Employment 2020

Last Updated September 08, 2020

Italy

Law and Practice

Authors



aldocalza - employment and labor law firm is based in Italy and focuses on employment, labour and agency law, both in and out of court. The firm's areas of expertise include the management of employment relationships, postings, transfers, dismissals, company transfers, corporate restructurings, industrial relations, social security law, agency contracts, health and safety at work, and due diligence. The team provides expert legal assistance closely matched to the needs of each client; facing the challenges posed by the labour market and adapting flexibly to changes without a drop in the quality of its work. The firm has developed its expertise working alongside leading multinationals in many sectors (for example, fashion, sport, banking, finance, transport and pharmaceuticals); it is precisely this wide variety of clients that has provided aldocalza with its great versatility and broad experience.

Article 17bis of Legislative Decree No 241/1997, Amended by Article 4 of Law No 157/2019

Principals are bound to request from a (sub)contractor the documents that prove the payment of withholding taxes related to employees involved in the services (sub)contracted, if the service agreement provides:

  • an annual compensation higher than EUR200,000;
  • chiefly labour-only services performed at the principal's workplace; and
  • the usage of tools of the principal.

If the (sub)contractor does not provide the mentioned documents or has not paid the withholding tax, the principal must interrupt the payment of the compensation accrued by the (sub)contractor (within certain limits provided by the law) and notify it to the competent tax authority.

In cases of breach, the principal is subject to the same fine imposed on the (sub)contractor.

Article 47bis – 47octies of Legislative Decree No 81/2015, Introduced by Law No 128/2019

The Italian government has introduced a set of rules aimed at granting a minimum level of economic and legal treatment for the self-employed who deliver goods in the interest of third parties by bike or scooter within urban areas, if the working activities are performed through the usage of digital platforms.

The Wage Integration Fund for COVID-19 Emergency

The Italian government introduced a new wage integration fund to face the economic crises connected to the COVID-19 emergency; employers can benefit from the fund for nine weeks (this duration has been increased by a further nine weeks), plus four additional weeks in the regions most affected by the virus (Lombardy, Veneto, Emilia Romagna) in the period between 23 February 2020 and 31 October 2020 (a further increase in the duration of the fund is currently under discussion).

According to a new Decree, in force since 15 August 2020, (Decree No 104/2020), employers can benefit from an additional 18 weeks of access to the wage integration fund in the period between 13 July 2020 and 31 December 2020. An additional contribution of 9% or 18% of the total remuneration that would have accrued during the hours of suspension or reduction of activity shall be paid, respectively, by employers who had a reduction in turnover in the first half of 2020, compared to the first half of 2019, of less than 20% or less than or equal to zero. No additional contribution, on the other hand, is envisaged for employers who have had a reduction in turnover in the first half of 2020, compared to the first half of 2019, of 20% or more.

Conditional on the approval by the European Commission, which at the date of writing this text (August 2020) has not yet been given, employers who do not benefit from the additional 18 weeks of wage integration fund and who, in May and June 2020, have benefited from the wage integration fund, will be given a total social contribution exemption (excluding national health and safety insurance contributions) for a period not exceeding four months, available by 31 December 2020 and within the limit of twice the hours of the wage integration fund used in May and June; the same exemption is also granted to employers who have benefited from wage integration fund after 12 July 2020.

The COVID-19 Company Committee and Other Health and Safety Measures

Employers must build a committee (composed of an employer’s representative and trade union representatives) that is aimed at controlling the fulfilment by the company of the mandatory health and safety rules approved by the Italian government for limiting the further spread of COVID-19.

In this respect, during this emergency period, several measures have been approved by the Italian government for the purpose of limiting social contact and decreasing the spread of the virus. These include, inter alia:

  • the workplace’s periodic sanitisation;
  • the use of face masks when an interpersonal distance of at least one metre is not possible;
  • temperature screening at the entrance of workplaces; and
  • restricted access to external visitors.

The Banning of Collective Dismissals and Individual Dismissal for Business/Objective Reasons

Article 46 of Legislative Decree No 18/2020 banned collective dismissals and individual dismissal for justified objective reason for 60 days from 17 March 2020 to 17 May 2020 (the period has been postponed up to 17 August 2020), except for the case of the dismissal of an employee with executive status (so-called dirigenti). The collective dismissals procedure started on 23 February 2020 has been suspended for the same period.

According to the above-mentioned Decree No 104/2020, the period of ban has been further postponed to 31 December 2020 for most companies, according to the following rules:

  • No prohibition in case of dismissal for:
    1. change of contract of procurement with re-employment following the takeover of a new contractor;
    2. closing of the employer with termination of any business;
    3. bankruptcy; and
    4. dismissal on a voluntary basis according to a unions’ agreement
  • Prohibition of dismissal until the 18 weeks of wage integration fund access (introduced by Decree 104/2020) are completely exhausted, for those who decide to use them.
  • Prohibition of dismissal, until full enjoyment of the exemption from social security contributions (introduced by Decree 104/2020), for those who are entitled to it and who wish to benefit from it.
  • Prohibition of dismissal until 31 December 2020 for those who do not benefit from the wage integration fund or from the exemption from contributions.

The Postponement of Fixed-Term Contracts

Employers have been allowed to postpone or renew, without any of the reasons required by the ordinary legislation, fixed-term contracts up to August 30. The same postponement or renewal has been allowed, by 31 December 2020, for a further period up to 12 months according to Decree 104/2020.

Employees’ Categories

Under Italian law (Article 2095 of the Italian Civil Code or ICC) there are four categories of employees:

  • Executive (dirigente) - those employees, reporting directly to their employer or to another executive who is expressly delegated, who perform business activities requiring a high degree of professionalism with broad autonomy and discretion and a deal of initiative and with the power to provide guidelines to the entire company or to an autonomous part thereof; the qualification as an executive entails the involvement and co-operation, under the liability pertaining to such a position, in the achievement of the company’s interests and business purposes.
  • Middle-manager (quadro) – employees who perform (on a continuous basis) strategic activities for the development and/or implementation of their employer’s goals, although they are not enrolled in the executive category.
  • White-collar (impiegato) – employees who co-operate with the employer by carrying out intellectual activities (ranging from conceptual activity to purely executive duties) with different degree of autonomy (in any case, lower than executives and middle managers).
  • Blue-collar (operaio) – employees assigned chiefly to manual tasks and duties.

