Astolfo Di Amato Avvocati Associati | Jenny Avvocati | Portolano Cavallo

1

GENERAL PRINCIPLES

Forums For Adjudicating Employment Disputes

Labour Tribunals (or, under certain conditions, arbitration boards) have jurisdiction for adjudicating employment disputes.


The Main Sources Of Employment Law

Several legal sources apply to employment relationships: international treaties, EC law; the Italian Constitution; national (or, for certain aspects, regional or provincial) laws; regulations issued by the relevant authorities (such as the Labour Ministry, tax or social security authorities); national, local or company labour agreements; employment agreements.


National Law And Employees Working For Foreign Companies

As a general rule, Italian labour law should apply to all employees working for foreign companies in Italy.

Non-national employees, temporarily seconded from non-national employers to Italy, are entitled to the same terms and conditions of employment as national employees.


National Law And Employees Of National Companies Working In Another Jurisdiction

General international law principles apply to employees of national companies working in another jurisdiction.

Whichever law governs the employment relationship, there are certain compulsory Italian rules which will always apply and which parties cannot opt out of.


Data privacy

Regulation (EU) 679/2016 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation (GDPR)) was adopted in May 2016 and applied directly in all EU member states without the need for transposition from 25 May 2018. The GDPR applies to the processing of personal data wholly or partly by automated means, or other than by automated means, if the data form part, or is intended to form part, of a filing system (Article 2(1)). The GDPR defines personal data as "any information relating to a data subject" (Article 4(1)). The Italian Data Protection Authority ( Garante per la protezione dei dati personali) (IDPA) has issued several resolutions on data protection that have an impact on processing employees' personal data. The Data Protection Code (i.e., Legislative Decree No. 196/2003), as implemented and specified over the years by the IDPA, as well as GDPR, set out the rules governing the processing of personal data. Typically, the parties to an employment agreement have the following roles:

  • The employer is the data controller (that is, the person that determines the purposes and the modalities of the data processing).

The employee usually acts as an "authorised" person that has been duly instructed by the Companies must help their employees comply with the data protection regulation by means of training plans aimed at increasing awareness in individuals when dealing with personal data.

Where personal data is to be exported for processing outside the EEA, the export must comply with both EU and national data protection legislation.

2

HIRING THE EMPLOYEE

Legal Requirements As To The Form Of Agreement

As a general rule, employment contracts do not necessarily need to be in writing.

Only specific clauses in employment contracts (namely probation clauses and post-employment non-competition covenants) or peculiar employment contracts (eg fixed-term, part-time, and apprenticeship employment contracts) are required to be in writing.


Mandatory Requirements
  • Trial Period

    • As a general rule, employees may be employed under probation, if (i) the probation period clause is entered into in writing, before, or upon commencement of the employment; (ii) the concerned employee is duly informed of the assigned duties, on which he is “tried”.

    National collective agreements specify the maximum duration of any probation period, shall not exceed six months.

  • Hours Of Work

    • The ordinary weekly working time of a full-time employee is 40 hours per week. Collective agreements may provide for a lower number of hours and may calculate ordinary working time as an average for a period which may not exceed one year.

    Full-time and “vertical” part-time employees may be required to work overtime, if the applicable collective agreement provides for it. The employer and the employee may agree to overtime, within certain maximum limits and/or due to a peculiar situation.

    Employees working overtime are generally entitled to be paid for overtime and/or to paid leave. Please note that general provisions on working time and overtime do not apply to specific kinds of employees, e.g., all employees having managerial duties.

  • Earnings

    • All employees should receive an adequate and sufficient remuneration, which according to case law, should not be lower than the minimum wage set by the national collective agreement of the relevant sector or industry.

    The annual base salary is paid in 13 monthly instalments (the 13th one in December of any relevant year. Some national collective agreements provide for a 14-monthly instalment of annual salary, generally to be paid in July.

  • Holidays/Rest Periods

    • Under Italian law, employees are entitled to statutory daily rest breaks as well as daily and monthly rest periods.

    Employees are also entitled to 4 weeks of annual leave; 2 weeks of this leave should be enjoyed in the same year in which such days-off become due. The remaining 2 weeks can be carried over but must be taken in the following 18 months. The employer shall pay the employee in lieu of untaken holiday upon termination of the employment, no such payment being allowed during their employment.

