Budget Law for 2022
A new mandatory information and consultation procedure has been introduced in the event of shutdown of business activity in Italy, further to that already provided by Law 223/1991 for collective dismissals (Article 1, paragraphs 224–238, Law No 234/2021 or the "Budget Law").
The new procedure involves employers who:
The procedure is not applicable to employers who are in crisis or insolvent and could enter into the settlement procedure (so-called procedura di composizione negoziata) governed by the Legislative Decree 14/2019 as a result.
At least 90 days before starting a collective dismissal procedure pursuant to Article 4 of Law No 223/1991, employers have a duty to give written notice of the intention to proceed with the closure to:
The communication must contain:
Draft of the action plan
Within 60 days of the employer’s communication, the company must write down a plan aimed at limiting the economical and occupational effects triggered by the closure and submit it to the relevant trade unions and public authorities.
The duration of the plan cannot exceed 12 months and must include:
Examination of the action plan
The plan shall be discussed with the relevant trade unions and public authorities within 30 days of its submission. Prior to the end of the plan examination and its possible execution, the employer cannot start the collective dismissal procedure, or serve individual dismissal for justified objective reasons.
Outcomes of the procedure
i) Reaching a union agreement
The discussion with the parties involved may end with a union agreement. In this case, the employer will have a duty to:
If, at the end of the plan, the employer still needs to register redundancies, they could start the collective dismissal procedure governed by the Law 223/1991 without paying the so-called “dismissal ticket” (ie, the mandatory payment due by employers in case of dismissal).
Furthermore, the employees affected by the plan may benefit from:
ii) Failure to reach a union agreement
The procedure could also conclude without reaching an agreement between the employer and the trade unions.
In this case, the employer can start a collective dismissal procedure pursuant to Article 4 of Law No 223/1991 90 days from the starting date of the procedure at stake (ie, the date trade unions and public authorities receive the communication that starts the procedure).
The collective dismissal procedure will:
Sanctions for lack or breach of procedure
Individual dismissals for objective reasons and collective dismissals served without the full 90-day notice period (or before this period expires) are null and void.
The employer is obliged to pay a “dismissal ticket” of an amount equal to three times the ordinary value provided for collective dismissals (ie, a maximum of EUR10,042.56 for each employee dismissed) if:
The Transparency Decree for 2022
On 29 July 2022 the government published Legislative Decree No 104/2022 (the "Transparency Decree"), which transposes on Italy the EU Directive 2019/1152 on Transparent and Predictable Working Conditions. The main rules provided by the Transparency Decree are analysed in 2.2. Contractual Relationship, which looks at how they affect the terms and conditions that must be inserted in employment agreements with employees.
The Transparency Decree also provides the following rules.
The probationary period shall have a maximum duration period of six months, unless a lower period is provided by the National Collective Bargaining Agreement (NCBA). Any sickness, injury and maternity (or paternity) leave that occurs during the probationary period shall delay termination of the probationary period for the equivalent duration of the leave.
Employers cannot ban employees from working for other employers outside their working time, except if:
the parallel employment is carried out in breach of a compulsory non-competition covenant that binds all the employees during the employment relationship; or
the additional working activity could expose the employee to possible health and safety risks safety (eg, it is carried out in breach of the mandatory rest periods required by law).
Minimum predictability of work
Where work patterns are entirely or mostly unpredictable, the employee shall not be required to work by the employer unless both of the following conditions are fulfilled:
If these conditions are not met, the employee is entitled to refuse to perform their working activity without any consequence to their right to receive his/her salary.
Transition to another form of employment
Employees with at least six months’ seniority may request a form of employment with more predictable and secure working conditions where available and receive a reasoned written reply. If the employer refuses, with a written explanation, the employee cannot formalise a new request for the next six months.
Where an employer has a duty to provide training to an employee to carry out their tasks and duties, the relevant training shall count as working time.
Under Italian law (Article 2095 of the Italian Civil Code or ICC), there are four categories of employees.
Distinction between Blue-Collar and White-Collar Work
The collective bargaining agreement applied by the employer (if any) provides for subcategories/levels of employment (generally with regard to blue- and white-collar work).
This distinction, however, is not as important as it once was. Currently, most NCBAs introduce a unified system of classification for blue- and white-collar workers. Nonetheless, certain differences are still in place with regard to the legal and economic treatment granted to each category, such as
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 in certain cases specified by the law (eg, maritime employment agreements).
