START OF THE EMPLOYMENT RELATIONSHIP 

Who can work in Italy?

Article 3 of the L. 977/1967 states that anyone who is at least 15 years old can work, but it is necessary that the youth has finished his mandatory education period. In any case it is forbidden for a minor to work at night time – this includes the following time slots: from 10 P.M. to 6 A.M. or from 11 P.M. to 7 A.M. (according to Article 15, L. 977/67).

Which are the main types of labour contracts that exist in Italy?

The Italian Legislator identifies the so-called “standard contracts” (“contratti tipici”). These are standard since their discipline is contained in the Civil Code (also called “C.C.”). The main standard contract in labour law consists of the permanent - under employer - working agreement (“contratto di lavoro subordinato a tempo indeterminato”). The main feature of this type of contract is that the employee is under the employer’s managerial power and reports directly to the employer, in exchange for a determined salary. The salary can be also determined by piecework (“lavoro a cottimo”), which is a type of wage system whereby salary is determined by productivity, i.e. by worker performance.

The Legislator also identifies another type of standard contract, from Article 2222 - and following - of the C.C., called the self-employed working agreement (“contratto di lavoro autonomo”).

On the opposite side of the standard contracts, there are the so-called “atypical contracts” or “non-standard contracts” (“contratti atipici”). These are non-standard since they are not regulated by the Civil Code. In fact these contracts are often regulated by Legislative Decrees and/or by specific Statutes. This category includes many contracts, such as fixed-term working agreement (“contratto di lavoro a tempo determinato”), part-time working agreement (“contratto di lavoro part time”), job on call (“contratto di lavoro intermittente o a chiamata”), staff leasing agreement (“contratto di lavoro somministrato”) and apprenticeships (“apprendistato”).

Finally, there is another type of contract which is worth mentioning, namely the quasi-subordinate working agreement (“contratto di lavoro parasubordinato”), also called continuous and coordinated collabouration (“collabourazione coordinata e continuativa”). In this case, the worker commits himself to carry out a mainly personal performance in a continuous way in favour of the employer/customer.

The employee works in coordination with the employer/customer, but he is not subordinated to him.

What are the main features of each of them?

Standard Contracts

The permanent - under employer - working agreement

The Legislator describes this type of contract under Article 2904 C.C. This agreement is characterised by the fact that the worker is an employee under the direction of the employer and to whom he reports. The employee obtains a salary from the employer for his work. Furthermore, the contract has no expiration date.

It is important to highlight the fact that the employee is subordinated to the employer. In order to verify the existence of subordination it is necessary to refer to some parameters as follows:

• the intention of subordination - expressed by the parties when they enter into the agreement – this has to be real and actual;

• the subordination and the distinction between employee and employer must be effective during the entirety of the contract; and

• other parameters identified by the Courts.

The employee takes on an obligation of duties, not an obligation of results. He commits himself to make his labour available in favour of the employer and for determined hours during the week.

Self-employed working agreement

This kind of contract finds its discipline in Article 2222, and following, of the C.C. and refers to workers in the field of craftsmanship, commerce, agriculture and professional activities. According to Article 2222 C.C., a self-employed working agreement exists “when a person commits himself to accomplish a work or a service upon payment, working mainly on his own and free from any bonds of subordination from the customer/buyer”.

The difference with under employer workers lies in the fact that self-employees accept an obligation of results. Self-employed workers guarantee to the customer the achievement of the goals specified in the contract within a deadline.

In this case there is not any sign of subordination to the customer. Self-employed workers use mainly their own tools and equipment in order to satisfy the customer.

Atypical Contracts

Fixed-term working agreement

This kind of contract is regulated by the general rules provided for the permanent - under employer - working agreement, with the exception of its duration. In fact, the dissolution of the contract can occur with the expiry of an agreed time limit or with the satisfaction of a condition.

Part-time working agreement

This kind of contract consists in an under employer working relationship and is characterised by the fact that the parties agree upon a reduced work schedule compared to the one set by the Legislator, or the one provided by collective work agreements (normally the work schedule consists in 8 working hours). Part-time work is regulated by specific legislation (Articles 4-12 D.lgs. 81/2015) and, as far as compatible, by the under employer working’s legislation.

Furthermore, it is important to highlight that there are no rules which forbid an employee from having more than one part-time job.