Distinction between Blue-Collar and White-Collar Work

The collective bargaining agreement applied by the employer (if any) provides for subcategories/levels (generally with regard to blue and white-collar work).

This distinction, however, has being losing importance. Currently, most national collective bargaining agreements (NCBAs) introduce a unified system of classification for blue and white-collar workers. Irrespective of the above, certain differences are still in place with regard to the legal and economic treatment granted to each category (eg, blue-collar workers are still paid on a daily basis while the salary of white-collar workers is calculated on a monthly basis; and in certain sectors the sickness indemnity for white-collar workers is charged, in whole or in part, to their employer, while the one for blue-collar workers is fully reimbursed by the Italian Social Security Contribution Institute (INPS).

Open-Ended Full-Time Employment Agreements

No-formal requirements are set forth by the law, and the parties can also execute the agreement orally, except for certain cases provided by the law (eg, maritime employment agreements).

However, employers are required to provide, in written form, certain information to the employee within 30 days from the hiring (eg, parties, workplace, starting date, category, remuneration, working-time, etc).

Moreover, Italian law provides that certain covenants must be agreed in written form before the hiring and if the parties do not respect the mandatory form the relevant covenant is null and void (eg, probationary period covenants and non-competition covenants).

Terms and conditions of the employment relationship

Generally, the main terms and conditions, from a legal and economic standpoint, of the employment relationship are set forth by the NCBA applied by the employer. The parties must not worsen the employee’s position by agreeing covenants that derogate from the mentioned minimum treatment.

If the employer does not apply any NCBA the minimum treatment is provided by the Law (eg, the ICC, Legislative Decree 66/2003, Legislative Decree 23/2015, etc).

Fixed-Term Employment Agreement

Fixed-term employment agreement must be agreed in written form before or at the date of hiring (a copy of the signed agreement must be delivered to the employee within five days from the hiring).

An employment relationship could be subject to a term if the relationship lasts no more than 12 months. The fixed-term relationship may have a longer duration (within the limit of 24 months) only if one of the following requirements is met:

  • temporary and objective needs not related to the employer’s ordinary activity;
  • replacement of other employees still in force; or
  • needs related to a temporary, significant and unforeseeable increase of the ordinary activities.

Fixed-term agreements can be extended freely during the first 12 months of duration; if, as a consequence of the extension(s), the relationship lasts more than 12 months the extension is lawful only if the duration of the relationship does not exceed 24 months and one of the above-mentioned “requirements” is met.

Italian Law allows a maximum of four extensions.

Renewals of fixed-term employment agreements can be agreed by the parties after a mandatory interruption (ten days if the length of the relationship does not exceed six months; 20 days in the other cases).

Prohibitions

Employers are prevented from hiring employees under a fixed-term agreement in certain cases (eg, replacing employees on strikes, hiring in production units where collective dismissals have been implemented or wage integration funds have been applied in the previous six months, or if the employer did not carry out the risk assessment evaluation pursuant to health and safety legislation).

Maximum duration

The entire relationship between the same employer and the same employee cannot exceed 24 months for the execution of the tasks and duties of the same category (and subcategory/level if applicable).

This limit takes into account renewals, extensions, previous fixed-term employment agreements (including those that occurred a long time before) and previous fixed-term temporary-work relationships (including those that occurred a long time before).

Certain exceptions to this limit are provided by the law and by collective bargaining agreements.

Maximum number of fixed-term employees

The number of fixed-term employees cannot exceed 20% of the number of an employer’s open-ended employees in force on 1 January of the relevant year (derogations are provided by the law and by NCBAs). The violation of this limit does not trigger the conversion of the fixed-term agreement into an open-ended agreement, only the application of a fine.

Priority right

Fixed-term employees with seniority in a company of at least six months have a priority right if, after the termination of the relationship, the employer hires open-ended (and in certain cases fixed-term) employees for the same tasks and duties.

Sanctions

The violation of the mandatory rules triggers the conversion (by a court) of the fixed-term contract into an open-ended contract; in addition, employers are sentenced to pay a lump-sum ranging from two to twelve months' worth the employee’s salary.

Full-Time Employment

An employee’s working-time is subject to the regulation set forth by collective bargaining agreements applied by their employer.

If the employer does not apply any collective bargaining agreements, the working time is regulated by Legislative Decree 66/2003, according to which:

  • the normal weekly working time is 40 hours per week;
  • the weekly working time cannot exceed 48 hours per week (including overtime activities) averaged over a four-month period;
  • overtime activities are allowed within the limit of 200 hours per year and an employee could be required to perform overtime only in certain cases (eg, exceptional technical and/or productive reasons that cannot be faced through the hiring of new employees, or particular events);
  • overtime activities must be remunerated in accordance with the NCBA; and
  • employees are entitled to one day of rest per week, 11 consecutive hours of rest per day and ten-minutes of break for every six working hours.

The violation of the listed rules could trigger the application of administrative or criminal sanctions.

Exceptions to the listed rules are provided by the law with regard to certain individuals (eg, executives, middle managers).

Part-Time Employment

Parties may agree three types of part-time employment agreements:

  • horizontal – a reduction of the daily working time (the part-timer has the same number of working days as the full-timers);
  • vertical – a reduction of the number of working days/weeks/months with respect to full-timers (the part-timer has the same daily working time as the full-timers); and
  • mixed – a combination of horizontal and vertical part-time work.

Part-timers could be hired under an open-ended employment agreement as well as a fixed-term employment agreement.

Formal requirements

Part-time contracts must be executed in written form so as to be evidenced.

In the agreement the parties must indicate the calendar of the part-timer’s working activities.

Elastic covenants

The parties may agree on a so-called elastic covenant, according to which the employer could require the part-timer to perform his or her tasks and duties:

  • in months/weeks/days/hours different from the ones indicated into the calendar agreed; and/or
  • in accordance to a working-time different from the reduction agreed.

