Salary deductions for employee damages: the Supreme Court confirms the need for prior disciplinary action when required by the collective agreement

By Enzo Bacciardi and Michele Sacchi –  Employment Law Department

With Order No. 26607 of 2 October 2025, the Italian Supreme Court reaffirmed an important principle: an employer cannot withhold amounts from an employee’s remuneration as compensation for damages without first adopting and communicating a disciplinary sanction, when such procedure is required by the applicable Collective Bargaining Agreement (CBA).

The case

A transport company made two withholdings from a warehouse worker’s salary for damages caused by improper use of a forklift. Between the first and second withholding, the company initiated a disciplinary procedure, which concluded with a written warning.
The employee challenged the decision, and the Court of Appeal of Brescia partially upheld the appeal, ordering the company to reimburse the first withholding. The Court confirmed the principle that a disciplinary sanction produces effects only once it has been communicated to the employee—not merely when it is adopted.

The legal framework

The Collective Bargaining Agreement for Transport, Logistics and Shipping (Article 32) provides that:
• the company may charge the employee for damages only after having imposed at least a written warning;
• the amount of damages charged to the employee depends on the seriousness of the conduct, the degree of fault, and the financial limits set by the agreement;
• recovery must occur through monthly instalments not exceeding one fifth of the employee’s remuneration.

The renewal of the 2024 CBA updated the liability thresholds and introduced new obligations for employers, including:
• the annual communication to trade union representatives regarding the company’s insurance coverage and any deductibles;
• the obligation to substantiate any claim for compensation with quotations or damage estimates;
• the nullity of the disciplinary procedure in case of failure to comply with these obligations.

The scope of the decision

The Supreme Court reiterated that disciplinary actions and compensation claims are distinct; however, when the CBA makes compensation conditional upon the imposition of a disciplinary sanction, compliance with such procedure becomes mandatory. Therefore, the employer cannot pursue damages without first completing the required disciplinary process.

The Court also clarified that:
• the employee’s liability must be assessed in light of their qualification, training received, and the complexity of their duties (Cass. civ. No. 22965/2013);
• the employer’s negligence or the absence of adequate preventive measures may reduce or exclude the right to compensation (Cass. civ. No. 26575/2025).

Pratical guidance for employers

The ruling confirms the importance of strictly following the contractual and disciplinary procedures before making any deductions from an employee’s salary.

In practical terms:
• a disciplinary notice, even when not mandatory, serves as a preventive safeguard for the employer;
• the disciplinary procedure allows the employer to formalize the employee’s responsibility and collect evidence for any subsequent claim for damages;
• the disciplinary notice helps prevent the withholding from being declared unlawful for breach of the CBA.

In summary, the Supreme Court’s decision strengthens the principle that, in employment relationships governed by structured collective agreements, the disciplinary procedure is not a mere formality but a substantive prerequisite for the legitimacy of any salary deduction made as compensation for damages.