Italy: Italy's Labor Law Reform: A Historic Recast Of Labor Rules

Last Updated: 3 September 2013
Article by Gabriele Bernascone and Paola Sangiovanni

Labor laws with profound historical, social and economic significance have recently been changed by the Italian legislator, following a lengthy debate aimed at reconciling employee's protection with access to employment. Through law 92 of June 28, 2012, the newly enacted provisions have been confirmed and are now final. Here follows a summary of the major changes.

  • A 20-DAY TERM TO ATTEMPT CONCILIATION FOR ANY TERMINATION ATTRIBUTABLE TO THE EMPLOYER. If a company employs more than 15 employees, it must first notify the governmental labor agency (Direzione territoriale del lavoro) of any termination due to objective reasons, which within the following 7 days will call a meeting, to be held within the subsequent 20 days, between the parties aimed at seeking solutions alternative to the dismissal. Absent a conciliatory solution within such 20 days, the dismissal may be communicated by the employer to the employee and will be effective retroactively from the date of first notification of the dismissal.
  • LIMITATIONS TO THE RIGHT OF REINSTATEMENT OF THE EMPLOYEE. Only the employee who was dismissed due to discriminatory reasons or due to marriage, paternity or maternity is entitled to be reinstated in its employment position and obtain a 5- month indemnity. In alternative to the reinstatement, the employee can opt for an indemnity of 15 monthly payments.
  • HEIGHTENED LIMITATIONS TO COURT'S DISCRETION. If the facts on which a disciplinary dismissal is based are found to be nonexisting by a Court or if they should have been punished with a lesser sanction, the employer must reinstate the employee and pay an indemnity not exceeding 12 monthly salaries. In any other cases (e.g., the grounds of just cause or objective reason are not found), the dismissal is confirmed and the employee is not reinstated, but an indemnity between 12 and 24 monthly payments must be paid.
  • FASTER COURT PROCEEDINGS RELATING TO EMPLOYMENT TERMINATION. If the employee judicially challenges his/her termination, the proceedings will follow a two-phase approach. In an initial phase, the Court will mandatorily schedule a first hearing within 40-days from the lodging of the complaint and will decide on the provisional acceptance or rejection of the claim with an order issued after a summary ascertainment of the facts. In the course of a second phase, which only occurs if the order is challenged by any of the parties, the Court will carry out a more in-depth assessment of the facts and issue a judgment (subject to appeal) within 10 days from the discussion hearing.
  • A NEW PROCEDURE APPLICABLE TO RESIGNATIONS. In order to avoid the phenomenon of letters of resignation signed in advance and not truly mirroring the will of the employee, new rules apply in order to ensure the effectiveness of resignation:

(i) within 5 days from the resignation, the employer must communicate to a governmental labor office the received resignation;

(ii) the resignation becomes effective if it is confirmed at a trade union or governmental labour office, or if the receipt of the above communication is signed by the resigning employee;

(iii) if the resigning employee does not perform any of the steps described above under (ii), within 30 days from the resignation date the employer must invite in writing the employee to perform such steps within 7 days from the invitation;

(iv) the resignation is effective if the employee does not comply with the invitation or if he/she does not revoke the resignation within the above mentioned 7-day period (note however that the resignation is not effective if the employer does not issue the invitation).

  • INDEPENDENT CONSULTANT? NOT IF 2 OF THESE REQUIREMENTS APPLY. Independent consultants, having their own VAT number, will be regarded as having a stable cooperation relationships (so called, CoCoCo or COllaborazione COordinata e COntinuativa) or, absent the requirements of CoCoCo, as an employment relationship, provided that 2 out of the following 3 requirements apply: (i) the duration of the consultancy exceeds 8 months within a single solar year; (ii) the overall compensation received but the same group of companies exceeds 80% of the total compensation of the consultant within a single solar year; (iii) the consultant enjoys a fixed workspace at one of the offices of the company. Exceptions are made in case of contrary evidence provided by the company, highly specialized skills acquired through a significant educational path or considerable practical expertise, and if the total yearly revenue of the consultant is below €18k.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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