The terms and conditions of the so called elastic covenant are set forth by the NCBA applied by the employer.

Employers who do not apply an NCBA may agree the elastic covenant with a part-timer on the conditions provided by the law (eg, a two-day notice for the new working-time and special remuneration).

According to the Italian Constitution (Article 36), employees are entitled to receive a salary that is proportionate to the quality and quantity of their working activities and, in any case, sufficient to allow them (and their family) to have a free and dignified existence.

According to main decisions of the Italian Supreme Court, the Constitutional wage is equal to the minimum wage provided by the NCBA for the business sector in which the employee is employed.

Therefore, employers are not allowed to pay a salary lower than the Constitutional wage/minimum wage provided by the NCBA; if this mandatory rule is violated, an employee is entitled to obtain payment of his or her outstanding salary.

This mandatory rule is also applicable also to employers who do not apply any NCBA (they are obliged to grant their employees the minimum wage provided by the NCBA of their business sector).

The minimum wage is different from NCBA to NCBA and depends on the category and subcategory/level of the employee (generally, NCBAs provides an increase of salary that depends on the length of service of the employee).

NCBAs provide the number of instalments in which the salary should be paid. According to Italian law, this number cannot be lower than 13.

Employers are free to grant their employees a so called superminimum (ie, a portion of the salary exceeding the minimum wage); the superminimum could absorb (totally or partially) possible increase of the minimum wage provided by the NCBA (absorbable superminimum).

In addition to the minimum wage, NCBAs provide special indemnity related to specific tasks performed by the employee or indemnify the employee from uncomfortable working conditions (also with regard to the working-time).

In addition to the salary, employers may grant employees company tools for the execution of their tasks and duties; if these tools are also used for personal purposes, the value of the usage for personal purposes is part of the employee’s remuneration.

Employers are not obliged to grant their employees with bonuses (however different provisions could be provided by the NCBA applied).

Holidays

Employees are entitled to a mandatory period of paid holiday, the length of which is quantified by the NCBA applied by the employer. This period cannot be less than four weeks per year, two weeks should be taken by the employee during the year of accrual and the remaining two should be taken within 18 months following the year of accrual.

Employers are not allowed to pay an indemnity in lieu of the holidays accrued and not taken with regard to the minimum period set forth by the law except in the case of termination of the employment relationship.

Maternity Leave

Mothers are entitled to abstain from work for a five-month period; the (paid) leave shall begin not earlier than two months before the estimated date of childbirth and shall end not earlier than five months after the date of childbirth.

During their leave, mothers are entitled to receive the payment of an indemnity from INPS, equal to 80% of their salary. Generally, NCBAs oblige the employer to pay an amount equal to the difference between the employee’s full salary and the amount of the indemnity.

Paternity Leave

With regard to births occurring in 2020, fathers are entitled to paid leave of seven (continuous or not) days that must be taken within five months from the birth. In addition, fathers may benefit from one additional day of (paid) leave, if the mother waives one day from her maternity leave.

In certain cases provided by the law, fathers can benefit from the same treatment granted to mothers (eg, death or serious illness of the mother, or mother's abandonment of the child).

Adoption

Adoptive parents are entitled to the same rights granted to birth parents.

Parental Leave

Employees are entitled to benefit from a period (continuous or not) of parental leave during the first 12 years of the child’s life, equal to six months for each parent.

The parents cannot benefit from a total period of parental leave of longer than ten months for each child (exceptions are provided by the law).

Employees are entitled to receive from INPS the payment of an indemnity equal to 30% of their salary for the days of leave taken within the first six years of the life of the child (for a maximum of six months per child).

Other Leave

Other particular leaves are granted by the Law and NCBAs to employees with or without parental status (eg, for breastfeeding breaks, a disadvantaged or sick child, study leave, marriage breakdown, donation of blood, elections, and trade unions activities).

Leaves/breaks connected to disadvantaged status

Italian law grants leave and breaks to both disadvantaged employees and employees who have the custody of disadvantaged individual(s), the conditions, limits and durations of which are provided by the Law (eg, Legislative Decree 151/2001 and Law 104/1992).

Illness/injury

According to Article 38 of the Italian Constitution, employees have the right to be granted adequate means of subsistence in the event of illness or injury. Furthermore, Article 2110 of the ICC recognises the right of the sick or injured employee to maintain his or her job for a period of time set forth by the NCBAs (guaranteed sick leave).

Only after this period has elapsed the employer can terminate the relationship.

The existence of the sickness status must be certified by a doctor of the Italian health system; employers can check the effectiveness of the sickness only through this system.

During their sickness leave employees are entitled to receive an indemnity provided by INPS or by their employer in the cases set forth by the law (eg, where they are executives, middle managers and white-collar workers in the manufacturing sector). NCBAs could provide different provisions (usually an addition to the indemnity that grants the employee a total indemnity equal to his or her normal salary).

Confidentiality requirements

During the employment relationship the ICC obliges employees to carry out their duties with loyalty (this obligation includes non-disparagement and confidentiality obligations).

The breach of these loyalty obligations may trigger the dismissal for just cause.

After the termination of the employment relationship, employees are subject to criminal sanction if they disclose confidential information of their employer (as defined by the Italian Criminal System) and can be bound to non-disparagement and confidentiality obligations (also regarding information other than the “confidential” ones defined above) only if agreed with the employer (also at the time of the hiring).

According to the ICC, employees cannot act in competition with their employer during the employment relationship (breaches of this obligation may trigger a dismissal for just cause).

After the termination of the employment relationship (for whatsoever reason), employees can be bound to non-compete obligations only if a specific agreement aimed at this has been agreed with the employer.

Non-competition clauses/agreements must:

  • be agreed in written form;
  • be limited to a specific geographical area and a specific activity;
  • not exceed a five-year period (for executives) and a three-year period (for non-executive employees); and
  • set out a fair level of remuneration for the employee that takes into account the duration, the area and the type of business that is prohibited.