Job on call contract

With this contract a worker offers his labour to carry out specified work subject to the “call” from the employer. The employer has to respect procedures and all the limits provided by the specific regulation (Articles 13-18 D.lgs. 81/2015). There are two types of job on call contracts. The first is characterised by the contractual obligation of the employee to answer to the employer’s call, with the right of compensation for the periods of mandatory availability. On the other hand, the second type does not include that obligation and the employment relationship is limited to single calls (no available time windows).

This kind of contract is different from the part-time working agreement since here the employee benefits from rights normally acknowledged to employees only when he is actually employed.

Staff leasing agreement

In this case the work-force is hired by an employment service company (“società somministratrice di lavoro”).The company has a role between the employer and the employee, whose employment relationship can be permanent or temporary. In this kind of contract there are three individuals:

• the employment service company, formal employer of the worker;

• the worker, formally hired by the employment service company but available to the employer/customer in order to perform his work;

• the user company (employer/customer) which exercises its management and control over the worker’s performance.

The regulation of this employment relationship can be found in Articles 30 to 40 of the D.lgs. 81/2015.

Apprenticeship

This consists of a fixed-term working agreement aimed at the training and the occupation of the apprentice and is regulated by Articles 41 to 47 of the D.lgs. 81/2015. The employer, in view of a work-performance characterised by an increasing traineeship, commits himself not only to pay the salary to the apprentice, but also to give to him the necessary training in order to obtain an educational qualification, specific skills to perform a certain job and work experience which is functional to the achievement of an academic qualification or high work formation.

Generally, workers can be hired under an apprenticeship contract if they are aged 15 to 29 years. Age limits depend on the type of apprenticeship.

Quasi-subordinate working agreement

There are no specific legal indications for this type of employment relationship. Therefore the relationship between the customer and the independent contractor can be freely determined by the parties. In any event, the independent contractor has a duty of secrecy and non-competition, according to the general principles of decency and good faith (Articles 1175, 1375 and 2596, Civil Code). The payment for the independent contractor’s services is agreed by the parties, generally prorated depending on the quantity, quality and time related to the actually accomplished activity. In addition to the remuneration, the quasi-subordinate worker can also benefit from some benefits (i.e. business car, mobile phone, accommodation, etc...) or company’s securities (i.e. shares, stock options), similar to regular employees.

The establishment of the relationship must be notified to the competent Public Employment Services (“Servizi per l’impiego”).Independent contractors must be registered at the L.U.L. (“Libro Unico del Lavoro”), which is a book held by the employer where he registers all his employees and independent contractors.

What information should be given to employees in Italy?

Within 30 days from the hiring, according to Article 1 of the D.lgs. 152/97, the employer must provide to the employee with the following information:

• the parties’ identity;

• the workplace;

• the start date;

• the duration, specifying whether the employment relationship is permanent or temporary;

• the duration of the training period if provided; and

• the qualifications, the level, the position and the tasks conferred to the employee or a brief description of the job.

If there is no reference to the collective labour agreement, the contract will also have to specify:

• the starting salary with an explanation of its constitutive parts, with the further explanation of the payment period;

• the vacation days granted to the employee or an explanation of the formula to calculate them and how they can be enjoyed by the employee;

• the working schedule; and

• the notice period in case of termination. 

DURING THE EMPLOYMENT RELATIONSHIP 

What are the main employment rights in Italy?

The main employment rights, that cannot be derogated, are set out in the Constitution, the main ones of which are:

• the right to a proportionate salary according the quantity and the quality of work. In any event, the salary has to be sufficient to ensure a free and fair life to employees and their families (Article 36.1 of the Constitution and L.741/1959);

• every employee has the right to a fixed day off per week and the right to annual vacation days. The employee cannot refuse these rights (Article 36.3 of the Constitution and Article 2109 C.C.);

• the right to job equality – women have the same rights compared to men (Article 37 of the Constitution);

• the right to alternative suitable means which must be provided and guaranteed to all the employees in case of injury, disease, invalidity and old age (Article 38 of the Constitution and Article 2109 C.C.);

• the right to go on strike (Article 40 of the Constitution and Articles 15 to 18 of the L. 300/1970).

Furthermore, employees have the general right to non-discriminatory treatment based on several characteristics such as age, sexual orientation, disability, religion, ethnicity, race, political leaning, union membership, social status, language, physical features, height, weight, health condition or beliefs.

What are the maximum permitted daily, weekly, monthly and annual working hours?

It is possible to obtain a daily maximum permitted hours by subtracting from 24 hours daily time 11 hours which is recognised as the essential rest time for employees. In this way the resulting maximum working hours per day is 13, but this is not a mandatory regulation.

