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5 Italian Labour Law Trends

5 Italian Labour Law Trends

Giovanni A. Osnago Gadda, Of Counsel of Morri Rossetti e Associati, provides an overview of the latest labour and employment law trends over the past year, and offers insights on what companies might expect to see in terms of employment law.

#1 Trend Whistleblowing

On November 15th 2017, with the Law n. 179, Italy enforced a new legal discipline on whistleblowing, completing the existent legislation for public employees and providing a separate process for private ones. Private sector companies adopting the organizational model (set out by the Legislative Decree 231 of 8 June 2001) must provide channels allowing employees to report “relevant wrongdoings” and “based on precise and consistent evidence” or “violations of compliance programs they became aware of by reason of employment”. The Law provides measures to protect the whistleblower, including the obligation to ensure the confidentiality of the reporter’s identity and to grant at least “an alternative channel” for whistleblowing disciplinary sanctions against “anyone who violates measures in place to protect whistleblowers”, as well as against “anyone who performs, with intent or gross negligence, groundless reports” the prohibition of retaliatory or discriminatory acts.

#2 Trend Decreto Dignità «Dignity Decree»

Starting from 31 October 2018, the Decree Law n. 87/2018 (the so called “Dignity Decree” became a Law n. 96/2018), in addition to restrain the applicative field for flexible work, has introduced additional elements of complexity in the Italian Labour Law. In particular the new rule on fixed-terms contract and staff agencies contract presents several critical issues that are going to make it particularly difficult to manage. Below is summarized a brief overview on the relevant aspects which are:
a) Fixed-terms contract
b) Staff Agencies contract
c) Unlawful dismissal

#3 Trend Judgment n. 194/2018 of the Constitutional Court

In November 2018 the Italian Constitutional Court held that article 3, paragraph 1, of the Legislative Decree n. 23/2015, the so called “Jobs Act”, with reference to the words: “of an amount equal to two months’ basic gross salary” is unlawful. Before (for employees hired after 7 March 2015), in case of unfair dismissal the employee had the right to obtain compensation equal to two months’ salary for each year of service, with a minimum of 4 and a maximum of 24 months. This rule, according to the Court, is contrary to the principle of equality as it complies different situation. In particular, the Court also considers that the prejudice caused by an unfair dismissal may vary according to several factors and seniority is only one of these factors, thus it shall not be considered exclusively. The judge shall consider other items drawing from the ones already provided by previous legislation – as, for example, art. 8 L. 604/1966 and art. 18 L. 300/1970 – in order to “customized” the damage suffered by the employee. Furthermore, the Court states that art. 3 paragraph 1 Legislative Decree n. 23/2015, is at variance with the principle of reasonableness: the indemnity equal to two months’ salary for each year of service is considered insufficient to grant an appropriate compensation to the injury suffered by the redundant worker and, from another point of view, is not liable to deter the employer resolute to proceed with an unfair dismissal. According to the Courts this inadequacy is due to the rigid and exclusive connection with the seniority of service, especially when the seniority is not high. Finally, the Court established that the rule would infringe also the principle set out in the European Social Charter and, in particular art. 24 grants to employees fired without a valid reason of termination to receive adequate compensation.

#4 Trend Social Buffers

The Government (D.L. 119/2018) has reintroduced the possibility for total or partial downsizing companies’ case to request an extraordinary wage subsidy (CIGS) in crisis situations. A similar provision was abolished by the previous Government, giving rise to complaints from both companies and unions. The new provision aims to safeguard employment by providing funds to enable companies in crisis to either continue operating or sell their business, by rehiring redundant employees. The subsidy can be obtained in three situations: I. when there is a material possibility of a quick transfer of the undertaking and consequent rehiring of employees; II. when the company wishes to carry out a re-industrialisation (i.e. transform the activity) of the production site; III. when the redundant employees are involved in active re-employment policies put in place by the relevant Region. There are some limits: firstly, the measure is only valid for the coming years 2019 and 2020. Second, there is a maximum 12-month limit on its duration. In addition, before filing the request for CIGS, an agreement between the company and trade unions must be signed before the Ministry of Labour, with the possible involvement of the Ministry of Economic Development (MISE) and the relevant Region.

#5 Trend Prisoners Labour

The Legislative Decree October 2nd 2018, n. 124, has reformed the prison system rules with particular attention on life in prison and work in prison (previously contained in Law 354/1975). The reform establishes that in the penitentiary institutions as well as in the other correctional facilities must be strongly encouraged professional training course and work activities. In order to encourage this practice, the prisons are allowed to sell the products made by prisoners or rendering services through work activities of the prisoners at a price equal or lower to the effective price of the product according to the local market. The prisoners, according to their attitude and passions, might be admitted to exercise, on their own, - in the field of the treatment program - craft intellectual or artistic activities, or to product goods for self-consuption or equal services in the area where the prison is located. The assignment of the tasks to each prisoner is evaluated by the Joint Committee established by each prison. According to art. 13, the working time is fixed and may not exceed the limits provided by the law (for private- employee) and remunerated holidays, annual leave, insurance and pension are granted. Insurance, pension and every other guarantee provided by the law should be granted even to prisoner and to prisoner taking training professional courses. Prisoners’s work activity has to be remunerated. The compensation is calculated with regard to the quality and quantity of the work carried out, in an amount equal to 2/3 of the compensation provided by collective bargain. According to the new paragraph 8, art 20 above, central and local administrative entities may conclude specific agreements with public or private companies or with cooperative companies interested in prison work in order to facilitate the integration of these subjects into the working world. The agreements or the proposal are published on the administration department web site. Finally, prisoner who have completed the punishment and are unemployed, according the new art. 20 of the Law 354/1975 and within the limits of the available resources, can accede to the check (granted to unemployed workers) to find a new job outside prison.

Read the whole document:  “5 Italian Labour Law Trends”


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