However, Italian law provides that certain covenants (eg, probationary period covenants and non-competition covenants) must be agreed in writing before the hiring. If the parties do not respect the mandatory format then the relevant covenant is null and void.
Moreover, employers are required to communicate certain information in written form to the employee at the time of hiring or within seven days of the hiring.
This mandatory fulfilment has recently been amended through the Transparency Decree, which becomes enforceable on 13 August 2022.
According to this new legislation, employers have a duty to communicate the following information to the employee in writing:
*This information should be communicated within one month of hiring.
The employer must retain proof that they fulfilled this duty for five years following the termination of the employment relationship.
The above-mentioned mandatory information must be communicated to employees already employed by the company prior to 1 August 2022 within 60 days of an employee’s request.
Terms and conditions of the employment relationship
From a legal and economic standpoint, the main terms and conditions of the employment relationship generally tend to be set forth in 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 and Legislative Decree 23/2015).
Fixed-term employment agreements must be agreed in writing before or at the time of hiring. A copy of the signed agreement must be delivered to the employee within five days of 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 (up to 24 months) only if it meets one of the following needs:
This last requirement may only be used by the employer until September 30, 2022.
Fixed-term agreements can be extended freely during the first 12 months 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).
Employers are prevented from hiring employees under a fixed-term agreement in certain circumstances, including:
The entire relationship between the same employer and the same employee cannot exceed 24 months for the execution of the tasks and duties in 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 collective bargaining agreements.
Maximum number of fixed-term employees
The number of fixed-term employees cannot exceed 20% of the number of open-ended employees in force on 1 January of the relevant year (derogations are provided by the law and 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.
Fixed-term employees with at least six months' seniority in a company have a priority right if, following termination of the relationship, the employer hires open-ended (and, in certain cases, fixed-term) employees for the same tasks and duties.
The violation of the mandatory rules triggers the conversion (by a court) of the fixed-term contract into an open-ended contract. Employers will also be compelled to pay a lump sum, worth between two and 12 months of the employee’s salary.
An employee’s working time is subject to regulations set forth by the collective bargaining agreement 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 violation of the listed rules could trigger the application of administrative or criminal sanctions.
Exceptions to the listed rules are provided by the law for certain individuals (eg, executives and middle managers).
Parties may agree three types of part-time employment agreements:
Part-timers may be hired under an open-ended employment, agreement as well as a fixed-term employment agreement.
Part-time contracts must be executed in writing so as to be evidenced.
In the agreement, the parties must indicate the calendar of the part-timer’s working activities.
The parties may agree on a so-called elastic covenant, according to which the employer could require the part-timer to perform their tasks and duties:
The terms and conditions of the so-called elastic covenant are set forth in 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 their outstanding salary. This mandatory rule is also applicable to employers who do not apply any NCBA. In such case, they are obliged to grant their employees the minimum wage provided by the NCBA of their business sector.
The minimum wage varies from NCBA to NCBA and depends on the category and subcategory/level of the employee. Generally, NCBAs provide for an increase in salary that depends on the employee's length of service. NCBAs state 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). An absorbable superminimum can absorb (totally or partially) any possible increase in the minimum wage granted by the NCBA.
In addition to the minimum wage, NCBAs provide special indemnity for specific tasks performed by the employee and also indemnify the employee from uncomfortable working conditions (including the working time).
On top of their 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).
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 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.
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 that is 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.
Fathers are entitled to paid leave of ten days (continuous or otherwise), which must be taken in a period beginning two months before the birth and ending five months after the birth. This increases to 20 days in cases of multiple 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 abandonment of the child by the mother).
Adoptive parents are entitled to the same rights granted to birth parents.
Employees are entitled to a period (continuous or otherwise) of parental leave during the first 12 years of the child’s life, equal to nine months (not exceeding six months for each parent and increased to eleven months in case of single-parent family).
The parents cannot benefit from a total period of parental leave longer than ten months for each child (exceptions are provided by the law).
Employees are entitled to receive payment of an indemnity from the INPS equal to 30% of their salary for the days of leave taken within the first 12 years of the child's life.
Other particular leaves are granted by the law and NCBAs to employees with or without parental status, including for:
Leaves/breaks connected to disadvantaged status
Italian law grants leave and breaks both to disadvantaged employees and employees who have the custody of disadvantaged individual(s). The conditions, limits and durations of such leave are provided by the law (eg, Legislative Decree 151/2001 and Law 104/1992).
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 their job for a period of time set forth by the NCBAs (guaranteed sick leave).
Only after this period has elapsed may the employer can terminate the relationship.