It is a common practice to agree in the covenant to a penalty in case of breach of the non-competition obligations; however, the existence of the penalty does not prevent the employer from claiming additional damages in front of a court. In the judicial proceeding, the employer could ask the court to inhibit the former employee from continuing with their unlawful behaviour.

In general, Italian law does not regulate non-solicitation clauses and the mandatory rules provided for non-competition clauses do not apply to solicitation. However, according to the Italian courts, the clause must be agreed in written form (also in the employment agreement) and the employee is not entitled to receive any remuneration for the obligation.

Employers may process employees’ personal data for the sole purpose of the execution of the employment relationship; the collection and retention of the data must be implemented in accordance with EU Regulation No 679/2016 (the GDPR) and Italian legislation (Legislative Decrees No 101/2018 and No 51/2018, etc).

Employers (the data controller) must provide employees with the following information:

  • the identity and contact details of the controller, the controller’s representative and the data protection officer;
  • the purpose of the processing for which the personal data is intended as well as the legal basis for the processing;
  • the legitimate interests pursued by the controller (except where such interests are overridden by interests of fundamental rights and freedoms of personal data);
  • the recipients of the personal data if any; and
  • the fact that the controller intends to transfer personal data to a third country or an international organisation (if applicable)

In addition, employers must provide the following information:

  • the period of data retention;
  • an indication of the employees’ right to request access to and rectification or erasure of personal data;
  • an indication of the employee's right to withdraw consent to the collection of data at any time in the cases provided by the law;
  • the right to lodge a complaint with the relevant supervisory authority;
  • whether the provision of personal data is a statutory or contractual requirement, or a requirement necessary to enter into a contract, as well as whether the data subject is obliged to provide the personal data and the possible consequences of failure to provide such data; and
  • the existence of automated decision-making, including profiling and meaningful information about the logic involved, as well as the significance and the envisaged consequences of such processing for the employee.

The privacy laws provide the cases in which the consent is not necessary.

Employers must be able to demonstrate that employees have consented to the processing of their personal data (the consent must be specific, informed and unequivocal).

The data controller (or its representative) must keep a record of the processing operations carried out under his or her responsibility.

The fulfilment of the mandatory rules on privacy allows the employer to control the tools used by the employee for carrying out his or her tasks and duties (eg, emails, computer and phone) to the extent that the employer has informed its employees on the conditions of usage of the tool and how the power of control is exercised by the employer over the tools (if the mentioned conditions are not met, the employer cannot use the data unlawfully acquired).

EU citizens can freely move, establish themselves and work in any EU member state, while non-EU citizens are subject to immigration procedures.

Mandatory provisions and procedures are provided by the law in cases of secondment by an EU employer of employees to Italy.

The hiring of non-EU employees is allowed on condition that the entry and residence requirements established by the Italian Immigration Law are complied with (a special procedure must be implemented for hiring non-EU employees who are not resident in Italy).

EU citizens do not need visas or work permits and must register themselves only if they establish themselves in Italy for a period longer than three months.

Non-EU citizens can be employed in Italy only if in possession of a residence permit or a visa for working purposes. The entrance into Italy of non-EU citizens is strictly governed by the law, which allows the entrance only of a certain number of individuals from each non-EU country each year, as authorised through a Ministry Decree.

Under the Italian Constitution (Article 39), trade unions activity is free and protected; individuals, therefore, are free to join a trade union, to fund a trade union and to perform trade union activities.

Trade unions have a key role in the regulation of the employment relationship, a role that is chiefly exercised through collective bargaining agreements that provide a “minimum standard” of economic and legal protection for employees that cannot be derogated from by employers.

As a consequence of the freedom to fund trade unions, in any business sector there are different trade unions (the multiplication of trade unions triggers the multiplication of collective bargaining agreements in the relevant business sector).

The effectiveness of trade unions' constitutional rights is protected through a special judicial procedure in case of employers’ anti-union behaviour (governed by Article 28 of Law 300/1970).

The existence of employee representative bodies in the workplace is a consequence of the freedom to perform trade union activities, which is granted by the Italian Constitution.

Particular rights are granted to a qualified employee representative body built in accordance with Article 19 of Law 300/1970, a so-called rappresentanza sindacale aziendale (RSA) (however, employees and trade unions are free to build representative bodies different from an RSA; in that case, the relevant body is not entitled to exercise those rights granted by law only to RSA).

Starting from 1993, the rights granted by law to the RSA have been granted also to another kind of employee representative body: the rappresentanza sindacale unitaria (RSU).

Differently from the RSA, which is a representative of one specific trade union, the RSU is an elective representative body (the number of members depends on the dimension of the employer) which represents all the trade unions that have participated in the relevant election.

The conditions required by the law for the creation of an RSA and an RSU are different, therefore, it is possible for there to be, within the same employer, RSAs that represent certain trade unions and an RSU that represents other trade unions.

RSAs and RSUs can be created only within employers that employ more than 15 employees (or 5 employees in the case of an agricultural employer).

RSA

Pursuant to Article 19 of Law 300/1970, within each employer's production unit, RSAs may be created upon the initiative of the employees by trade unions that sign a collective bargaining agreement (of whichever level: national, local or company) applied by the employer.

The Italian Constitutional Court has extended the right to create an RSA also to trade unions that have actively participated in the negotiation of the collective bargaining agreement(s) applied, irrespective of their effective signature of that agreement.

Employers who do not apply an NCBA are not obliged to recognise RSAs; however, if they recognise it on a de facto basis, the RSA is entitled to exercise all the rights granted by the law.

RSU

These may be established (within each employer's production unit) by trade unions that:

  • sign (or adhere to) the agreements on trade unions representation;
  • sign the NCBA applied in the production unit; and
  • are formally constituted and have their own by-laws that integrate all the condition for participating in the election.

The number of components is equal to:

  • three employees in units with up to 200 employees;
  • three for every 300 employees in units employing up to 3000 employees; and
  • three components for every 500 employees in the production units that employ more than 3000 employees.

The member of the RSU are appointed through an election organised within the relevant employer’s production unit.