  • Minimum/Maximum Age

    • As a general rule, employees must be 16 years or older, provided that they have duly complied with rules relating to attending school.

    Recent law provisions allow, under certain conditions, for young apprentices to work, instead of attending school, during their last year of school.

  • Illness/Disability

    • Employees on sick leave are entitled to continue their employment and receive sick pay (under certain circumstances, covered by the relevant social security authorities), until a certain “grace period”, set by the collective agreement, expires.

    According to the main trend of case law, employees suffering an illness due to a breach by the employer of health and safety duties, may not be dismissed upon the expiration of “grace period”.

    Employees who, during their employment, become unable to carry out their duties, should be assigned to different vacant positions compatible with their disability.

  • Location Of Work/Mobility

    • As a general rule, employees may be unilaterally transferred from one business unit to another one, because of reasonable technical, organizational or production needs. Further restrictions set by law or collective agreements may apply to certain categories of employees (unions representatives, employees having a certain age and/or seniority, employees assisting relatives with disabilities).

    Such mandatory limits do not apply to business trips and to temporary assignments to new workplaces which may be freely decided by the employer.

  • Pension Plans

    • The relevant public pension fund grants retirement pensions to all retired employees having reached a certain age and/or a certain number of years of payment of social security contributions.

    Integrative pension plans have acquired an increasing importance in the last few years. Most employees join the pension plan governed by industry collective national labour agreements and are financed (in whole or in part) with TFR accruals (see below).

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

    • Legislative Decree 151/2001 grants women workers special protections during pregnancy and after birth, until the child is one. Such workers are entitled (and obliged) to take paid leave two months before birth until the expiry of the third month following birth.

    Pregnant workers may commence their maternity leave one month before birth. In this situation, the employee shall remain on leave until the expiry of the fourth month following birth.

    Female workers are entitled to enjoy additional leave of up to a maximum of 6 months (10 months, if they are the only parent) in the first eight years of the child’s life (“so-called “parental leave”). When the mother returns to work following maternity or parental leave she is entitled to return to the same job or to another job of the same level.

    Once the employee has returned to work she is entitled to two-hours daily rest during the first year of the child’s life and to take leave if her child falls ill up to the age of 8 (for children aged between 3 and 8, however, such leave shall not exceed 5 days per year).

    During pregnancy, and before the child is one-year-old, female workers may be dismissed only in exceptional cases. During the same period, female workers are entitled to resign without any notice and to be paid indemnity in lieu.

    In certain cases, male workers are entitled to paternity leave, parental leave and daily rests. Generally speaking, male employees have the same rights as the ones granted to female workers. Male employees enjoying paternity and/or parental leave, or daily rests also enjoy the same protection from dismissal and resignation as female employees.

    Pursuant to section 26 of the Legislative Decree 151/2001, in the case of adoption of a minor, the adoptive mother (or father) is entitled to 5 months maternity (or paternity) leave.

    In the case of pre-adoption assignment (so-called “affidamento”) of a minor, leave of up to three months may be taken in the five months following such affidamento.

    The same parental leave granted by law to “natural” parents also applies in cases of adoption or affidamento of a minor.

  • Compulsory Terms

    • As mentioned above, employment contracts do not necessarily need to be in writing. In principle, the mere performance of work under the direction and control of a subject is sufficient to establish an employment relationship, because all its main terms and conditions are provided for by the applicable laws and collective agreements. There are, therefore, no terms and conditions that should necessarily be agreed upon (even remuneration, in the absence of any agreement, might be set by the relevant Labour Court). However:

    • terms and conditions of employment should not be less favourable than the ones set by law or the applicable collective agreement and;
    • in the 30 days following the commencement of employment, each employee should be informed in writing of the main terms and conditions of his employment. Some of the above information may be provided de relato, i.e. by making a generic reference to the applicable collective agreements.
  • Non-Compulsory Terms

    • Parties to an employment agreement are free to agree non-compulsory terms such as those providing for a probation period, part-time hours of work, variable remuneration, postemployment non-compete covenants.