The normal weekly working schedule is set at 40 hours (8 hours for 5 days). The collective labour agreements set the maximum weekly duration of the working schedule, but it cannot exceed 48 hours in any case. The employee has the right to a day off every 7 working days (exceptions are stated in Article 9 of the D.lgs. 66/2003).

There is no legislation for a maximum amount of working hours per month.

Is there a minimum of working hours required?

There is no regulation regarding any minimum of working hours required, but it is possible to refer to the rule that identifies the normal weekly working schedule in 40 hours (8 hours per day).

What is the minimum holiday entitlement?

Article 10 of the D.lgs. 66/2003 entitles the employee to have at least 4 weeks of vacation per year, but there is not a specific rule that states anything about the exact amount of vacation hours.

Can a contract be modified while still valid and in force? If so, under which circumstances?

Since the employment relationship consists of an uninterrupted performing contract, durable in time, its content can change frequently because of new normative and new occurrences.

In fact, the employment contract can be modified by law or by collective labour agreements. In this case the contract will change automatically but only if the new provision is more favourable than the older one.

The contract can be also modified by the parties but the modification is related to the importance of the provision that the parties want to change. Indeed, in several areas the law prohibits the inclusion in the contract of different terms to the ones originally contained in it. In other areas, the law subordinates the judgement on the legality of the modification of the contract to a previous agreement between the parties, such as an agreement reached contextually at the signing of the employment contract.

Furthermore, other changes can be unilaterally made by the employer according to his authority to manage and monitor, not being fundamental aspects of the contract.

The contract can also be modified by settlement or under the employee’s concessions, for example in relation to salary, tasks, working schedule and workplace.

Furthermore, two other circumstances can also affect an employment agreement, namely an assignment of the working contract can occur which changes one of the parties (from one employer to another) that reached the initial agreement and a transfer of a business, which again affects the legal status of the employer.

Are there any particular employment relationships subject to special protections?

Generally, the employer is free to hire whoever he prefers. However, in some cases the employer is obliged to hire a fixed percentage of employees who belong to certain categories, such as disabled individuals, relatives of people who died while working, relatives of terrorism victims, relatives of organised crime victims and repatriated Italian refugees.

There is a specific provision regarding disabled individuals – employers with more than 15 employees must hire a number of disabled employees, depending on the number of able-bodied employees. If the employer hires an able-bodied individual over the limit, he has the obligation to hire one more disabled employee within 12 months.

Other special protections are provided in the cases of pregnancy, maternity and paternity. According to the D.lgs. 151/2001, it is prohibited to assign duties to pregnant women in the time period between 2 months before the birth and 3 months after (Article 16). In case of heavy work, the woman’s discharge is set at 3 months before the birth (Article 17). During this period, female employees have the right to a daily allowance in the amount of the 80% of their salary.

As regards male employees, they have the right to be absent from work for the whole time granted to the female employees where the mother has died or is seriously ill, in cases of child abandonment or when the child is under the exclusive custody of the father.

Once the period comes to an end, employees have the right to resume their job, unless they expressly renounce.

Are there any obligations to consult with a company trade union and/or to undertake collective bargaining?

In Italy there is no specific obligation to consult with a company trade union.

In Italian companies, there can be two alternative systems of union representation as follows:

• RSA (“Rappresentanze sindacali aziendali”), which can be translated as Company Union Representative. The RSA is composed by all workers having signed up for a specific Union (i.e. CIGL, CISL, UIL). The RSA can be organised in industrial or commercial companies with more than 15 employees in every branch, factory, office.

• RSU (“Rappresentanze sindacali unitarie”), which can be translated as single Union Representative at the company level. The RSA is composed by all workers of the company regardless of their enrolment to a specific Union.  The RSU can be organised in every production unit with more than 15 employees.

The two systems are alternative - if a trade union decides not to participate in elections for the foundation of a RSU, it still keeps the right to found its own RSA. Conversely, trade unions which decide to participate in elections for the foundation of a RSU must formally renounce the right to a RSA.

In addition to the RSA and RSU, there can be other kinds of trade union representation in Italy, such as:

• company representatives (“delegati d’impresa”): a certain number of employees who work in the same stage of the productive process;

• works council (“consigli di fabbrica”): they are identified with the RSA;

• single council of delegated workers (“consiglio unitario dei delegati”): this is an equivalent of the works council in companies with more production units.

As regards the collective bargaining agreement, there is no general obligation to undertake it but an employer who adheres to a specific trade union representation must apply the collective labour agreement that his trade union representation has signed. In this case, the collective agreement is applied to every employee.

