“Replaced by AI”? The Rome Court clarifies the limits of dismissal

When is a dismissal due to crisis truly legitimate?

To understand the case, it is necessary to clarify what dismissal for objective justified reason entails, as regulated by Art. 3 of Law No. 604/1966. This is a termination that does not depend on the worker’s conduct, but on “reasons related to the production activity, the organization of work, and its proper functioning”.

Legitimate grounds include:

• elimination of a function or an entire department,
• outsourcing of activities previously done internally,
• closure of offices or loss of contracts leading to reduced operations.

The law recognizes the employer’s right to reorganize the business, under two conditions:

1. the reorganization must be genuine and not pretextual;
2. the dismissal must be a direct and necessary consequence of that decision.

Balancing entrepreneurial freedom and worker protection, the legitimacy of dismissal depends on three requirements:

• a concrete organizational or economic reason;
• actual elimination of the job position linked to the dismissed worker;
• compliance with the repechage obligation, i.e., documented and credible verification of the possibility to reassign the person to other available and compatible positions.

The employer is not required to create new roles but must verify whether there are alternative positions that can be assigned, even if different or lower, as long as they match the person’s skills.

In this case, the Court had to assess whether these three steps were genuinely followed.

Crisis, reorganization, and no possible redeployment

Before discussing legal principles, the Court conducted a very concrete reconstruction of the company structure and the reasons presented, starting from a clear methodological assumption: in dismissal for objective justified reason, the burden of proving the grounds lies with the employer.

From the investigation, it emerged that:

• the company was experiencing a financial and economic crisis, supported by various findings including conversion from S.p.A. to S.r.l., progressive staff reduction, eviction for rent arrears, and initiation of a negotiated business crisis procedure;
• the graphic design activity was progressively scaled down: some lines/projects were “frozen” and no longer updated graphically, while others had residual graphic needs handled by the team leader who “also uses artificial intelligence support”;
• as for repechage, redeployment was deemed unfeasible due to the core business requiring different professional profiles (software developers and cyber intelligence experts), and the lack of available alternative positions; the judgment also highlighted the difference in tasks between graphic design and roles like web/UX-UI, which involve different skills.

The Court, based on these facts, moved on to the legal principles, referring to the now well-established approach to dismissal for objective justified reason:

1. “the employer bears the burden of alleging and proving the impossibility of redeployment of the dismissed worker, as it is a requirement of justified dismissal”
   (Cass. No. 5592/2016; reaffirmed in Cass. Nos. 12101/2016; 27792/2017; 192/2019; 2739/2024)
2. “the employer’s burden to prove the impossibility of redeployment, being a negative fact, can be met not by the worker’s failure to suggest alternatives, but by presumptive evidence that all positions were filled at the time of dismissal and that no hires occurred shortly thereafter”
   (Cass. Nos. 6/2013; 6559/2010)
3. “once the impossibility of redeployment is proven, the absence of worker claims about available positions may support the employer’s case”
   (Cass. Nos. 12794/2018; 5996/2019)

The ruling shows that when reorganization is demonstrated and the position is actually eliminated, dismissal for objective justified reason can be considered legitimate if the employer proves the impossibility of redeployment, without being required to create new functions or alter the existing organizational structure.

On this basis, the Court rejected the employee’s appeal.

It remains to be seen what, concretely, was the role of artificial intelligence in the case.

Artificial intelligence and work: what the ruling (does not) say

Despite oversimplified headlines, the Rome Court ruling did not legitimize a dismissal “because the worker was replaced by AI”.

Artificial intelligence appears in the text only as an operational tool used during the reorganization phase, in a context where graphic activities had already been scaled down and were no longer central to the company.

What matters legally is not the use of AI per se, but proof that:

• the reorganization was real and driven by concrete needs;
• the job was effectively eliminated;
• no feasible alternatives for redeployment existed (repechage).

Blaming technology as the “cause” of dismissal risks shifting focus from legal facts to narrative. In court, the legitimacy of dismissal is based on objective, verifiable elements, not on corporate rhetoric.

The systemic issue remains: the framework of dismissal for objective justified reason – designed in a traditional industrial setting – is now applied to scenarios of rapid automation and algorithmic transformation.

The burden of proof remains essential, but the legitimacy threshold does not change, even as technologies, pace of change, and types of roles evolve.

Without legislative updates, courts will continue to assess these cases using tools devised for a different context. In this landscape, the key factor will not be artificial intelligence itself, but the company’s ability to demonstrate a coherent, economically justified, and formally correct reorganization.