The existence of the sickness status must be certified by a doctor in the Italian health system; employers can check the existence and 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 cases set forth by the law (eg, where they are executives, middle managers and white-collar workers in the manufacturing sector). NCBAs could include different provisions (usually an addition to the indemnity that grants the employee a total indemnity equal to their normal salary).
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). They can be bound to non-disparagement and confidentiality obligations (that also apply to information other than the “confidential” matters defined by the above) only if agreed with the employer at the time of 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:
It is 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 prevent the former employee 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 writing within 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 texecuting the employment relationship. 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, among others).
Employers (the data controller) must provide employees with the following information:
Employers are obliged to provide the following additional information:
Consent and the Fulfilment of Rules
The privacy laws outline the cases in which 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 their responsibility.
The fulfilment of the mandatory rules on privacy allows the employer to control the tools used by the employee for carrying out their tasks and duties (eg, emails, computer and phone). However, the employer must inform its employees about the conditions of usage of the tool and how the power of control is exercised by the employer over the tools. If these 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, whereas non-EU citizens are subject to immigration procedures.
Mandatory provisions and procedures are provided by the law in cases of secondment of employees to Italy by an EU employer.
The hiring of non-EU employees is allowed on the condition that entry and residence requirements established in 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 they possess a residence permit or a visa for working purposes. The entrance into Italy of non-EU citizens is strictly governed by the law. A ministry decree only permits a certain number of individuals from each non-EU country to enter Italy each year.
Under the Italian Constitution (Article 39), trade union 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. This role 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, there are various trade unions in any one business sector. 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 the case of employers’ anti-union behaviour (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 formed in accordance with Article 19 of Law 300/1970 – that is, a so-called rappresentanza sindacale unitaria (RSA). Employees and trade unions are free to form representative bodies that differ from RSAs; however, in such case, the relevant body is not entitled to exercise those rights granted by law only to RSAs.
Starting from 1993, the rights granted by law to RSAs have also been granted to another kind of employee representative body: the rappresentanza sindacale unitaria (RSU).
Unlike the RSA, which is a representative of one specific trade union, the RSU is a representative body whose members are elected to represent all the trade unions that have participated in the relevant election. The number of members depends on the size of the employer.
The conditions required by the law for the creation of an RSA and an RSU are different. Therefore, it is possible to have an RSA that represent certain trade unions and an RSU that represents other trade unions within the same employer.
RSAs and RSUs can only be created within employers that employ more than 15 employees (or five employees in the case of an agricultural employer).
Pursuant to Article 19 of Law 300/1970, RSAs may be created within each employer's production unit 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 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 the RSA on a de facto basis, it is then entitled to exercise all the rights granted by the law.
These may be established (within each employer's production unit) by trade unions that:
The number of components is equal to:
The members 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, including:
An agreement may be qualified as a 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 at the following levels:
Collective bargaining agreements are generally formed by rules that can be grouped into the following categories.
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 arrangements, 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.
Except for certain cases (eg, domestic workers, executives and employees under a probationary period), under an open-ended employment agreement employees can be lawfully dismissed on the following grounds.
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, which are provided in the NCBA applied by the employer.
Collective dismissals (ie, the dismissal of five or more employees during a 120-day period 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:
Failing to comply with the mentioned procedure triggers the unlawfulness of the dismissal.
A previous notice period is due by the withdrawing party in any case of termination of an employment relationship, except where the termination is:
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 whether the termination is due as a consequence of dismissal or resignation. In cases of resignation, NCBAs generally 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 said notice period. The amount of the indemnity shall be equal to the salary that the employee would have received during the notice period.
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 (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.
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). In such cases, the mutual termination must be confirmed by the employee in front of the Labour Office (and not communicated through the website).
Although it is not mandatory, a termination by mutual consent of an employment relationship is generally agreed within the frame of a settlement agreement executed by the employer and the employee. In such agreement, both 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:
The above-mentioned provision does not apply if the settlement agreement is executed in front of certain subjects, including:
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 regulations 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.
Particular limitations are also provided by the law in cases where disadvantaged employees are dismissed during their probationary periods or as a result of the worsening of their working capability.
Dismissals served to employees who are on sickness leave are postponed until the period of sickness is over, unless the dismissal is grounded on a just cause.
In cases of unfair dismissal, employees are entitled to different forms of protection that depend on:
Dismissal Grounded on Discriminatory/Retaliatory Reasons
If the court ascertains the discriminatory/retaliatory nature of the dismissal, the dismissed employee is entitled to be reinstated in their previous position. Alternatively, the employee (at their sole discretion) may ask for an indemnity equal to 15 months of their salary to be paid in lieu of reinstatement.
