JUDGMENT NO. 90

YEAR 2024

ITALIAN REPUBLIC

IN THE NAME OF THE ITALIAN PEOPLE

THE CONSTITUTIONAL COURT

composed of:

President:

Augusto Antonio BARBERA

Justices: Franco MODUGNO, Giulio PROSPERETTI, Giovanni AMOROSO, Francesco VIGANÒ, Luca ANTONINI, Stefano PETITTI, Angelo BUSCEMA, Emanuela NAVARRETTA, Maria Rosaria SAN GIORGIO, Filippo PATRONI GRIFFI, Marco D’ALBERTI, Giovanni PITRUZZELLA, Antonella SCIARRONE ALIBRANDI,

has rendered the following

JUDGMENT

in the proceedings concerning the constitutional legitimacy of Article 8, paragraph 4, of Legislative Decree No. 22 of March 4, 2015 (Provisions for the reorganization of legislation on social shock absorbers in the event of involuntary unemployment and the relocation of unemployed workers, implementing Law No. 183 of December 10, 2014), initiated by the Ordinary Court of Turin, acting as a labor court, in the proceedings between M. Z. and the National Social Security Institute (INPS), by order of December 6, 2022, registered as No. 131 in the register of orders for 2023 and published in the Official Gazette of the Republic No. 41, first special series, of the year 2023.

Seen the deed of constitution of INPS, as well as the deed of intervention of the President of the Council of Ministers;

Heard in the public hearing of April 9, 2024, Justice rapporteur Giovanni Amoroso;

Heard the lawyers Mauro Sferrazza and Massimo Boccia Neri for INPS, as well as the State Attorney Pietro Garofoli for the President of the Council of Ministers;

Deliberated in the council chamber of April 10, 2024.

Considered in Fact

1.– By order of December 6, 2022 (r. o. No. 131 of 2023), the Ordinary Court of Turin, acting as a labor court, has raised, with reference to Articles 3, 4, first paragraph, 36 and 41 of the Constitution, questions of constitutional legitimacy of Article 8, paragraph 4, of Legislative Decree No. 22 of March 4, 2015 (Provisions for the reorganization of legislation on social shock absorbers in the event of involuntary unemployment and the relocation of unemployed workers, implementing Law No. 183 of December 10, 2014), insofar as it provides, without the possibility of assessing the specific case, the obligation to return the entire advance of the New Social Insurance for Employment (hereinafter: NASpI) if the beneficiary enters into a subordinate employment contract within the expiry date of the period for which the allowance is recognized.

1.1.– Regarding the facts, the referring court reports that, following the termination of the employment relationship due to dismissal for justified objective reasons and the consequent state of involuntary unemployment, the worker had requested the advance payment of the NASpI allowance, which he was entitled to until May 28, 2021, in order to start the entrepreneurial activity of a commercial establishment (a bar). The application was accepted on September 23, 2019, and the amounts, which would have been due on a monthly basis, were paid to him in a single solution.

The referring court also reports that, in the a quo proceedings, the applicant produced the tax returns for the year 2019 and for the year 2020, and that the latter showed a lack of income resulting from the closure of the bar established by emergency decree due to the COVID-19 pandemic that broke out in 2020. For this reason, the applicant had decided not to continue the business and, on February 15, 2021, started a new permanent subordinate employment relationship. The company had been sold on April 30, 2021, for a price much lower than the one initially paid to acquire it (almost one-tenth of the purchase price).

Since the worker had entered into a subordinate employment relationship (on February 15, 2021) before the term covered by the NASpI had expired (May 28, 2021), the National Social Security Institute (INPS), by letter of October 5, 2021, asked him to return the entire amount paid as an advance payment of the NASpI, equal to €19,796.90.

The worker, therefore, filed an objection against this request, asking for the ascertainment that the alleged undue payment, which was the subject of the repayment demanded by the Institute, was not due.

INPS intervened, stating that its claim was based on Article 8, paragraph 4, of Legislative Decree No. 22 of 2015.

At the request of the applicant, the referring court raised the questions of constitutional legitimacy of the indicated provision.

