ITA 
“Payments originating from the social security system that provides income replacement measures for employees are not deductible as aliunde perceptum from damages for non-establishment of the employment”.
Thus, the Court of Cassation with its judgment no. 12102 of 8 May 2023.
The case originates from the employee’s appeal against his employer aimed at ascertaining the existence of an employment relationship. The employment had been regularised by the employer for just a part of the effective performance’s period.
The Court of Appeal, reforming the Judge of first instance’s judgment, following an expert opinion ordered by the judge and a reconsideration of the proofs, declared ascertained the existence of the employment relationship in two periods (from May 2000 to September 2003 and from May 2005 and February 2007. The Employment relationship was regularised by the employer by no. 3 fixed-terms contracts, which did not cover all the effective employment’s period. Accordingly, the Court of Appeal ordered to the employer to pay all sums by way of salary differences in favour of the employee as a result of the failure to regularise the employment in terms of tax and contributions.
The employer challenged the judgment, claiming a motivation’s defect since the Court of Appel ignored the receipt of unemployment benefits by the employee, between the first and the second fixed terms contracts.
The Court of Cassation hearing the matter, recalling its orientation (see Judgments no. 9724/2017; no. 7794/2017 and no. 22428/2021) held that the complaint was unfounded and reiterated that sums originate by the social security replacing employees’ retribution, are not deductible as aliunde perceptum from damages for non-establishment of the employment. The Court continues clarifying that any non-payment of those amounts “gives rise to a social security debt recoverable, within law’s limits, by the social security institution”.
The Court of Cassation, as well as the Court of Appeal, held that the employee’s receipt of income benefits paid by the Social Security System was not in itself a sufficient circumstance to exclude the existence of the employment relationship, which had not been regularised from the tax and contribution points of view during the periods considered.
Therefore, continues the Court, “in this case, the social security institution is entitled to the recovery of the social benefits unduly paid, also due to the employer’s failure to regularise the employment relationship, which took advantage of unregistered work to the detriment of the employee and the social security institution itself”.