If the employer does not adhere to any trade union representation, he will be able to choose between two alternatives:

• voluntary application: an employer can choose to apply a certain collective agreement by adhering explicitly (indicating the agreement’s details in the individual employment contract) or by adhering implicitly (when the employer applies spontaneously and constantly a certain collective agreement);

• lack of adhesion: in any event the employer must respect some guarantees, such as the right to a proportionate salary which must not be lower than the one set  by the collective agreement and the right, in case of transfer of business, to the economic treatment established by the collective agreement. 

 

END OF THE EMPLOYMENT RELATIONSHIP

When and how can an employer terminate an employment relationship?

Dismissal or layoff is the means for an employer to unilaterally terminate an employment relationship. Generally a layoff must be supported by a cause related to the employee’s behaviour or related to his production results, in other cases the dismissal occurs because of working organisation (justified dismissal and collective termination).

In some cases, i.e. when the employee reaches the age for retirement or at the end of the trial period, the employer can terminate an employment relationship without any cause.

By way of further details for disciplinary terminations, the layoff depends on the employee’s behaviour. Such behaviour must reach the level of a breach of the fiduciary duty with the employer. The employer may dismiss the employee for two reasons:

• dismissal for good cause (“licenziamento per giusta causa”): the behaviour entails a breach so serious that is not possible to continue the employment relationship and the termination is immediate. The breach can be caused both by contractual and non-contractual behaviour;

• dismissal for subjective good reason (“licenziamento per giustificato motivo soggettivo”): the behaviour is not so serious to determine an immediate termination of the employment relationship but it is related to a breach of the fiduciary bond underlined by contract.

The procedure before the dismissal requires in the first place for the employer to affix the disciplinary code in a visible place. After the violation, the employer has to charge the employee immediately and specifically with a written communication. Then the employee has 5 days to reply in writing or orally. Once it has received the employee’s reply, the employer can decide whether to terminate the employment relationship or not. The termination must be in writing, specifying the causes.

The warning notice is determined by the collective bargaining agreement and can be implemented by the individual contracts. The warning notice is established by collective agreement and it depends on placement and seniority.

Individual termination for objective good reason is also possible – in this case, the dismissal is related to production and work organisation. The employer has a repêchage obligation which consists of an attempt to assign the employee an equivalent task in the company structure. The burden of proof rests on the employer, who has to prove the objective just reason.

The term ‘wrongful termination’ (“licenziamento illegittimo”) is used to describes a situation in which an employee's contract of employment has been terminated by the employer and the termination breaches one or more terms of the contract of employment, or a statutory provision of employment law

Collective termination occurs when the employees’ overflow is structural and irreversible and the employer needs to terminate the employment relationships of an excess number of employees. This kind of termination can only take place in companies with more than 15 employees that plan to terminate at least five employment relationships. Italian law identifies two causes that can determine the recourse to collective termination, namely the reduction or the modification of the working activities and the termination of activity.

The collective termination procedure applies when an employer intends to terminate at least five employment relationship in a 120 day period. The terminations have to take place in the same production unit or in more production units located in the same province. In this case, the burden of proof rests on the employer, who has to prove a meaningful link between terminations and causes.

The reduction-in-force procedure consists of two phases, namely a trade union one and an administrative one when the employer and trade unions try to find an alternative to the terminations.

When and how can an employee terminate an employment relationship?

An employee can freely rescind the employment contract. He can resign without any particular motives (unless the collective agreement provides differently) or obligations, except for the fact that he must give notice to his employer. The employer’s acceptance is not necessary. The notice is not required in cases of good reason resignation, working mothers and working fathers and free termination.

The duration of the notice period is established by the collective agreement that applies to the particular case. The notice period starts from the moment when the resignation is communicated to the employer.

From 12 March 2016, the effectiveness of resignation is subordinated to the respect of a telematics procedure in order to guarantee the employee’s identity and his will to terminate the employment relationship. Since then, it is no longer possible to resign without formalities or by conduct (“facta concludentia”).

The employee’s resignation can also be presented by other individuals, such as trade unions and authorities for certifications.

Within 7 days from the dispatch of the form, the employee can withdraw his resignation.

Within 5 days from the dissolution of the employment relationship, the employer must communicate the end of the relationship to the Public employment services (“Servizi per l’impiego”).

What are the economic consequences in each case?