Law 300/1970 grants certain rights only to RSAs and RSUs, these include:

  • right of assembly (Article 20);
  • right of referendum (Article 21);
  • limitation in the transfer of an RSA or RSU member (Article 22);
  • trade unions leave (Articles 23 and 24); and
  • right to publish communication on a board in the employer’s premises (Article 25).

An agreement may be qualified as collective bargaining agreement upon the condition that at least one party is a trade union (on a national, local or company level).

Collective bargaining agreements can be classified into the following levels: confederation level agreement, national level and local level (the last one also includes agreements executed at company level).

Collective bargaining agreement are generally formed by rules that can be classified as follows:

  • Industrial relations – set of rules that regulates the relationships between employers (and relevant associations) and trade unions as well as links between national, local and company collective bargaining agreements
  • Legal and economic treatments – set of rules that regulate the main aspects of the employment relationship, such as notice period, holidays, working-time, special indemnity, transfers, business trip, dismissal, disciplinary procedure and employment category.
  • Minimum wage – the minimum wage applicable for each category and subcategory/level of employees.

In some cases, collective bargaining agreements are required by law to regulate certain aspects of the employment relationship (eg apprenticeships, fixed-term agreement, part-time, working-time and notice period).

The rules set forth by the collective bargaining agreements are a “minimum standard” that can be derogated from by employers only if they grant better treatment to their employees.

Generally, NCBAs last three years; often the agreement sets out the provisions for regulating the period between the expiring date of the previous NCBA and the starting date of the new one.

Individual Dismissal

Except for certain cases (eg, domestic workers, executives and employees under a probationary period), employees under an open-ended employment agreement can be lawfully dismissed for:

  • Just cause (ie, a serious infringement of the obligations related to the performance of the job, or an external deed, such as committing a crime, that jeopardises the relationship of trust between the employer and the employee); in this case, the dismissal is effective immediately and the employee is not entitled to a notice period (fixed-term employees can be dismissed only for just cause).
  • Justified subjective reasons, consisting of a serious non-fulfilment of the employee’s contractual obligations, but not enough to result in a just cause; in this case, the employee is entitled to the notice period applicable (or the relevant indemnity in lieu of it); the difference from a just-cause dismissal is related to the seriousness of the employee’s misbehaviour(s) (ie, more serious in case of just cause).
  • Justified objective reasons (redundancy), defined by law as a reason related to the production activity, the organisation of work, and the regular functioning of the enterprise which triggers the suppression of the job position; a mandatory procedure must be implemented by the employer (if he or she employs more than 15 employees) in a case of dismissal for justified objective reasons of an employee hired before 7 March 2015 (failing to comply with the procedures renders the dismissal unlawful).

Employers must communicate the dismissal in writing and must communicate to the employee the reasons for the dismissal.

The dismissal of an executive is subject to different rules provided by the NCBA applied by the employer.

Collective Dismissal

Collective dismissals (ie, the dismissal of five or more employees during a 120-day period served by an employer that employs more than 15 employees) are governed by Law No 223/1991.

The employer must comply with a mandatory procedure that triggers, inter alia:

  • the obligation to inform and consult with trade unions and employee representative bodies for a mandatory period of time; and
  • the applicability of selection criteria set forth by the law for identifying the redundant employees (length of service, family dependents, technical reasons, etc) unless the employer has agreed different criteria with the unions/staff representatives.

Failing to comply with the mentioned procedure triggers the unlawfulness of the dismissal.

Notice Periods

A previous notice period is due by the withdrawing party in any case of termination of an employment relationship, except if termination is:

  • grounded on a just cause (of dismissal or resignation);
  • communicated during the probationary period; or
  • based on a mutual agreement.

The length of the notice period is provided by NCBAs and depends on the category/subcategory/level of the employee, the length of service and if the termination is due as a consequence of dismissal or resignation (generally in case of resignation, NCBAs provide for a shorter notice period).

If the withdrawing party terminates the relationship without giving (totally or partially) the mandatory notice period, the counterparty is entitled to receive an indemnity in lieu of notice period (the amount of which is equal to the salary that the employee would have received during the notice period).

Severance

In any case of termination, employers are obliged to pay employees the severance payment accrued by the employee during the employment relationship; the main severance payment (the trattamento di fine rapporto or TFR) is governed by Article 2120 of the ICC and the applied NCBA (the amount is roughly equal to 7.4% of the remuneration paid to the employee during the employment relationship). Employees are also entitled to receive other minor severance payments (eg, the supplementary monthly instalments accrued on a pro rata basis, or for holidays and leave accrued and not taken)

In cases of dismissal for just cause and justified subjective reasons employers must deal with a mandatory procedure governed by the law and respect the following rules:

  • the disciplinary code (or an equivalent excerpt of the NCBA applied) shall be posted in a place at the employer’s premises accessible to all employees;
  • the misconduct in question shall be raised with the employee in a prompt manner after it has come to light;
  • the employer must deliver a letter to the employee with a detailed description of the disciplinary charges (so-called warning letter);
  • the employee is entitled, within five days (or within the longer term fixed by the NCBA applied), to file his or her justifications in writing and/or to ask for a meeting with the employer (this meeting, upon the employee’s request, may also be held in the presence of the employee’s trade union representative);
  • during this five-day period (or the longer period fixed by the NCBA applied), the employer cannot impose the sanction/dismissal against the employee;
  • after the “justification” period and within the term fixed by the NCBA applied (if any), the employer may impose the dismissal by written communication;
  • the dismissal to be imposed shall be proportionate to the seriousness of the breach of the employee; and
  • the effect of the dismissal is backdated to the date of delivery of the disciplinary letter.

Failing to comply with the mentioned mandatory procedure triggers the unlawfulness of the dismissal.

Employment relationships may terminate by mutual consent, as in the case of a resignation. The employee must communicate the termination through a specific website made available by the Public Labour Office (the breach of this mandatory rule triggers the continuation of the employment relationship).

A particular procedure is set forth by the law for protecting mothers and fathers (ie, pregnant employees and parents of a child under the age of three): the mutual termination must be confirmed by the employee in front of the Labour Office (and not communicated through the website).