1.2.– Regarding the relevance, the order states that – since the applicant had obtained the advance payment of the entire NASpI treatment, in the presence of the legal requirements, such as the involuntary termination of the employment relationship and the related previous contributions – the stipulation of a subordinate employment contract during the period to which the NASpI refers entails the obligation to repay the entire sum received, due to the literal application of Article 8, paragraph 4, of Legislative Decree No. 22 of 2015.

In fact, the start of the employment relationship is dated February 15, 2021, i.e. during the period covered by the unemployment allowance, which would have continued until May 28, 2021.

Therefore, in the event of a declaration of constitutional illegitimacy of this provision, the basis of the repayment claim made by INPS would be lost. Hence, the relevance of the issues raised.

As for the lack of manifest unfoundedness, the referring court acknowledges that this Court, with judgment No. 194 of 2021, has already examined the challenged provision, declaring the relative question unfounded, but that it would have concerned a case not assimilable to the one under examination.

In particular, in the case already examined, the worker had entered into a subordinate employment relationship, albeit for a few days, while still carrying out the business activity.

Therefore, the principles affirmed in the aforementioned judgment would not be applicable to the case in question, since the applicant had actually undertaken and then carried out an entrepreneurial activity (a commercial establishment for refreshments), also bearing considerable costs to take over a business, only to have to give it up in the face of an absolutely unforeseeable event such as the pandemic emergency.

In the opinion of the referring court, the provision under challenge would conflict with Article 3 of the Constitution, with regard to the violation of the principle of reasonableness, in two respects; on the one hand, in cases of supervening impossibility of carrying out the business activity, the challenged provision would show an inconsistency between the full refund of the allowance received and the actual carrying out of the business activity; and a similar inconsistency would exist in terms of the disproportion of the effects.

In particular, the referring court points out that in the specific case the applicant purchased the commercial business from a third party for a cost equal to forty-five thousand euros, an amount greater than the amount advanced by INPS; the business was then carried out for more than a year between 2019 and 2021, but the COVID-19 pandemic, which occurred at the beginning of 2020, had a negative impact on the profitability of public establishments; this was demonstrated, in this case, by the lack of income for the year 2020 (it having been documented that revenues were equal to €4,414, and therefore exceeded by costs). The establishment of the subordinate employment relationship three months before the expiry of the NASpI period was justified by the applicant's need to obtain an income for basic subsistence needs.

The referring court observes that the full refund of the allowance received cannot find reasonable justification in the anti-evasion purpose when it is demonstrated, as in this case, that the entrepreneurial activity was started and continued also with the use of significant capital, only to be interrupted as a result of an unforeseeable event, in this case the pandemic linked to the spread of COVID-19, which forced the owners of commercial establishments to close them for not insignificant periods.

Regarding the lack of proportionality of the legislative reaction, the referring court points out that in judgment No. 194 of 2021, this Court did highlight how the legislator's choice "had been exercised in a not manifestly unreasonable way," also specifying that "it would be possible to hypothesize alternative criteria, characterized by some flexibility."

Ultimately – according to the a quo judge – the full refund of the advance payment of the NASpI would represent an unreasonable consequence in its rigidity, which leaves neither INPS nor the judge any room for assessment in relation to the specific case.

With specific reference to the case in question, the referring court affirms that the challenged provision, in providing for the full repayment of the advanced sum, would in any case be unreasonable, since the advanced amount was entirely used to purchase the economic activity, with the consequence that the full repayment would be excessively burdensome, also in light of the losses already suffered by the applicant, who sold the business for a price much lower than the purchase price. Furthermore, the disproportionality would also emerge from the consideration of the brevity of the period of the subordinate employment relationship, falling within that of the NASpI (only three months from its expiry).

There would also be a violation of Article 4, first paragraph, of the Constitution, which protects the right to work in its forms of dependent work (Article 36 of the Constitution) and self-employment (Article 41 of the Constitution).

In this regard, the referring court observes that the challenged provision prevents recipients of the advance payment from establishing a subordinate employment relationship for the entire period in which the NASpI is paid, under penalty of full repayment of the amount received. In its view, this is an inadmissible derogation from Article 4, first paragraph, of the Constitution, which generally recognizes the right to work.