    Such (non-compulsory) clauses, where agreed upon by the parties, should however be compliant with the applicable laws and regulations (e.g. limiting the maximum duration of probation period, setting for conditions of validity of non-compete covenants).


Types Of Agreement

Besides the “normal” (full-time or part-time) open term employment agreements, Italian law allows employers to execute several kinds of “flexible” employment agreements, such as fixed-term employment agreements, apprenticeship agreements, “job-on-call” agreements.

These “flexible” employment agreements may only be entered into provided that (strict) substantial and formal requirements are satisfied. Failure to satisfy these requirements will generally mean that such agreements will be deemed as a normal open-term employment contract.


Secrecy/Confidentiality

Under Italian law, employees may not disclose confidential information about the business and the methods of production. There are also criminal offences for those who fail to safeguard professional business secrets.


Ownership of Inventions/Other Intellectual Property (IP) Rights

Employees specifically employed to carry out inventive activities, are not entitled to any specific compensation (other than their monthly salary) for the inventions they make.

Employees working on industrial inventions in the context of their employment, without being employed nor remunerated to invent, may be entitled to an “equitable compensation” (providing that the same are registered).

In both cases, inventions belong to the concerned employers, but the concerned employees should be acknowledged as the inventors.

Employers whose employees make an invention outside the context of their employment, but in the employer’s business area, only have an option to use or buy the invention.

Similar provisions apply to “opere dell’ingegno” (creative works, such as articles, books and software).

EU citizens are entitled to freely work in Italy as employees or self-employed, with the only obligation to provide information and documentation about their employment to the relevant municipality authorities.

As a general rule, non-EU citizens may come to work in Italy only if provided with a “work permit.”, The relevant authority will only issue a “work permit” if:

  • the concerned non-EU citizen is offered employment and accommodation by an Italian employer;
  • the maximum number of new non-EU citizens allowed to come to work in Italy, as set by the Italian Authorities on an annual basis, is not already reached (such limits do not apply to some categories of foreign workers, e.g., executives or highly specialized personnel); and
  • there is no reason of public order to refuse the work permit.

Hiring Specified Categories Of Individuals

Depending upon the number of employees, public and private employers are required to hire a minimum number of disabled personnel:

  • 1 disabled employee, if the employer employs between 15 and 35 employees (only in the case of new hiring);
  • 2 disabled employees, if the employer employs between 36 and 50 employees; and
  • 7% of the total number of all employees, if the employer employs more than 50 employees.

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Under Italian law where there is a work or service contract, the principal is jointly liable with the contractor (and any sub-contractor).

For remuneration, social security charges and withholding tax due to the contractor’s (or sub-contractor’s) employees assigned to the performance of the contract, within two years from the termination of the contract.

For those damages, suffered by the contractor’s (or sub-contractor’s) employees assigned to the performance of the contract, that were not indemnified by State insurance against industrial accidents and occupational diseases. This liability of the principal applies in the case of the assignment to contractors of works within the principal’s premises, or within a business unit of the principal’s business, or within the principal’s production cycle.

3

MAINTAINING THE EMPLOYEE RELATIONSHIP

Changes To The Contract

The employer may assign the concerned employee to different duties, provided that this does not entail a demotion. The assignment to a lower level of employment or to a lower legal category (workers, employees, executives, managers) entails a demotion.

Any demotion is unlawful, except (a) when demotion is due to a change in the corporate organization that affect the position of the concerned worker and so it is the only alternative to a possible redundancy (b) when provided for by collective bargaining (c) in the case of individual agreements to change the duties, the legal category, the level of employment and the related remuneration, provided that the change has one of the following purposes: safeguard the employee's workplace; acquire a different professionalism; improve his/her living conditions.


Change In Ownership Of The Business

Where there is a transfer of a business (or part thereof), the following rights and protections apply:

  • the employees pertaining to the transferred business or part of business have the right to continue their employment with the transferee. The employees retain all the rights from their previous employment agreement;
  • the transferee shall comply with all economic and legal benefits granted by national, local, and company collective agreements entered into by the transferor from the date of the transfer until their expiry, unless the transferee already follows other collective agreements of the same level;
  • the transferor is jointly liable with the transferee, for all credits that the transferred employees had at the time of the transfer, unless the employee releases the transferor from the obligation under the original employment relationship through a specific procedure;
  • the transfer of a business does not qualify per se as a legitimate ground for the employee’s dismissal.

