Employment Law Guide – Italy
1. What terms govern the employment relationship? In particular:
1.1. Is a written employment contract or statement of employment terms required?A written contract is not always required (it will depend on the type of employment contract; for example, short-term contracts must be written, whereas ordinary and simple contracts need not be written).
1.2. Are there any terms implied by law into the employment contract? Many labour laws are mandatory. Therefore, even if an employment contract does not cover specific issues or is less favourable than the statutory obligations, such labour laws will apply.
1.3. Are collective agreements with trade unions or employee representatives common (generally or in specific industries)? Employees working within the industrial, manufacturing and service sectors are generally ruled by specific collective agreements.
2. Is there a minimum wage? If so, please give details, in particular whether it applies to all employees, regardless of their age and experience. Collective agreements will always stipulate the minimum wage and an individual employment contract cannot detract from these amounts. The minimum wages set out in the collective agreements are normally linked by seniority and position.
3. Are there restrictions on working hours? If so, please give details. Yes, both EU directives and the Italian system, provide for specific limitations to the maximum working hours on a daily and weekly basis.
4. Is there a minimum holiday entitlement? If so, please give details. How many public holidays are there in a year and are they included in the minimum holiday entitlement? Italian law provides for a minimum of 4 weeks’ holiday per year. However, collective agreements may provide a longer holiday entitlement.
5. What rights do employees have to time off in the case of illness or injury? Is that time off paid? Can an employer recover from the state sick pay granted to its employees? Italian law provides that generally in the case of illness or injury, employees have the right to maintain their employment relationship and be paid. The period is typically between 9 and 12 months depending on the applicable collective agreement.
6. What are the statutory rights of employees who are parents or carers (including those of disabled children and adult dependants)? How is employee’s pay affected during periods of leave?Employees who are also parents or carers are entitled to permits.
7. Does a period of continuous employment create benefits for employees? Yes, the seniority accrued within a company (and according to terms within the applicable collective agreements), can provide for increased benefits in remuneration and other substantial terms of the employment.
7.1. If individual employees are transferred to a new entity, are they deemed to retain their period of continuous employment? Yes
8. To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees? Agency workers and employees usually have very different contract terms and consequently, different rights. However, there are some specific, and limited, provisions that can be extended to agency and temporary workers as well.
9. What statutory data protection rights do employees have? Employees have the same rights as any other person in relation to data protection. Consequently, the employer must follow the specific EU and national regulations on data protection.
10. What protection do employees have from discrimination or harassment, and on what grounds? There are various laws that cover anti-discrimination and sexual harassment, including article 15 of the Law 300/1970. Article 15 generally forbids discrimination on the grounds of political opinion, gender, religion etc.
11. Do whistle-blowers have any protection? If so, please give details. A recent law provides for protection to whistle-blowers.
12. What rights do employees have when their employment contract is terminated? Please provide information on:
12.1. Notice periods. The duration of an employee’s notice period will depend upon the applicable collective agreement and the seniority of the employee.
12.2. Severance payments. A severance payment must be paid to an employee on the termination of his/her employment contract. This payment is usually in the region of about 1 month’s salary for every year worked with that employer.
12.3. Any procedural requirements for dismissal. The law provides for specific rules and procedures with regards to the termination of an employment relationship. A termination must always be in writing.
13. What protection do employees have against dismissal? Are there any specific categories of protected employees? A dismissal must be challenged within 60 days of the written communication being provided. An employee may claim against the company for unfair dismissal. Remedies include the payment of an indemnity and in certain cases, reinstatement.
14. What rules apply on redundancies? Redundancy procedures are specifically governed by Law 223/1991.
15. Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? Usually, employees are not entitled to be represented on the board of directors.
15.1. Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)? Yes, employees may be consulted in relation to major transactions. The procedure and guidance for employee consultation will vary, dependent on the specific type of transaction.
16. What are the remedies that are available if an employer fails to comply with its consultation duties? In order to avoid a negative judgment for detrimental trade union behaviour, an employer must provide the trade union representative with complete information in relation to the transaction, and they must also follow the consultation procedure, if requested by the trade union representative.
16.1. Can employees take action to prevent any proposals going ahead? Yes, trade union representatives can commence court proceedings against the company for detrimental trade union behaviour, using an urgent procedure.
17. Is there any statutory protection of employees on a business transfer? In particular:
17.1. Are they automatically transferred with the business? Yes.
17.2. Are they protected against dismissal (before or after the disposal)? Yes.
17.3. Is it possible to harmonize their terms of employment with other (existing) employees of the buyer? Yes.
18. Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded? If so, please give details. An employer is entitled to reward employees with specific bonuses, there are no restrictions to this.
19. Is It possible to restrict an employee's activities during employment and after termination? If so, in what circumstances can this be done? Must an employer pay its former employees remuneration while they are subject to post-employment restrictive covenants? Yes, non-competition clauses are permitted, provided that the employee receives a fair payment as compensation for the restrictions.
20. Are there any proposals for major reform of employment law or pensions law in your jurisdiction? There are several proposals currently under discussion within Italy.
21. Does an Employer need to have a subsidiary company, branch or other legal entity to employ people? If so, is there a requirement for a general manager or other key personnel? No, however, it is strongly advisable for a company to have a branch or subsidiary within Italy.
22. Does salary need to be paid in the country in which the work is done? No, this is not necessary.
23. Do meetings and documents need to be in your local language even if both parties speak good English? No.
24. What legal limitations are there on the notice period the parties can agree (for example minimum notice periods)? Provided both parties agree in writing, the entitlement to a notice period can be limited or even avoided.
25. What benefits does the employer have to provide in addition to salary? An employer must also provide some specific services and benefits to their employees. This will include payments such as social security contributions and fiscal payments.
26. Are there circumstances where it is possible to engage someone as a consultant rather than an employee? If so, what are those circumstances? Yes, a person can be engaged as a consultant, rather than an employee. However, this will be dependent upon the circumstances surrounding the execution of the individual’s duties.
27. Where applicable, what are the advantages and disadvantages of engaging as a consultant rather than an employee? In relation to fiscal payments and social security contributions, it is certainly more convenient to engage a consultant rather than to hire an employee. The costs involved in an employment relationship are significantly higher and there are many more, and stronger, limitations governing the terms of an employment relationship.
28. What other key issues should a company employing someone be aware of? If a company hires an employee, any termination of the employment relationship will need to be justified.
Written by - Giuseppe Bulgarini and Roberto Tirone from Cocuzza & Associati
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