There would also be a conflict with Article 36 of the Constitution, since, as a result of the provision under examination, the recipient of the advance payment would be faced with the choice of renouncing the performance of paid activity in order to avoid returning the amount received, depriving themselves of the income necessary for their subsistence.

Finally, there would be a conflict with Article 41 of the Constitution, in relation to the principle of free entrepreneurship that must also be recognized for recipients of the advance payment of the NASpI.

In conclusion, according to the referring court, the impact of the pandemic emergency on the concrete possibility of continuing the entrepreneurial activity constitutes an argument that requires a new intervention by this Court on the challenged provision, insofar as it provides for the obligation of full repayment of the advanced amount, without criteria of flexibility that allow the decision to be adapted to the specific case.

2.– By deed filed on October 30, 2023, the President of the Council of Ministers, represented and defended by the State Attorney General's Office, intervened in the proceedings, requesting that the questions be declared inadmissible and, in any case, unfounded.

2.1.– The State Attorney, first of all, raises the objection of inadmissibility of the questions of constitutional legitimacy, since the referral order would aim to introduce a vague precept, not characterized by precision and specificity, which would impose on INPS an extremely discretionary assessment regarding the demonstration, by the beneficiary of the benefit, both of the real initiation and continuation of the economic activity, and of the reasons that may have led to the closure of the business.

In particular, the state defense highlights that the decision on the an and the quantum of the repayment of the advance payment would be conditional on the verification of exceptional factors, identified by the notions of supervening impossibility and unforeseeable event, as indicated in the referral order.

In this regard, recalling the aforementioned judgment No. 194 of 2021, the state defense affirms that the temporary restriction during the carrying out of the business activity, for which the advance payment was made, would not prevent the worker from carrying out other self-employment activities as well.

On the merits, the State Attorney affirms that, with reference to the violation of the constitutional parameter under Article 3 of the Constitution, the question has already been deemed unfounded in the aforementioned judgment No. 194 of 2021.

Specifically, it argues that the eventual necessary cessation of the entrepreneurial activity falls within the scope of the normal business risk that weighs on every entrepreneur.

The state defense then observes that, precisely to deal with the pandemic emergency, the legislator has provided for measures to support all workers harmed by this exceptional event and in a situation of economic weakness, and as such deserving of protection (self-employed workers, coordinated and continuous collaborators, artisans, traders, and professionals).

These are the interventions under Articles 27, 28, 44 and 44-bis of Decree-Law No. 18 of March 17, 2020 (Measures to strengthen the National Health Service and economic support for families, workers and businesses related to the epidemiological emergency from COVID-19), converted, with amendments, into Law No. 27 of April 24, 2020; under Articles 78 and 84 of Decree-Law No. 34 of May 19, 2020 (Urgent measures regarding health, support for employment and the economy, as well as social policies related to the epidemiological emergency from COVID-19), converted, with amendments, into Law No. 77 of July 17, 2020; and, also, under Articles 9 and 13 of Decree-Law No. 104 of August 14, 2020 (Urgent measures for the support and revival of the economy), converted, with amendments, into Law No. 126 of October 13, 2020, and under Article 15 of Decree-Law No. 137 of October 28, 2020 (Further urgent measures regarding the protection of health, support for workers and businesses, justice and security, related to the epidemiological emergency from COVID-19), converted, with amendments, into Law No. 176 of December 18, 2020.

With specific reference to entrepreneurial activities, the non-repayable grants provided for by Article 25 of Legislative Decree No. 34 of 2020, as converted, and by Article 1 of Legislative Decree No. 137 of 2020, as converted, are also relevant.

According to the state defense, the negative effects deriving from the pandemic cannot be configured as events of force majeure suitable for releasing the subjects from the restitution obligations arising in the context of ordinary legal relations.

Finally, the State Attorney points out the lack of foundation of the censures referred to the violation of Article 4, first paragraph, of the Constitution, since the provision does not provide for any prohibition on assuming a subordinate employment relationship, but only provides for the obligation to return the incentive disbursed to undertake the self-employment activity.

The challenged provision would also be consistent with Articles 36 and 41 of the Constitution, since the ratio underlying it is in accordance with the policies to combat unemployment and increase employment, as stated in judgment No. 194 of 2021.

