Italy: International Employment Update: New Legislation (Italy) - February 2010

Last Updated: 23 March 2010
Article by Caterina Rucci

Originally published February 2010

Finance Act (Law. 23 December 2009, N. 191)

Law 23 December 2009 n. 191 introduced some new provisions regarding employment law, the most important of which are: 

  1. New incentives (in addition to the ones already provided by employment laws) for employers who hire unemployed people. Such new incentives concern particular categories of unemployed people (such as unemployed people over 50 years of age or the unemployed who have already paid at least 35 years of pension contributions and will be entitled to a special pension but haven't yet reached pensionable age). The incentives are made up of reductions in social charges due by the employer and, in some cases, the payment to the employer of a part of the unemployment allowance "saved" thanks to the hiring. 
  2. The introduction of "staff leasing" (i.e. workforce supply from one employer to another for an open-ended term). Under Italian employment law such supply can only be made by specifically authorised entities and companies; law n. 247/2007 had provided that employers could use workforces supplied by others (by using the employees hired and paid by such entities) only for temporary and specific reasons provided by law and for a fixed term. Law 23 December 2009, n.191 has also allowed workforce supply for an open-ended term for some specific jobs and activities. For example, open-ended contracts for workforce supplying can now be signed with reference to following activities: 
    • IT services and consultancy; 
    • cleaning and custody services;
    • carriage services; 
    • marketing and business consultancy;
    • human resources consultancy and recruitment; and
    • other cases expressly provided by collective agreements.


Court Of Cassation 13 August 2008 N. 21579 - Termination For A Justified Objective Reason  

In case of termination for a "justified objective reason", the employer has to give evidence of the redundancy of employee's job position and evidence that no other similar position to which the employee might be assigned exists.

The Court of Cassation has now diverged from previous case law by requesting that the employer, before terminating an employee, not only checks if the employee can't be assigned to tasks equivalent to the ones of the position redundant, but also checks if the employee would be ready to accept such a position, lower positions commensurate with the employee's skills and professional career (provided that this position is available within the employer's organisation and activity).

Therefore, if the employee accepts a lower position, the employer (who has to offer such a position if available) can't terminate him. Consequently termination is lawful only if the employee can not be assigned to an equivalent position AND refused a lower position offered to him by the employer.

Court Of Cassation 10 February 2009 N. 3276 - Termination Of Fixed Term Employment Contracts

A fixed term contract cannot be terminated before its original term of expiration unless a "juste cause" occurs, as provided under section 3 of law. n. 604/1966.

Court of Cassation has declared the unlawfulness of the termination of a fixed term contract due to a mere reorganisation of the employer's activity, which cannot be construed as a "juste cause". According to the Supreme Court, termination for reasons relating to the employer's activity or its organisation (i.e. justified objective reason) is allowed only towards employees hired with open-ended contracts. In fact, an employee hired with a fixed term contract can be terminated before expiration only for a "just cause" which consists of a very fundamental breach of contract by the employee.

Consequently if the employer terminates a fixed term employee for organisational or technical reasons (for example a modification of activities or the closure of the workplace) it must pay compensation to the employee for unlawful termination, which is generally equivalent to the salary which would have been due from the date that the contract is terminated to the expiration of the original term provided in the contract.

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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