Whenever the concerned transferor employs more than 15 employees - irrespective of the number of employees transferred - the transferor and the transferee should initially inform and consult the union representatives of the envisaged transfer, following a procedure that should start at least 25 days before the transfer.


Social Security Contributions

Employers are obliged to pay social security contributions (financing retirement pensions, as well as maternity, disability and some unemployment treatments) to the relevant public pension fund.

The ordinary social security contribution is equal to 33.00% of the gross salary or remuneration, of which 23.81% is paid by the employer and 9.19% is paid by the worker.


Accidents At Work

Employers shall pay insurance premiums to a public fund covering damages to Employee’s health and (temporary or permanent) disability which arise from accidents at work or industrial diseases.


Discipline And Grievance

Before taking any disciplinary measures (with the only exceptions being oral reprimands), the employer should carry out a prior statutory procedure, which gives the employee the right to submit written or oral defence. Italian law also requires the employer to display a disciplinary code in a place accessible to all employees.


Harassment/Discrimination/Equal pay

The Italian Constitution and several laws and regulations prohibit any kind of direct or indirect discrimination before, during and upon termination of the employment (including molestation and sexual harassment, which are deemed as gender-based discriminatory acts).

Discriminatory acts are null and void and, under certain conditions, may entail regulatory or even criminal law penalties for the employer.


Compulsory Training Obligations

Employers have to provide health and safety training to employees for the purpose of avoiding or limiting the risk of accidents at work.

Apprentices are also entitled to attend training courses to obtain certain skills or qualifications.


Offsetting Earnings

An employer may offset debts due from an employee against the employee’s salary.

Under certain conditions, employees’ credits (to salary, allowances, indemnities and perquisites) may be assigned to, or distrained by, third creditors.


Payments For Maternity And Disability Leave

Maternity and disability leave is generally covered by the relevant social security authorities, although contributed to by employers.

National collective agreements may require employers to integrate such pays, so as to allow the concerned employees to receive full salary during their leave.


Compulsory Insurance

Besides compulsory insurance against accidents at work and industrial diseases (see above), national collective agreements may require employers to execute insurance policies in favour of executives or other specific categories of employees.


Absence For Military Or Public Service Duties

Under certain conditions, employees carrying out military or specified public service duties may have the right to suspend their employment and not be dismissed during such duties or to enjoy some leave.


Works Councils or Trade Unions

Employees are free to organize a trade union and to carry out union activities.

Italian law grants specific rights and protections to certain unions that achieve a certain level of “representation” in a company. To get such recognition the union must actively participate in the negotiation of a collective agreement which is applied by the company.

Special role and entitlements are granted to the “most representative” unions at national level.

There are several smaller trade unions with each one representing all employees (excluding executives, represented by their own unions) working in the same industry.

The most important collective agreements are executed at national level by industry unions and the corresponding employers’ associations. The CCNLs provisions may be incorporated and, under certain conditions, amended by local, company and/or business unit agreements.


Employees’ Right To Strike

The right to strike is set out in the Italian Constitutional Chart. In specific areas of “essential public services” (e.g. public transports, hospitals), where a strike not only impacts the employer’s business but the whole community, unions calling a strike shall comply with a regulatory procedure and ensure that a minimum number of services are constantly available to the public.

Pursuant to section 28 of the Italian law no. 300 of 1970, unions suffering an undue limitation of their freedom, activity or right to strike (and, in general terms, an infringement of their rights) may file a lawsuit against the employer responsible for such undue conduct and obtain an injunction which, orders the employer to cease such conduct.


Employees On Strike

The right to strike may be freely exercised by all employees, provided that it does not cause damage to the employer’s “productivity” (i.e. the employer’s machinery, devices etc.).

Employers are not allowed to take measures to contradict the exercise of such constitutional rights. In particular employers may not take disciplinary measures against employees on strike nor are they allowed to employ new staff (directly, or through a labour agency) to minimize the effects of the strike on the normal running of the business.