3.– By deed filed on October 27, 2023, INPS constituted itself in the proceedings, claiming, as a preliminary matter, the inadmissibility of the questions.

The Institute observes that the referral order does not contain the formulation of a specific and determined petitum, not indicating the direction of the requested addition.

On the merits, the defense of the Institute supports the lack of foundation of the questions for the reasons indicated in judgment No. 194 of 2021.

It is not decisive that the entrepreneurial activity was actually started and carried out for about a year, since, as established in the aforementioned judgment, what is relevant is the establishment of a subordinate employment relationship during the period in which the periodic benefit would have been paid.

According to INPS, the observation that the pandemic severely affected entrepreneurial activities, and in particular public establishments and especially "bars," would not be relevant. In all cases of undertaken commercial activity, an accepted business risk is inherent, connected to the modification of the factual and economic conditions of the activity.

Furthermore, the Institute referred to the income support measures for self-employed workers and entrepreneurs during the COVID-19 pandemic.

Regarding the further profile of censure, namely the lack of proportionality inherent in the obligation of full repayment, INPS recalls the statement contained in judgment No. 194 of 2021, according to which this obligation is not a sanction.

Nor could the fact of having sold the business at a reduced price be relevant, as it is a factual inconvenience, especially in the face of the remedy of the general action for rescission ex Article 1448 of the Civil Code, which could have been resorted to in order to recover the evident disproportion between the value of the commercial activity and the price paid by the third-party buyer.

The alleged violation of Article 4, first paragraph, of the Constitution would also prove to be unfounded, since the challenged provision does not at all prevent the establishment of an employment relationship, given that the repayment of the advance payment of the NASpI responds to a criterion of self-responsibility of its recipient.

The purpose of the incentive for self-entrepreneurship is to direct the unemployed worker towards self-employment activities in order to reduce pressure on the subordinate labor market.

As for the alleged violation of Article 36 of the Constitution, the Institute argues that any objective undue social security payment entails, pursuant to Article 2033 of the Civil Code, the necessary full repayment, possibly according to an installment plan, as provided for by the internal regulations of the same Institute.

The violation of Article 41 of the Constitution would also be excluded, since the repayment of the incentive responds to a criterion of self-responsibility of the recipient. In any case, this would fall within the scope of the discretionary choices of the legislator.

3.1.– By memorandum filed on March 16, 2024, INPS reiterated its arguments on the point of the manifest unfoundedness of the questions of constitutional legitimacy.

Considered in Law

1.– By order of December 6, 2022 (r. o. No. 131 of 2023), the Court of Turin, acting as a labor court, raised, with reference to Articles 3, 4, first paragraph, 36 and 41 of the Constitution, questions of constitutional legitimacy of Article 8, paragraph 4, of Legislative Decree No. 22 of 2015, insofar as it provides, without any possibility of assessing the specific case, the obligation to return the entire advance payment of the NASpI if the beneficiary enters into a subordinate employment contract within the expiry date of the period for which the allowance is recognized.

2.– The referring court reports that it has been assigned a judgment on the objection against the request of INPS for the full repayment of the advance payment of the NASpI, paid to the applicant worker, as an incentive for self-entrepreneurship to undertake the activity of a commercial establishment for refreshments (a bar).

After having clarified that in the case in question the advance payment of the allowance had been paid in a single solution in relation to amounts due until May 28, 2021, the a quo judge acknowledges that the applicant has demonstrated, by attaching documentation, that he has not obtained any income due to the interruption of the commercial activity, which took place in accordance with the emergency decrees adopted during the pandemic that broke out in March 2020; for this reason, the applicant had accepted a fixed-term job on February 15, 2021.

Based on Article 8, paragraph 4, of Legislative Decree No. 22 of 2015, INPS requested the repayment of the entire amount paid as NASpI, equal to €19,796.90, because the objector had entered into the subordinate employment relationship during the period covered by the allowance.

Having clarified this, the referring court argues that the indicated provision is affected by constitutional illegitimacy insofar as it provides for the obligation of full repayment of the NASpI advance payment, in the event that the beneficiary has entered into a subordinate employment contract within the expiry date of the period for which the allowance is recognized, without allowing the judge to adapt the decision on the repayment obligation to the specific case in which the entrepreneurial activity has become impossible due to supervening causes, as happened in this case, as a result of the pandemic emergency.