Generally (although it is not mandatory), a termination by mutual consent of an employment relationship is agreed in the frame of a settlement agreement executed by the employer and the employee, in which the parties reciprocally waive any claim related or connected to the execution and termination of the employment relationship.

According to Article 2113 of the ICC, settlement agreements (and the relevant waivers) executed by employees are null and void, and the relevant employee may therefore challenge the unlawfulness of the settlement agreement within six months starting from the termination of the employment relationship (in cases of execution of the settlement agreement during the employment relationship) or starting from the date of execution (in cases of execution of the settlement agreement after the termination of the employment relationship).

The above provision is not applicable if the settlement agreement is executed in front of certain subjects (eg, courts, the Labour Office, settlement committees formed in accordance with the relevant NCBA, or authorised subjects).

If the employee does not challenge the lawfulness of the settlement agreement within the mentioned period of six months or the settlement agreement is executed in front of the mentioned subject, the settlement agreement becomes binding and unchallengeable.

Italian law provides strict regulation to prevent employers’ discriminatory behaviours and to protect certain vulnerable categories of employees from possible discrimination.

In particular, the following forms of dismissal are null and void:

  • Those grounded on discriminatory/retaliatory reasons (by way of example, dismissal based on race, gender, beliefs, age, sexual orientation or disadvantaged status are considered discriminatory).
  • Those served to mothers (and father if they use maternity leave) from the starting date of the pregnancy up to the first birthday of the child; employers can dismiss these employees only (i) for just cause, (ii) in the case of a termination of the business activities to which the employee is assigned and (iii) in the case of failure of the probationary period.
  • Those served in the period from the day on which the marriage banns have been published up to one year from the celebration of the marriage; employers can dismiss the employee also during this period (i) for just cause, (ii) in the case of a termination of the business activities to which the employee is assigned.
  • Those served to disadvantaged employees if – as a result of the dismissal – the employer is not in compliance with the compulsory quota reserved to disadvantaged employees provided for by Article 3 of the Law 68/1999 (the prohibition operates with regard to collective dismissal and dismissal for justified objective reasons and does not operate with regard to dismissal for just cause and for justified subjective reasons).
  • Those communicated as a consequence of the employee’s request to benefit from parental leave or a refusal of the employer’s proposal to transform the employment relationship from part-time to full-time and vice versa.

Particular limitations are also provided by the law in case of dismissal of disadvantaged employees during their probationary periods or in case of worsening of their working capability.

The effects of a dismissal served to employees on sickness leave are postponed until the termination of the sickness, except in the case of dismissal grounded on a just cause.

In cases of unfair dismissal, employees are entitled to different forms of protection that depend on

  • the seriousness of the unlawfulness;
  • if the dismissed employee is an executive;
  • the date of hiring of the employee; and
  • the size of the withdrawing employer.

Dismissal Grounded on Discriminatory/Retaliatory Reasons

If the court ascertains the discriminatory/retaliatory nature of the dismissal, the dismissed employee is entitled to reinstatement in his or her previous position (alternatively to this reinstatement, the employee, at his or her sole discretion, may ask for the payment of an indemnity in lieu of reinstatement equal to 15 months of his or her salary).

In addition to the reinstatement, the dismissed employee is entitled to receive the payment of the outstanding salary from the date of the dismissal until the day of reinstatement (minimum five months of global salary), plus the payment of the relevant social security contributions.

This protection is granted to employees with or without executive status, irrespective of the date of hiring and the number of employees employed by the employer.

Executives

In cases of unfair dismissal, executives are entitled to the protection granted by the NCBA applied (the payment of an indemnity the amount of which depends on the company’s seniority and the executive’s age).

Employers with More Than 15 Employees

The protection granted by the law to employees depends on the hiring date.

Employees hired before 7 March 2015 are entitled to the following protection regime:

  • if the dismissal is deemed to be manifestly ungrounded by the court, the employer is condemned to reinstate the dismissed employee (or, alternatively to pay the above-mentioned indemnity in lieu of reinstatement) and to pay the outstanding salaries from the date of the dismissal until the day of reinstatement (this amount is capped to 12 months of global salary) plus the payment of outstanding social security contributions;
  • if the dismissal is deemed as “simply” ungrounded by the court, the employer is sentenced to pay the employee an indemnity ranging from 12 to 24 months of global salary plus the indemnity in lieu of notice period; and
  • if the dismissal has been served in violation of the mandatory procedure set forth by Article 7 of Law 300/1970 or Article 7 of Law 604/1966 the employer is sentenced to pay the employee an indemnity ranging from six to 12 months of global salary plus the indemnity in lieu of notice period.

Employees hired starting from 7 March 2015 are entitled to the following protection regime:

  • the sanction of the reinstatement plus the outstanding salary (capped to 12 months) and social security contributions is applicable only if the dismissal, grounded on just cause or justified subjective reasons, is considered by the court as manifestly ungrounded (on the contrary, this sanction is not applicable in case of dismissal for justified objective reasons served to this group of employees);
  • if the dismissal grounded on just cause or justified subjective reason is considered by the court “simply” ungrounded – or, in case of dismissal grounded on justified objective reasons, unlawful – the employee is entitled to receive an indemnity ranging from six up to 36 months of his or her salary plus the indemnity in lieu of notice period
  • in case of breach of the procedure set forth by Article 7 of Law 300/1970 or violation of the obligation to point out in the dismissal letter the reasons of the dismissal, the employer is sentenced to pay the employee an indemnity ranging from two to 12 months of his or her salary plus the indemnity in lieu of notice period.

Employers with 15 or Fewer Employees

Employees are entitled to receive an indemnity ranging from two and a half to six months of salary of the employee (if the employee has been hired starting from 7 March 2015 the indemnity ranges from three to six months of salary).

The indemnity is increased up to ten or 14 months of salary for employees with long (ten or 20 years) company seniority, if hired before 7 March 2015.

Pursuant to Article 15 of the Law 300/1970, employees may not be discriminated against on the basis of their race, gender, language, beliefs (political, religious, etc), age, sexual orientation or disadvantaged status.

Any action implemented by the employer in breach of the above mandatory rule is null and void and the employee is entitled to restoration for financial and non-financial damages (the burden of proof related to the discrimination and the damages suffered are both entirely on the employee).

Judicial claims related to employment relationships are subject to a special procedure and are tried in front of specialised courts or court sections.

No class action procedure is applicable in the case of employment issues; however, a proceeding could be brought by a multitude of claimants.

According to the Italian Civil Procedure Code (ICPC) the ordinary employment judicial proceeding starts when the claimant files his or her legal summons in front of the court; the defendant must file his or her defences ten days before the date of the hearing scheduled by the court (the breach of this term triggers serious consequences for the ability of the defendant to defend him or herself).

During the first hearing, the court tries to settle the dispute.

Generally, labour judicial procedures are quicker than the ordinary civil judicial procedures.

The final ruling may be challenged in front of a competent Court of Appeal (whose decision may be challenged in front of the Supreme Court).

Special procedures are applicable in case of:

  • dismissal of an employee hired before 7 March 2015;
  • claims related to social security contributions;
  • gender discrimination; and
  • employers’ anti-unions behaviour.

Parties can lawfully have recourse to arbitration only if this faculty is allowed by the law or the NCBA applied.

This form of alternative dispute resolution is very uncommon in Italy, except in the case of an employee who challenges the sanction (different from the dismissal) applied by the employer at the end of the disciplinary procedure.

According to Article 91 of ICPC, the judge, in his or her final statement can order the unsuccessful party to pay the counterparty an amount as reimbursement of legal expenses.

In the case of a settlement agreement, it is general practice that the employer reimburses the legal expenses suffered by the employee.

aldocalza – employment and labor law firm

33 Via Tortona
20144 Milan
Italy

+39 02 8962 6105

+39 02 8962 6051

aldo.calza@aldocalza.com www.aldocalza.com
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Trends and Developments


Authors



aldocalza - employment and labor law firm is based in Italy and focuses on employment, labour and agency law, both in and out of court. The firm's areas of expertise include the management of employment relationships, postings, transfers, dismissals, company transfers, corporate restructurings, industrial relations, social security law, agency contracts, health and safety at work, and due diligence. The team provides expert legal assistance closely matched to the needs of each client; facing the challenges posed by the labour market and adapting flexibly to changes without a drop in the quality of its work. The firm has developed its expertise working alongside leading multinationals in many sectors (for example, fashion, sport, banking, finance, transport and pharmaceuticals); it is precisely this wide variety of clients that has provides aldocalza with its great versatility and broad experience.

The Evolution and (Rapid) Development of Smart Working

Law No 81/2017

Law No 81/2017 introduced and regulates a new flexible form of the employment relationship aimed at promoting better work-life balance: so-called smart working.

Smart working allows employees to perform their working activities without a workplace and working-time constraints.

According to Article 18 of Law No 81/2017, working activities may be carried out partially on the company’s premises and partially in other places, at the employee’s discretion (not only at their home), possibly using electronic tools and without a permanent or physical workstation.

In this respect, the first years of the century in Italy have seen the implementation, in the private sector, of a new kind of employment relationship that allows an employee to perform his or her working activities outside the company’s premises (so-called teleworking).

However, unlike in teleworking (where the relevant regulation provides that employees must perform their activities at a specific workstation placed in a workplace previously agreed on with the employer and controlled by the employer for health and safety purposes), in the case of smart working, employees are entitled to choose their workplace according to personal needs.

Currently, the two different types of employment relationship are still entered into by the parties; however, smart working is becoming increasingly common, while the performance of working activities through teleworking regime is becoming rarer.

Before an employee starts working in a smart-working regime, his or her employer is required to enter into an agreement with him or her that must be executed in written form for administrative compliance purposes and in order to be given in evidence. 

Smart-working agreements

Pursuant to Article 19 of Law 81/2017, the agreement governs the carrying out of activities outside the company’s premises, how its hierarchical powers will be exercised by the employer and how the tools will be used by the employee, as well as how the employees will exercise their right to rest and to log out from electronic tools.

The smart-working agreement must be communicated and filed to the competent Office of the Labour Ministry through a special website. In particular, employers are bound to disclose the following information: employer, employee’s name and surname, information related to the employment relationship and smart-working agreement.

The infringement of the above-mentioned obligation of communication is sanctioned with an administrative fine ranging from EUR100–500 for each employee involved.

Usually, employers implement a smart-working policy that governs, by way of example:

  • the maximum number of days on which employees are allowed to smart work;
  • how the employee must communicate his or her intention to access to the smart-working regime on a particular date (and possible relevant authorisations from the employer);
  • technical requirements of the place selected by the employee for carrying out his or her working activities (health and safety and privacy requirements, Wi-Fi and phone connection, etc);
  • electronic tools assigned;
  • management of the expenses connected to smart working;
  • working time and overtime;
  • log-out procedures;
  • how to manage possible technical problems and damage to the tools;
  • health and safety measures; and
  • how the employer can control the employee’s working activities.

The mentioned policy can be attached to the individual smart-working agreement and becomes part of it (however the same items can be negotiated on an individual basis, in the absence of a company policy).

Open-ended or fixed-term smart agreements can be executed by employers and the relevant employees.

In case of open-ended contracts, parties may agree the notice period for communicating the withdrawal; the notice period cannot be less than 30 days or, in case of disadvantaged employees, 90 days.

Regardless of the above, parties are always entitled to terminate the smart-working agreement early, without a prior notice period, for justified cause.

Terms and conditions of the smart-working relationship

Smart workers are employees, and are therefore subject to the same provisions set forth by the law and by collective bargaining agreement(s) applied by employers to their other employees.

Therefore, access to the smart-working regime cannot trigger the application of worse economic and legal treatment compared to that applied by the employer to employees who perform the same tasks and duties on the company’s premises (except for the items indicated by the law), nor of any discrimination (of whatsoever nature).

Smart workers are entitled to the same mandatory insurance for injury and work-related illness set forth in the case of working activities performed outside the company’s premises and to the same protection against injuries occurring during (normal) travel between the home and the place chosen for carrying out the working activities

However, certain specific terms and conditions of employment are provided for smart workers by the law (and by the collective bargaining agreement applied by the employer). Several of these are set out below.

Working place

During the smart-working day, smart workers are free to decide the place in which carrying out their tasks and duties within the limitations agreed in the smart-working agreement. On other days, smart workers must perform their activities in the company’s premises (upon the conditions normally applied by the employer to its employees with or without smart-worker status).

Working time

Smart workers carry out their working activities without working-time constrains (eg, shifts, starting times and finishing times); however, the parties may govern the smart worker’s working time in the smart-working agreement (also with regard to rests and breaks).

Irrespective of the above, smart workers are, in any case, subject to maximum daily working times and weekly working duration limits.

Log out right

Employers are obliged to grant the smart workers’ log out right to ensure the health and safety of the smart worker. Regardless of the fact that the law does not sanction violations of this mandatory rule, possible breaches of the smart workers’ log out rights risk mandating the employer to restore any damage (monetary and otherwise) suffered by the smart worker in the case of a judicial claim.

Remuneration

Smart workers are entitled to receive the same economic treatment granted to employees who perform the same tasks and duties on the company’s premises. However, during the smart-working regime, employers are not obliged to grant employees with the special indemnity, granted by the law and collective bargaining agreement(s), connected to the working activities on the company’s premises (disadvantaged workplace allowances, etc). Also, with regard to remuneration, parties are free to agree special provisions in the smart-working agreement.

Disciplinary rules

Smart workers can be subject to particular disciplinary rules connected to the fulfilment of their tasks and duties in a smart-working regime. These rules, as well as the employer’s control over them (that, in any case, must be performed in accordance with the mandatory laws), can be regulated in the smart-working agreement. In this respect, according to Article 4 of Law 300/1970, control over tools assigned to employees for carrying out their working activities (eg, emails, pc or phone) are lawful only to the extent that the employer is in compliance with the provisions set forth by the applicable data protection laws and has informed employees of the condition of usage of the tools and how that control is exercised by the employer over the tools. If the mentioned conditions are not met, the employer cannot use the data unlawfully acquired.

Health and safety

Employers are bound to ensure the health and safety of their smart workers and to this purpose they must provide smart workers and the employees’ safety representative (rappresentante dei lavoratori per la sicurezza or RLS) with written information relating to the risks linked to the smart-working regime applied (information must be provided at least once per year). Article 22 of the Law 81/2017 expressly requires smart workers to co-operate with the employer in facing the risks to their health and safety.

Training

Pursuant to Article 20 of Law 81/2017, smart workers can be involved in permanent training programmes and may be subjected to periodic certification of their knowledge.

The mentioned special treatment is applicable only when employees work in a smart-working regime; on the contrary when smart workers perform their working activities in the company’s premises they are subject to the normal legal and economic treatment applied to employees with no smart-worker status.

Smart working and COVID-19

During the COVID-19 pandemic, smart working has been considered essential by the Italian government for limiting social contact and slowing the spread of the virus.

On a preliminary basis, it should be remarked that smart working in the age of COVID-19 is quite different from the smart working governed by Law 81/2017.

Unlike “ordinary” smart workers, COVID-19 smart workers were obliged to perform their working activities in compliance with the movement restrictions imposed by the Italian government; therefore, COVID-19 smart workers were not free to perform their activities in places selected at their will (COVID-19 smart workers have actually been homeworkers).

With the intention of allowing general, easier and quicker access to the smart-working regime, the Italian government simplified (through several decrees) the procedure for allowing employees to perform their activities in smart-working regimes for the length of the national emergency. This simplified procedure, connected to the pandemic, will remain in place, according to the current rules, until 15 October 2020; after that date the ordinary rules will once again apply.

In particular, no prior individual smart-working agreement is needed for allowing employees to work in a smart-working regime.

In addition, during the emergency, employers have been obliged to communicate only the smart workers’ name and the start date of the smart-working regime, through telematic tools and by using the standard format provided by the Labour Ministry.

Finally, the mandatory communications related to health and safety risks for smart workers can be served by employers through email (also using the standard form made available by the Italian National Insurance Institute – INAIL).

During the emergency, parents of children under 14 who are employed in the private sector are entitled to access to smart-working regimes.

This right is not granted if the other parent has been involved in a wage integration fund or is unemployed.

The same right is granted by the law to vulnerable employees (as a consequence of age, an immunosuppressed status, illness, etc) as certified by competent doctors.

The mentioned right of carrying out working activities in a smart-working regime is subject to the circumstance that the tasks and duties assigned to the employee can be performed through such a regime.

aldocalza – employment and labor law firm

33 Via Tortona
20144 Milan
Italy

+39 02 8962 6105

+39 02 8962 6051

aldo.calza@aldocalza.com www.aldocalza.com
Author Business Card

Law and Practice

Authors



aldocalza - employment and labor law firm is based in Italy and focuses on employment, labour and agency law, both in and out of court. The firm's areas of expertise include the management of employment relationships, postings, transfers, dismissals, company transfers, corporate restructurings, industrial relations, social security law, agency contracts, health and safety at work, and due diligence. The team provides expert legal assistance closely matched to the needs of each client; facing the challenges posed by the labour market and adapting flexibly to changes without a drop in the quality of its work. The firm has developed its expertise working alongside leading multinationals in many sectors (for example, fashion, sport, banking, finance, transport and pharmaceuticals); it is precisely this wide variety of clients that has provided aldocalza with its great versatility and broad experience.

Trends and Development

Authors



aldocalza - employment and labor law firm is based in Italy and focuses on employment, labour and agency law, both in and out of court. The firm's areas of expertise include the management of employment relationships, postings, transfers, dismissals, company transfers, corporate restructurings, industrial relations, social security law, agency contracts, health and safety at work, and due diligence. The team provides expert legal assistance closely matched to the needs of each client; facing the challenges posed by the labour market and adapting flexibly to changes without a drop in the quality of its work. The firm has developed its expertise working alongside leading multinationals in many sectors (for example, fashion, sport, banking, finance, transport and pharmaceuticals); it is precisely this wide variety of clients that has provides aldocalza with its great versatility and broad experience.

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