Employers’ Responsibility For Actions Of Their Employees

There is a civil liability imposed on all employers for all and any damage that their employees may have caused to third parties during their work.

Under certain conditions, crimes committed by employees in the interest of their employers may expose the employers to the same criminal law sanctions as the employee.

4

FIRING THE EMPLOYEE

Procedures For Terminating the Agreement

Italian labour law states, in general, that an open-ended employment relationship can be terminated for objective or subjective reasons, or for just cause. Moreover, dismissal must be given in writing and must detail the reason on which it is based.

In particular, justified objective reason according to article 3 of Law n. 604/1966 consist in reason related to work organisation or regular functioning of undertaking.

In relation to the date of recruitment of the employee and the size of the company (in a labour perspective), different procedures are envisaged.

    1. for employees hired before 7 March 2015 by large employers (i.e. employers with more than 15 employees in each headquarters, establishment, branch, office or autonomous department or 60 employees nationwide), Article 7 of Law 604/1966 applies to dismissals on objective justified reasons.
      2. In case of dismissal for justified objective reason employer must carry out a mandatory pre-emptive consultation phase. In particular, the employer is bounded to inform the Local Labour Office and the employee of its intention to terminate the employment. He also must details the reason on which the dismissal is founded and the possible measures to reallocate the employee. The Local Labour Office summons both parties within 7 days of receipt of the communication. If no out-of-court agreement is reached, the employer may dismiss the employee.
    2. for employees hired before 7 March 2015 by small employers, the procedure described above does not apply. The notice of dismissal must contain the organisational or production reasons for the dismissal which will be effective from the date of receipt of such notice.
    3. Employees hired after March 7 2015 falls under Legislative Decree n. 23/2015 (so called “employment contract with growing protections”). This means that the procedure provided by article 7 of Law 604/1966 does not apply and the dismissal for justified objective reason must be given in writing and must detail the reason on which it is based.

Dismissal for disciplinary reason may consist in justified subjective reason or just cause. “Just cause” includes serious cases of breach of contract and misconduct, but also other issues which, despite being outside employment relationship, can impact on the employment relationship since they mine trust or expectation of performance, thus cancelling the employer’s interest in collaborating with the employee anymore. In this case, the notice period is therefore excluded and must not be provided to the employee.

“Justified subjective reason” is a notable failure in performing contractual duties (this is the case of a relevant failure). In case of dismissal justified subjective reason, notice period is due.

In both types of dismissal for disciplinary reasons the employer has the duty to implement prior to the dismissal the procedure provided by Law 300/1970 regarding the application of disciplinary sanctions.

The employer must previously communicate to the employee the charge (by describing the facts and circumstances potentially grounding the charge), then allowing the employee to justify himself within a few days (5 days or in a different deadline provided for by the relevant national collective bargaining agreement). Then, the dismissal can be given after the employee has provided justification (should the Company not accept these justifications).


Instant Dismissal

The only immediate dismissal is for just cause (article 2119 Italian civil code) which, as mentioned above, consists in serious cases of breach of contract and misconduct. In this case, the dismissal is effective immediately (i.e. from receipt of the letter of reprimand) and no notice period is due to the employee.


Employee's Resignation

The employee may resign by online procedure as provided for in Article 26 of Legislative Decree 151/2015.

The employee may resign by giving the notice period provided for in national collective bargaining agreement.

The resignation may also be for just cause with immediate effect in case of an employer's breach of contract which is so serious that breaks the employment relationship. Some examples of resignation for just cause identified by Italian case law are the following:

  • failure to pay wages for two months
  • failure to pay social security contributions;
  • injurious behaviour of the hierarchical supervisor;
  • mobbing;
  • sexual harassment in the workplace.

Employees under a fixed term employment may resign before the expiring date only for just cause.


Termination On Notice

Notice period is due in case of dismissal for objective or subjective reasons or in case of voluntary resignation and it can be served or replaced by compensation.

Notice period is established by the national collective bargaining agreement applied and depends on the employee's grading and length of service.


Termination By Reason Of The Employee's Age

Generally, reaching pension requirements does not automatically entail termination of employment, unless the employee has met the requirements for an old age pension.

