity quantified by law. For all the cases of unlawful dismissal not protected by a special law (I refer, for example, to the case of a dismissal without effect in an enterprise with less then 15 workers) the protection is provided by the Law for contracts contained in the civil code.
5. Every country has got a special law ruling the different kind of compensation.
a) In Germany the source of compensation is mainly the agreement between parties (mostly in front of the court). This agreement can be individual or collective and usually it can freely determine the amount of compensation. In the collective agreement, the compensation is pursuant to the social sheme. The law establishes the amount of compensation (which is included in the range of 12/18 months of wages depending on age and years of service) only when cooperation between parties is no longer possible and, therefore, instead of the reinstatement.
b) When, due to the reasons that we have examined, reinstatement and re-engagement are not possible, in Great Britain the worker for every kind of unlawful dismissal is entitled to a settlement made of:
a basic allowance which amounts to a maximum of £ 6.000 pounds, depending on age, years of service, and weekly wages;
plus a compensatory bonus, which is incidental, and is valued by the court in equity. The maximum amount of this compensation is £ 12.000 pounds;
when the dismissal involves Health and Social Security representative agents or trade unionists, there is also a special allowance;
at last, an extra compensation is provided by law when the employer doesn't comply to the order of the court. This compensation includes up to 13 to 26 weekly wages.
c) In France if the dismissal is unfair and no reinstatement is foreseen, the compensation to the worker amounts to a minimum of 6 months wages, and the employer has also to pay an indemnity to the administration (max 6 months). In case of unauthorized dismissal, when there is no reinstatement, the worker is entitled to a compensation quantified by the lost wages, plus an extra compensation determined by the court.
d) In Spain when dismissal is unfair and the employer chooses compensation, this compensation is calculated by means of a legal formula (45d multiplied x daily wages x years of service). The maximum compensation can consist anyway in 42 months of wages.
e) In Italy, we have two kinds of compensation: 1) the first one is when the employee gives up the reinstatement, and in this case it consists in fiftheen monthly wages, as we said before, plus all the wages since the dismissal; 2) the other one is generally adopted for small enterprises with less than sixteen employees, when the employer refuses to reengage the worker. In this case the compensation can go from two monthly wages to fourteen.
6. From an other point of view, it is important to consider the different functions of each system of sanctions. In particular we notice that, first of all, there is a different relationship between protective and punitive aim and, secondly, that in some countries the legal system mostly leaves to the employer the choice between reinstatement and compensation, while in others, like in Italy, reinstatement is almost always imposed by law. The difference seems to depend on the interest that the law wants to protect.
In fact, on one case it seems to identify with the protection of the job, in the other mostly within the enterprise's organization.
Anyway all the legal systems want to garantee human rights. Therefore we can understand why in all our countries the strongest protection is against discriminatory dismissal.
7. The types of legal consequences we have been debating, take place in all cases of unlawful dismissals.
But it must be noted anyway that in our countries there are also economic consequences for the employer in case of lawful dismissals for economic reasons. In these cases we don't think it is a matter of sanction, in view of the fact that: 1) there isn't an unlawful conduct; 2) the burden imposed on the employer has different functions; for example, to reduce the social impact of unemployment, on the grounds of a solidarity principle; b) or, when the allowance is provided also for individual dismissal, to support each single dismissed worker on the ground of employment contract duties.
For example, also for lawful individual dismissal, in Great Britain we have redundancy payment, in Spain a special compensation, in France a contribute to the state plus a compensation to the worker.
It's different in Germany and in Italy where these kinds of costs are connected only to collective dismissal.