According to the referring court, there would be a conflict with Article 3 of the Constitution, with reference to the principle of reasonableness and the principle of proportionality, since the full repayment would not find any justification, proving to be excessively burdensome, where the interruption of the entrepreneurial activity, actually started, is due to a supervening impossibility.

Articles 4, 36 and 41 of the Constitution would also be violated, because the provision for the repayment of the entire amount of the NASpI would conflict with the constitutional precept that recognizes the right to work, in the dual form of dependent work and self-employment.

The referring court points out, in fact, that the challenged provision, on the one hand, prevents recipients of the advance payment from establishing a subordinate employment relationship for the entire period in which the NASpI would have been due, unless they suffer the full repayment of the allowance, except for undertaking the path of self-employment; a choice that is not possible due to the economic crisis caused by the pandemic; on the other hand, it ends up negatively affecting the freedom to carry out an entrepreneurial activity, since the recipients of the advance payment of the NASpI would be obliged to continue an entrepreneurial activity in any case until the end of the period covered by the measure.

3.– First of all, with regard to the profile of the admissibility of the questions, it is necessary to examine the exceptions of INPS and the President of the Council of Ministers, which substantially stem from the same considerations.

Both the state defense and that of the Institute assume that the referral order lacks a specific and determined petitum, since it would not indicate the direction of the addition requested for the reductio ad legitimitatem, also presenting mere factual inconveniences.

More specifically, the State Attorney's Office argues the inadmissibility of the questions because the order would aim to introduce a vague precept, not characterized by precision and specificity, which would impose on INPS a highly discretionary assessment both for the purposes of demonstrating the actual start and continuation of the economic activity and the reasons that led to the non-continuation, and as regards the objective criteria for the quantification of losses and gains connected to the entrepreneurial activity and to the non-voluntariness of the cessation of the activity.

According to the defense of INPS, then, it would not be clear whether the referring court intends to request the full cancellation of the rule or a manipulative intervention, which is not allowed, moreover, since it falls within a sector in which the resolution of problematic aspects of labor policies falls to the legislator.

3.1.– The exceptions are unfounded.

In this regard, it should be emphasized that this Court, in judgment No. 194 of 2021, concerning a question of constitutional legitimacy concerning the same provision challenged today (infra, points 5 and 5.1.), rejected a similar objection of inadmissibility, stating that "in general, the order referring questions of constitutional legitimacy does not necessarily have to conclude with a provision also containing a petitum, it being sufficient that the content and direction of the censures emerge clearly from the overall tenor of the motivation (judgment No. 175 of 2018), it being up to this Court, if the alleged vice of constitutional illegitimacy is found to exist, to identify the provision most suitable to remove such vice."

In the same judgment, it was also specified that in cases in which the petitum is of an additive nature, "the question is inadmissible only if the referral order omits to indicate in a sufficiently circumstantial manner the direction of the addition that would be necessary for the reductio ad legitimitatem (judgment No. 175 of 2018)".

In fact, it is up to this Court, if it considers the questions to be founded, "to identify the pronouncement most suitable for the reductio ad legitimitatem of the challenged provision, not being bound by the formulation of the petitum of the referral order in compliance with the parameters evoked, also given that "the absence of constitutionally bound solutions" does not compromise the admissibility of the questions themselves (ex plurimis, judgment No. 59 of 2021) when a solution suitable to the reference parameter can be found in the legal system" (judgment No. 221 of 2023).

The exceptions of the State Attorney's Office and the defense of INPS are therefore unfounded, given that the a quo judge indicates, in a sufficiently complete manner, the content of the hoped-for additive pronouncement, where he doubts the constitutional legitimacy of Article 8, paragraph 4, of Legislative Decree No. 22 of 2015, insofar as it provides for the obligation of full repayment of the NASpI advance payment without the possibility of adapting this repayment obligation in the event that the continuation of the activity has been impeded by the supervening impossibility of carrying out the entrepreneurial activity and the beneficiary has entered into a subordinate employment contract within the expiry date of the period for which the allowance is recognized.