Every employee, when he is dismissed, retires or resigns, has the right to receive the Accrued Redundancy Pay (T.F.R., “Trattamento di fine rapporto”). The T.F.R. consists of the sum of annual funds. These annual funds are part of the salary that derive from a non-casual employment relationship and they are periodically re-evaluated. Reimbursements for expenses are excluded. Collective agreements can explicitly state what should be included in the T.F.R. calculation. In any event, the employee can ask the employer to give him his T.F.R. with the salary.

After 8 years of employment at the same company, the employee can ask (only once) the employer for an anticipation, not superior than the 70%, of the T.F.R. he had accrued until the time of the request. This anticipation can be given for:

• the actual need for money in order to purchase a “first house” for him or for his offspring;

• the actual need for money to pay health care expenses; or

• need while absent for parental leave or training.

The right to ask for T.F.R. gets prescribed in 5 years within the end of the employment relationship.

The T.F.R. can be sold to a third party.

It is important to highlight another possible consequence of the end of an employment relationship. When one of the parties, either the employer or the employee, does not respect the notice period, it has to pay an amount of money in lieu of notice (“indennità sostitutiva”). In the following cases, the employer must give to the employee this sum in lieu:

• employee’s death;

• resignation for good reason;

• working mother or father’s leaving;

• leaving related to wedding;

• termination without notice by the employer which is declared unfair or converted into termination with notice by the judge; or

• dissolution of the employment agreement due to bankruptcy or special administration.

It is also worth mentioning the economic consequences in cases of wrongful dismissal. Starting from March 7, 2015 the judicial system has provided two different set of rules, depending on when the employee was hired.

However, the regulation does not introduce any innovation for the protection of workers in case of discriminatory dismissal, illegal dismissal, oral dismissal or unjust dismissal due to an employee’s disability. In these cases, all employees have the right to be reinstated regardless of the company’s dimensions. As an alternative, the employee can choose a payment in lieu of reinstatement (“indennità sostitutiva della reintegrazione”) consisting of fifteen months’ pay. In both these cases, the employee has the further right to a compensation for damages (“indennità risarcitoria”) consisting of at least five months’ pay.

Protections against wrongful dismissal for good reason or subjective good reason

Employees hired before 7 March 2015:

• Companies with 15 employees or less: compensation between 2,5 and 6 months’ salary or reinstatement (employer’s choice);

• Companies with more than 15 employees: if the contested fact is unfounded, compensation up to 12 months’ salary and reinstatement; otherwise compensation only between 12 and 24 months’ salary.

Employees hired after 7 March 2015:

• Companies with 15 employees or less: compensation, in the amount of 1 months’ pay for every year of service, between 2 and 6 months’ salary;

• Companies with more than 15 employees: if the contested fact is unfounded, compensation up to 12 months’ salary and reinstatement; otherwise compensation only in the amount of 2 months’ pay for every year of service, between 4 and 24 months’ salary.

Protections against wrongful dismissal for objective good reason

Employees hired before 7 March 2015:

• Companies with 15 employees or less: compensation between 2,5 and 6 months’ salary or reinstatement (employer’s choice);

• Companies with more than 15 employees: in case of manifest non-existence of the fact, compensation up to 12 months’ salary and reinstatement; otherwise compensation only between 12 and 24 months’ salary.

Employees hired after 7 March 2015:

• Companies with15 employees or less: compensation in the amount of one month’s pay for every year of service, between 2 and 6 months’ salary;

• Companies with more than 15 employees: compensation in the amount of 2 months’ pay for every year of service, between 4 and 24 months’ salary.

Protections against wrongful dismissals due to defect of form or procedure

Employees hired before 7 March 2015:

• Companies with 15 employees or less: compensation between 2,5 and 6 months’ salary or reinstatement (employer’s choice);

• Companies with more than 15 employees: depending on the seriousness of the employer’s violation, compensation between 6 and 12 months’ salary.

Employees hired after 7 March 2015:

• Companies with 15  employees or less: compensation in the amount of 0,5 month’s pay for every year of service, between  1 and 6 month’s salary;

• Companies with more than 15 employees: compensation in the amount of 1 month’s pay for every year of service, between 2 and 12 months’ salary.

Are there any situations in which an employment relationship would terminate automatically without any action by either party? If so, what are they?

There are some situations in which an employment relationship terminates automatically as follows

• good reason termination;

• through expiration date of a fixed-term contract;

• supervened impossibility:

• force majeure;

• employee’s death;

• missed re-integration after reinstatement;

• during the training period, parties are free to rescind the agreement without motivation and without notice.

The employment relationship can also terminate automatically in case of consensual dissolution when the parties agree to relieve themselves from the duty of notice.