In addition to the reinstatement, the dismissed employee is entitled to receive payment of the outstanding salary from the date of the dismissal until the day of reinstatement (minimum five months' worth 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.
In cases of unfair dismissal, executives are entitled to the protection granted by the NCBA applied ‒ ie, payment of an indemnity the amount of which depends on the executive’s age and company seniority).
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.
Employees hired after 7 March 2015 are entitled to the following protection regime.
Employers with 15 or Fewer Employees
Employees are entitled to receive an indemnity ranging from two-and-a-half to six months' salary. If the employee has been hired after 7 March 2015, the indemnity ranges from three to six months of salary.
The indemnity is increased to ten or 14 months' salary for employees with long company seniority (between 10 and 20 years) if they were 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-mentioned mandatory rule is null and void. As such, the employee is entitled to restoration for financial and non-financial damages. However, 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 their legal summons in front of the court. The defendant must file their defences ten days before the date of the hearing scheduled by the court. A breach of this term triggers serious consequences for the ability of the defendant to defend themselves.
During the first hearing, the court tries to settle the dispute.
Generally, labour judicial procedures are quicker than 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 cases of:
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, in their final statement the judge may order the unsuccessful party to pay the counterparty an amount as reimbursement for legal expenses.
In the case of a settlement agreement, it is common practice for the employer to reimburse the legal expenses suffered by the employee.
Gender Discrimination in the Workplace
The right to equality is one of the Italian legal system’s fundamental principles, and is enshrined in Article 3 of the Italian Constitution (“the Constitution”). It can be broadly encapsulated as the right to receive equal treatment and not be discriminated against.
Equality and non-discrimination must be enforced in all social environments, including the workplace.
To this purpose, Article 15 of Law 300/1970 (the so-called Statuto dei Lavoratori) expressly establishes the voidness of any action or agreement aimed at subjecting an employee's recruitment, working activity or economic conditions to characteristics such as:
Discrimination in the workplace can operate both directly and indirectly, in the following ways.
As a consequence of the recent legislation trend on this subject and – more specifically – gender equality, it is worth focusing on the protection provided by Italian law against gender discrimination and how this regime leads to specific obligations for employers and affirmative actions aimed at reducing the gender gap in the workplace.
Bans on gender discrimination in the workplace are reinforced by the first paragraph in Article 37 of the Constitution, according to which "a female employee is entitled to the same rights and, for equal duties, the same wages as the male employee". This is specifically protected by the provisions contained in Legislative Decree No 198/2006 (the so-called Equal Opportunity Code).
As a result, the employer must comply with the gender equality principle and the consequent ban of all discriminations – whether direct or indirect – during the employment relationship, including:
Recently Law 162/2021 amended Article 25 of Legislative Decree No 198/2006 by making some major clarifications regarding gender discrimination. As a result, Article 25 now espressly addresses:
According to the Italian Labour Court, the following actions/measures should be considered direct gender discrimination, inter alia:
Examples of indirect discrimination were found in case law – eg, excluding maternity leave from the eligible period in bonus calculation.
The Equal Opportunity Code has set up two bodies specifically to deal with equal opportunity promotion and protection:
Harassment at work
Article 26 of Legislative Decree No 198/2006 confirms that the following behaviours should be considered discrimination:
Pursuant to Article 2087 of the Italian Civil Code, employers are required to implement measures that prevent sexual harassment in the workplace. Agreements may be reached with unions on the most appropriate initiatives.
Important changes in this respect have been introduced by Law 4/2021, which ratifies the International Labour Organization (ILO)’s Violence and Harassment Convention (“the Convention”) of 2019.
The protection is now expressly extended to employees and workers in general, regardless of contractual or employment status. It protects from all harassments that occur:
Protection from discrimination in the workplace
Individual judicial procedure
Articles 36 and 38 of the Equal Opportunity Code provide a special judicial procedure against discrimination in the workplace.
Discriminated-against employees can represent themselves – or be represented by their union or equality councillor – before the labour court in order to sue the perpetrator of discriminatory behaviour. Through an immediately enforceable decree, the perpetrator can be forced to:
Failure to comply with this decree will result in a criminal sanction against the perpetrator of discrimination in the form of fines up to EUR50,000 or imprisonment for up to six months.
The so-called inversion of the burden of proof applies in this process. The victim may merely allege the discriminatory behaviour through presumptions, whereas the defendant must prove that the discriminatory behaviour is not ascribable to them.
