Employment 2022 Comparisons

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").

Employers affected

The new procedure involves employers who:

• employed an average of 250 or more employees (including apprentices and executives) in Italy during the previous year;
• are willing to shut down an office, a plant, a branch, an autonomous unit or division located in Italy, leading to the termination of the relevant activity that prompts the dismissal of 50 or more employees.

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.

Procedure

Notice

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:

• company union representatives (if formed)
• local offices of the most representative trade unions
• regional administrations concerned
• Ministry of Labour
• Ministry of Economic Development
• National Labour Agency (ANPAL).

The communication must contain:

• the economic, financial, technical or organisational reasons that trigger the closure;
• the number and professional profiles of the employees employed; and
• the date of the closure.

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:

• measures for preserving employment levels and actions for managing the redundancies (eg, usage of wage integration fund, relocations and leaving incentives);
• any other measure aimed at facilitating the employees’ reoccupation, such as professional training (which can even be co-funded by regional offices);
• possible programmes for selling the entire company or part thereof to the affected employees (for the purpose of continuing the company’s activity);
• possible reconversion projects related to the company’s premises under closure; and
• implementation procedures and their timelines.

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:

• implement all the actions set out in the plan; and
• update the trade unions on a monthly basis with regard to the implementation of the plan.

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:

• an extraordinary wage integration fund for a maximum of 12 months; and
• participating in a public programme aimed at facilitating their reoccupation (Garanzia di occupabilità dei lavoratori or GOL).

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:

• last 30 days (instead of 75 days) because it is no longer required to carry out the union consultation phase;
• require the employer to pay dismissed employees a “dismissal ticket” increased by 50% of the amount usually paid for collective dismissals (ie, a maximum of EUR7,531.92 each).

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 employer fails to submit the plan;
• the plan does not contain the essential elements; or
• the employer is in breach of its duties as set out in the plan.

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.

Probationary period

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.

Parallel employment

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:

• the work takes place within predetermined reference hours and days; and
• the employee is informed by their employer of a work assignment within a reasonable notice period.

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.

Mandatory training

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.

Employees’ Categories

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

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

Distinction between Blue-Collar and White-Collar Work

The collective bargaining agreement applied by the employer (if any) provides for subcategories/levels 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

• blue-collar workers are still paid on a daily basis, whereas the salary of white-collar workers is calculated on a monthly basis; and
• the sickness indemnity for white-collar workers is charged, in whole or in part, to their employer in certain sectors, whereas the sickness indemnity for blue-collar workers is fully reimbursed by the Italian Social Security Contribution Institute (INPS).

Open-Ended Full-Time Employment Agreements

No formal requirements are set forth by the law and the parties can also execute the agreement orally, except for 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:

• parties to the agreement;
• workplace;
• employer’s legal seat;
• employee’s job category and level;
• starting date;
• type of employment (open-ended or fixed-term);
• in case of staff-leasing/temporary workers, details of the relevant relationship*;
• probationary period and its duration;
• possible training programme managed by the employer*;
• holidays and paid leave*;
• dismissal/resignation notice period*;
• compensation;
• working time and overtime;
• NCBA applied*;
• who is responsible for social security and insurance contributions*.

*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:

• temporary and objective needs not related to the employer’s ordinary activity;
• necessary cover for employees still in force;
• needs related to a temporary, significant and unforeseeable increase in the ordinary activities; or
• specific needs provided under collective bargaining agreements.

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).

Prohibitions

Employers are prevented from hiring employees under a fixed-term agreement in certain circumstances, including:

• replacing employees on strikes;
• hiring in production units where collective dismissals have been implemented or wage integration funds have been applied in the previous six months; or
• where the employer did not carry out the risk assessment evaluation in accordance with health and safety legislation.

Maximum duration

The entire relationship between the same employer and the same employee cannot exceed 24 months for the execution of the tasks and duties 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.

Priority right

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.

Sanctions

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.

Full-Time Employment

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

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

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

Part-Time Employment

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

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

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

Formal requirements

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

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

Elastic covenants

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

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

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.

Additional Compensation

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).

Holidays

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

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

Maternity Leave

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

During their leave, mothers are entitled to receive the payment of an indemnity from INPS 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.

Paternity Leave

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).

Adoption

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

Parental Leave

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 Leave

Other particular leaves are granted by the law and NCBAs to employees with or without parental status, including for:

• breastfeeding breaks
• a disadvantaged or sick child;
• study leave;
• marriage breakdown;
• donation of blood;
• elections; and
• trade union activities.