An employee who has not reached old age pension requirements may continue to be employed and retain the protection provided for unlawful dismissal.


Automatic Termination In Cases Of Force Majeure

The supervening impossibility of the service, as case of termination of the employment relationship, occurs in cases in which the relationship cannot continue due to events not attributable to either party: natural events or measures of authority that are not attributable to the actions or omissions of the parties.

Hypotheses of supervening impossibility relating to the employee are imprisonment or the loss of entitlements enabling him to carry out his duties (e.g. withdrawal of a driving licence or firearms licence). In these events, the employer may dismiss the employee.


Collective Dismissals

Mass dismissal are ruled by Law 223/1991 applicable when a company with more than 15 employee intends to lay off more than 5 employees within a period of 120 days.

According to Law 223/1991 company is required to communicate its plans to the relevant trade union and to the Local Labour Office. The notification must be given in writing and must contain information required by law.

The RSU and the trade unions can request a joint review to discuss with the company the reasons for redundancy and possible alternative measures.

If the parties do not reach an agreement, the Local Labour Office convenes the parties to try to reach an agreement.

After completion of these two phases (maximum 75 days) the company may proceed with the mass dismissal.


Termination By Parties’ Agreement

The employment relationship may be terminated by agreement between the parties (mutual termination).


Directors Or Other Senior Officers

Dismissal of top managers must be justified, as set out by national collective bargaining agreement for top manager. In case of unlawful dismissal, the top manager is entitled to receive "supplementary compensation" established by the collective agreement in relation to the length of service.

Only in case of invalid dismissal, art 18 par. 1 of Law no. 300/1970 applies to the top manager as well.


Special Rules For Categories Of Employee

Free dismissal (so-called ad nutum dismissal) is an exceptional form of dismissal which not impose to the employers to provide written reasons.

Employees who can be dismissed ad nutum are:

  • employees hired on a probationary period (before the employment becomes definitive);
  • Domestic employees;
  • Professional athletes;
  • Employees who have reached old age pension.

Whistleblower Laws

Law no. 179 of 2017 ruled on the whistleblower phenomenon, introducing protections for the employee who reports wrongdoing in the private sector and supplementing the contents of the so-called "231 models". Among other provisions, the aforementioned law provides the nullity of "retaliatory" sanctions against the whistleblower, including retaliatory or discriminatory dismissal.


Specific Rules For Companies in Financial Difficulties

There are several laws concerning the employment relationship of companies in financial difficulties.

For example, the redundancy fund, which can be applied under certain requirements by companies in financial difficulty, suspends the employment relationship and ensures the employee's salary.


Special Rules For Garden Leave

The garden leave period is a period in which the employment relationship is suspended (the employee does not work and does not receive salary).

This period is normally agreed between the parties as part of a termination agreement.


Restricting Future Activities

Pursuant to Section 2125 of the Italian Civil Code a non-competition agreement (“NCA”) must comply with certain requirements, regarding prescribed form, limited object and proper consideration, aimed at compensating the employee for the restriction of his/her professional activity.

In particular, the NCA must be provided by a written form, describe in detail the restricted activities, must be limited in time (up to five years for Top Managers), must be limited in territorial scope and must provide for a specific consideration.

Italian Civil Code does not provide for any specific parameter or criterium for the quantification of the proper consideration or typical kind in which the consideration must be paid. As said, the consideration's purpose is to indemnify the employee for the partial renouncement to his/her future working activities. In light of this, the consideration has to be adequate and proportional to the sacrificed work activity and reference should be made to the territorial limit, the term of duration and subject limitation.


Severance Payments

Protection granted by law in case of null or unlawful dismissal depends on the size of the companies and on the date of commencement of employment.

    1. Employees hired before 7 March 2015 by large employers (i.e. employers with more than 15 employees in each headquarters, establishment, branch, office or autonomous department or 60 employees nationwide), fall under Article 18 of Law 300/1970, so-called Statute of workers.

      2. Severance payments provided by art. 18 of Statute of workers can be summarised as follows:

        1. In case of dismissal null and void: reinstatement of the employee (or 15 months of pay) plus payment of financial compensations equal to the salary that the employee would have earned from the date of termination to the date of reinstatement, with a minimum payment of five month of pay.
        2. In case of dismissal for just cause or subjective justified reason where the charges are not existent or punished with a minor sanction according to NCBA or dismissal for justified objective reason held manifestly not existent: reinstatement of the employee (or 15 months of pay) plus payment of financial compensations equal to the salary that the employee would have earned from the date of termination to the date of reinstatement, with a maximum payment of 12 months of pay.
        3. In case of dismissal for just cause or justified objective/subjective reason held unfounded: payment of financial compensations from 12 to 24 months of pay;
        4. In case of formal defects in the dismissal: payment of financial compensations from 6 to 12 months of pay.
    2. Employees hired before 7 March 2015 by small employers fall under Law no. 604/1966.

      3. According to art. 8 of Law no. 604/1966, in case of unlawful dismissal, the employee may be reinstatement or receive compensations from 2,5 to 6 months of pay. Note that in case of dismissal null and void art. 18 par. 1 of Statute of workers will apply.

    3. Employees hired after March 7 2015 falls under Legislative Decree n. 23/2015 (so called “employment contract with growing protections”).

      4. In case of termination declared null and void (according to art. 2 Legislative Decree n. 23/2015) the dismissed worker can be reinstated. Sanction typically entail also the payment of financial compensations equal to the salary that the employee would have earned from the date of termination to the date of reinstatement, with a minimum payment of five months’ salary.

      In case of employers with more than 15 employees, the aforementioned decree provides:

      • In case of dismissal for just cause or subjective justified reason where the charges are not existent: reinstatement of the employee (or 15 months of pay) plus payment of financial compensations equal to the salary that the employee would have earned from the date of termination to the date of reinstatement, with a maximum payment of 12 months of pay.
      • In case of dismissal for just cause or justified objective/subjective reason held unfounded: payment of financial compensations from 6 to 36 months of pay
      • In case of formal defects in the dismissal: payment of financial compensations from 2 to 12 months of pay.

Employees hired after March 7 2015 by a small employer benefit only of basic protection against unlawful dismissal when employer has a small number of workers. In case of unlawful dismissal for just cause or justified subjective/objective motive employee has the right to compensation for a maximum of 6 months of pay. In case of formal defects in the dismissal maximum compensation is 6 months of pay.


Special Tax Provisions And Severance Payments

Incentives paid to the employee for dismissal are subject to special tax treatment. The incentive is subject to separate taxation: this means that it is not subject to social security contributions and the tax rate applied is more advantageous.


Allowances Payable To Employees After Termination

Upon termination of employment, the employer must pay the notice if due plus severance pay and outstanding holidays or leave.

As mentioned above, the notice period is set by the collective agreement applied.

Severance pay is ruled by Article 2120 of the Italian Civil Code and is a sum paid on termination of employment. Its amount is equal to the sum of the salary received each year divided by 13.5. National collective bargaining agreements may provide different rules.


Time Limits For Claims Following Termination

The dismissal must be challenged within 60 days (from the receipt of the letter) and in the following 180 days, the lawsuit must be filed before a labour court.

Moreover, after termination of the relationship, the employee may file other claims within the limitation period. For example, there is a five-year limitation period for wage claims. For higher classification, the limitation period is 10 years.

If the company has less than 15 employees, the limitation period starts from the date of termination. If the company has more than 15 employees, the limitation period starts during the relationship.

5

GENERAL

Specific Matters Which Are Important Or Unique To This Jurisdiction

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Contact a Contributing Author:
Alessio Di Amato
Astolfo D Amato Avvocati Associati
Italy


Matteo Di Francesco
Jenny Avvocati
Italy


Andrea Gangemi
Portolano Cavallo
Italy


Disclaimer:

© 2021, Astolfo Di Amato Avvocati Associati, Jenny Avvocati, Portolano Cavallo. All rights reserved by Astolfo Di Amato Avvocati Associati, Jenny Avvocati, Portolano Cavallo as authors and the owners of the copyright in this chapter. Astolfo Di Amato Avvocati Associati, Jenny Avvocati, Portolano Cavallo have granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021