As a consequence of the claim, the employee who takes legal action to ascertain discrimination for harassment or sexual harassment must not be:
The dismissal of the whistle-blower or any other retaliatory measures taken against the latter are null and void.
If the regional and/or national equality councillor is informed of discriminatory behaviour on a collective basis before a judicial claim is commenced, the relevant councillor may order the perpetrator to prepare a plan for removing the ascertained discrimination within 120 days. This applies even when the employees affected by the collective discrimination are not immediately and directly identifiable.
Alternatively, once it has been discussed with the union and the councillor, the order to adopt such a plan may be imposed through a court’s decision following a judicial claim.
Failure to comply with the court order will result in a fine of up to EUR50,000 or imprisonment for up to six months. An additional fine of EUR51 must be paid for each day the execution of the court order is delayed.
Discrimination at work shall be punished with a fine ranging from EUR5,000 to EUR10,000.
If the perpetrator of discrimination has been granted benefits by public authorities or is entered into public contracts, the public authorities shall be informed of the breaches of anti-discrimination rules and must take the most appropriate measures, such as:
Gender status reporting duty
According to Article 46 of Legislative Decree 198/2006 (the provisions of which were recently amended and extended by Law 162/2021), employers who employ more than 50 employees are required to draft a report on the male and female occupation situation in the company.
Companies that do not have this occupational requirement can still draw up the report on a voluntary basis.
The report must contain the following information.
The report must be submitted every two years:
Regional equality councillors have access to the reports submitted by companies with registered offices in their assigned territory, in order to process the relevant results and communicate them to:
Employees could request a copy of the report from the competent regional or provincial equality councillors and from company union representatives in case of a judicial claim related to possible discrimination suffered at the workplace.
If the company fails to transmit the report, the interregional labour inspectorate instructs the company to provide it within 60 days. Further failure to do so is sanctioned with a fine ranging from EUR103 to EUR516.
If the company still has not complied after 12 months, the labour authorities can sanction the misconduct through the suspension of any contribution benefits enjoyed by the company for a year.
If the report is incomplete or false, a fine ranging from EUR1,000 to EUR5,000 shall apply.
Affirmative actions plan
Equal opportunities mean also promoting the adoption of the so-called “affirmative actions” that, pursuant to Article 42 of Legislative Decree No 198/2006, are specifically aimed at promoting women’s employment and removing obstacles that prevent gender equality in practice.
The affirmative actions may be promoted by:
In particular, the Labour Ministry publishes a call for funding the “affirmative action plans” drawn up by employers after the Committee issues guidelines on equal opportunities promotion in February each year. The plans drafted by employers in agreement with unions have priority access to the benefit.
The employers must begin to implement the plans within two months of receiving authorisation from the Labour Ministry in order to obtain total or partial reimbursement of the financial expenses necessary to implement the plan.
Failure to implement the plan means any benefits will be lost and any sums already received will be refunded.
Gender equality certification
Law 162/2021, which amends the Legislative Decree No 198/2006, has established the gender equality certification system. This certification has been issued from 1 January 2022 to all companies that can demonstrate they have implemented gender equality policies and measures in order to reduce gaps on growth opportunities, wage equality, equal opportunities in governance, maternity protection, etc.
The Decree of the Ministry of Equal Opportunity (dated 29 April 2022 and published on 1 July 2022) set out the standards for achieving gender equality certification by companies for the reference of company union representatives and territorial and regional equality councillors.
The above-mentioned decree refers to the criteria provided by the Guidelines on the Management System for Gender Equality (the Practices 125/2022, adopted by the Italian Standards Organisation (UNI) on 16 March 2022). These guidelines identified specific key performance indicators (KPIs), which measure the implementation status of gender policies within a company or organisation.
KPIs pertain to the following six areas.
Each area is assigned with a percentage weight expressing the achievement of the relevant KPIs.
The KPIs are applied proportionately based on the company’s size. Exemptions and simplifications are provided for companies that employ fewer than 50 employees.
The certification is issued when the company achieves a minimum overall score of 60% and is valid for three years – although it must be monitored each year.
The employer must provide a gender equality report on their compliance with the above-mentioned practices to equality councillors and company union representatives every year.
If irregularities or critical issues are detected from the data generated by this report and the biennial gender status report, company union representatives and equality councillors can report them to the organisation issuing the certification once the company has been given a maximum of 120 days for removal.
The gender equality certification grants the following benefits: