Employer Cannot Dismiss Employees for Refusing to Relocate Hundreds of Kilometers — EU Court
The EU Court ruled that employers do not have the right to avoid obligations related to collective dismissals by significantly changing working conditions. If employees refuse to relocate to a new workplace and are subsequently dismissed, such dismissals may be considered layoffs rather than a consequence of the employee's personal decision.
The case involved an Italian company manufacturing electric generators. The company closed its production site near Naples in southern Italy and moved production to the island of Sardinia, located hundreds of kilometers away across the sea.
Employees were offered to relocate to the new workplace. Some employees refused to change their residence, after which the company dismissed them allegedly for absenteeism due to not showing up at the new site.
Why employees challenged dismissals after refusing to relocate
The employees argued that it was not about absenteeism but a disguised collective dismissal. In their view, after the closure of the plant near Naples, they had no real opportunity to continue working without a radical change in their lives.
The company insisted that employees lost their jobs due to failure to comply with a lawful transfer order and absence from the workplace for more than 30 days.
What decision did the EU Court make regarding collective dismissals
The judges in Luxembourg supported the employees' position.
The ruling states that termination of an employment contract after an employee refuses to agree to a unilateral employer decision to relocate the workplace far from the previous location falls under the concept of layoffs.
The Court emphasized that the workplace is often one of the key terms of the employment contract. Its change can have significant economic, social, and family consequences for the employee.
In this case, the relocation was permanent, occurred after the closure of the previous production, and required moving to another island. Under such circumstances, it is not a regular transfer of employees but a substantial change of fundamental working conditions.
What guarantees does EU legislation provide to employees
According to EU legislation, employers planning mass layoffs are obliged to inform employee representatives in advance and conduct consultations with them.
These procedures allow employees to receive explanations about the reasons for the layoffs, assess possible alternatives, and protect their rights before the dismissal decision takes effect.
The Court also rejected the argument that such dismissals should not be counted when determining the threshold for triggering collective dismissal procedures. According to the judges, a different approach would weaken employee protection and create opportunities to circumvent European labor guarantees.
What the EU Court decision means for employers and employees
Andrea Allamprese, Associate Professor of Labor Law at the University of Modena and Reggio Emilia, noted that the decision closes a potential loophole for employers.
According to him, an employer cannot avoid obligations related to collective dismissals by unilaterally and significantly changing key working conditions and then presenting employees' reactions as their personal choice.
Silvia Rainone, Senior Researcher at the European Trade Union Institute in Brussels, believes the decision is significant for the entire European Union as it clarifies which cases of job loss should be considered when applying protection mechanisms against mass layoffs.
What will happen next in the case of the Italian company
Despite the EU Court ruling, the employees have not yet achieved a final victory.
The case has been sent back to the court in Naples, which must apply the European court's interpretation to the specific circumstances of the dispute and make a final decision.
At the same time, the EU Court's conclusions are binding for national courts of EU member states, so the key legal issue in this case has already been effectively resolved.
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