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).

Illness/injury

According to Article 38 of the Italian Constitution, employees have the right to be granted adequate means of subsistence in the event of illness or injury. Furthermore, Article 2110 of the ICC recognises the right of the sick or injured employee to maintain 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).

Confidentiality requirements

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

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

After the termination of the employment relationship, employees are subject to criminal sanction if they disclose confidential information of their employer (as defined by the Italian criminal system). 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:

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

It is 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:

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

Employers are obliged to provide the following additional information:

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

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).

RSAs

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.

RSUs

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

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

The number of components is equal to:

• three employees in units with up to 200 employees;
• three for every 300 employees in units employing up to 3000 employees; and
• three components for every 500 employees in the production units that employ more than 3,000 employees.

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:

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

An agreement may be qualified as 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:

• confederation level;
• national level;
• and local level (which includes agreements executed at company level).

Collective bargaining agreements are generally formed by rules that can be grouped into the following categories.

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

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

Individual Dismissal

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.

• Just cause – a serious infringement of the obligations related to the performance of the job or an external deed, such as committing a crime, that jeopardises the relationship of trust between the employer and the employee). In this case, the dismissal is effective immediately and the employee is not entitled to a notice period. (Fixed-term employees can be dismissed only for just cause.)

• Justified subjective reasons – these entail serious non-fulfilment of the employee’s contractual obligations, but not enough to constitute a just cause. In this case, the employee is entitled to the notice period applicable (or the relevant indemnity in lieu of it). This differs from a just-cause dismissal in terms of the seriousness of the employee’s misbehaviour (ie, this is more serious in cases of just cause).

• Justified objective reasons (redundancy) – these are defined by law as reasons relating to the production activity, the organisation of work, and the regular functioning of the enterprise that trigger the suppression of the job position. Mandatory procedure must be implemented by the employer (if they employ more than 15 employees) in a case of dismissal for justified objective reasons of an employee hired before 7 March 2015. Failing to comply with the procedures renders the dismissal unlawful.

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

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

Collective Dismissal

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:

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

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

Notice Periods

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

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

The length of the notice period is provided by NCBAs and depends on the category/subcategory/level of the employee, the length of service and 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.

Severance

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

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

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

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

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

A particular procedure is set forth by the law for protecting mothers and fathers (ie, pregnant employees and parents of a child under the age of three). 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:

• within six months of the termination of the employment relationship (if the settlement agreement is executed during the employment relationship); or
• from the date of execution (if the settlement agreement is executed following the termination of the employment relationship).

The above-mentioned provision does not apply if the settlement agreement is executed in front of certain subjects, including:

• courts;
• the Labour Office;
• settlement committees formed in accordance with the relevant NCBA; or
• authorised subjects.

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

Italian law provides strict 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.

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

Particular limitations are also provided by the law in 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:

• the seriousness of the unlawfulness;
• whether the dismissed employee is an executive;
• the date the employee was hired; and
• the size of the withdrawing employer.

Dismissal Grounded on Discriminatory/Retaliatory Reasons

If the court ascertains the discriminatory/retaliatory nature of the dismissal, the dismissed employee is entitled to 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.

Executives

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.

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

Employees hired after 7 March 2015 are entitled to the following protection regime.

• The sanction of reinstatement plus outstanding salary (capped at 12 months) and social security contributions is applicable only if a dismissal based on just cause or justified subjective reasons is considered manifestly ungrounded by the court. This sanction does not apply if employees hired after 7 March 2015 are dismissed for justified objective reasons.
• If the dismissal grounded on just cause or justified subjective reason is considered by the court “simply” ungrounded – or, in case of dismissal grounded on justified objective reasons, unlawful – the employee is entitled to receive an indemnity ranging from six to 36 months' worth of their salary (plus an indemnity in lieu of notice period).
• In case of breach of the procedure set forth in Article 7 of Law 300/1970 or violation of the obligation to point out the reasons for the dismissal in the dismissal letter, the employer must pay the employee an indemnity ranging from two to 12 months' worth of their salary (plus an indemnity in lieu of notice period).

Employers with 15 or Fewer Employees

Employees are entitled to receive an indemnity ranging from two-and-a-half to six months' 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:

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

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

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

According to Article 91 of ICPC, 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.