4.– Before examining the merits of the censures, it is first necessary to recall, in summary, the reconstruction of the evolution of the legislative framework of reference, already carried out by this Court in judgment No. 194 of 2021.

In particular, and for the purposes that are relevant here, it has been highlighted that the challenged provision, in order to favor the relocation of the involuntarily unemployed worker outside the subordinate labor market, allows the person entitled to the NASpI treatment to obtain its advance payment in order to start a self-employment activity, a business, or a cooperative.

More specifically, Article 8 of Legislative Decree No. 22 of 2015 establishes in paragraph 1 that "[t]he worker entitled to the payment of NASpI may request the advance payment, in a single solution, of the total amount of the treatment that is due to him and that has not yet been paid, as an incentive to start a self-employment activity or a sole proprietorship or for the subscription of a share of the share capital of a cooperative in which the mutual relationship has as its object the provision of work activities by the member."

However, if the worker establishes a subordinate employment relationship before the expiry of the period for which the advance payment of the NASpI is recognized, the challenged provision establishes that he is obliged to return "in full" the advance payment obtained, with the sole exception of the hypothesis in which the subordinate employment relationship is established with the cooperative of which the worker has subscribed a share of the share capital.

In the aforementioned judgment No. 194 of 2021, this Court emphasized how the prerequisite for the incentive in question – like those that constitute its precedents, namely the advance payment of the Social Insurance for Employment (ASpI), referred to in Article 2, paragraph 19, of Law No. 92 of June 28, 2012 (Provisions on the reform of the labor market from a perspective of growth) and, in a different regulatory context, the mobility allowance paid in advance ex Article 7, paragraph 5, of Law No. 223 of July 23, 1991 (Rules on wage supplementation, mobility, unemployment benefits, implementation of European Community directives, placement and other provisions regarding the labor market) – consists in facilitating the worker in undertaking a self-employment activity or starting a business in order to "favor the re-employment of the 'unemployed' worker in an activity other than that of subordinate work, in order to reduce the pressure on the relative market."

More recently, then, in judgment No. 38 of 2024 – which examined, with reference to Articles 3, first and second paragraph, and 41, first paragraph, of the Constitution, Article 7, paragraph 5, of Law No. 223 of 1991, insofar as "in the interpretation given to it by the settled case law of the Court of Cassation," it excludes the compatibility of the mobility allowance received in installments and periodically with the performance of a self-employment activity, imposing on the self-employed worker the need to request an advance payment, under penalty of loss of the right – this Court has highlighted that this method of disbursement also constitutes "a sort of financing intended for a purpose, that of investment in a self-employment or business activity, to cope with the initial expenses of the activity that the worker in mobility will carry out on their own, thus leaving the dependent labor market."

The disbursement of the NASpI, in advance and in a single solution, therefore constitutes, for the purpose it intends to pursue, a method of disbursement of the benefit that is completely peculiar compared to the "ordinary" disbursement of the same allowance; if the unemployed worker does not intend to take advantage of this incentive for self-entrepreneurship, the NASpI follows the discipline provided for, in particular, by Articles 5 and 7 of Legislative Decree No. 22 of 2015.

Outside of the option for advance disbursement, in fact, Article 5 of Legislative Decree No. 22 of 2015 establishes that "[t]he NASpI is paid monthly, for a number of weeks equal to half of the weeks of contribution of the last four years. For the purposes of calculating the duration, contribution periods that have already given rise to the payment of unemployment benefits are not counted [...]".

As for the conditionalities of the allowance, Article 7 of Legislative Decree No. 22 of 2015 prescribes, in paragraph 1, that "[t]he disbursement of the NASpI is conditional on regular participation in work activation initiatives as well as in professional retraining programs proposed by the competent Services pursuant to Article 1, paragraph 2, letter g), of Legislative Decree No. 181 of April 21, 2000, and subsequent amendments", also providing, in paragraph 2, "further measures aimed at conditioning the enjoyment of the NASpI to the active search for employment and reintegration into the production system", as well as, in paragraph 3, "the conditions and methods for the implementation of this provision as well as the measures resulting from non-compliance with the obligations to participate in the active labor policies referred to in paragraph 1", to be adopted by decree of the Minister of Labor and Social Policies "within 90 days from