Italy: Annual Leaves And Days-Off Under The Italian Employment Discipline

Approaching the deadline to use/pay to employees annual leaves and days-off matured and not used, we summarize here below their discipline.

LEAVES

With the aim to reintegrate worker's psychophysical energies, the Italian jurisdiction (art. 36 of the Constitution, art. 2109 of the Civil Code and art. 10 of the Legislative Decree no. 66/2003) recognises to employees the right to an annual paid period of leaves not lower than 4 weeks for every working year (articles 7 and 22 of the EU Directive no. 88/2003), being understood that more favourable conditions can by applied under a specific National Collective Bargain Agreement.

DEPLETION/USE AND PAYMENT

The above mentioned period of 4 weeks has to be taken for at least 2 weeks, consecutives upon employee's request, during the year of their maturing and, for the other 2 weeks, within the 18 months following the end of the year of their maturing (art. 10, paragraph 1 of Legislative Decree no. 66/2003, as modified by art. 1 of the Legislative Decree 213/2004).

The period of 4 weeks can't be substitute by a severance payment caused by the missed depletion/use by the employee, except the case of dismissing of the same.

The law (art. 10, paragraph 2 of the Legislative Decree no. 66/2003) foresees just the chance for the employer to pay to the employee not used leaves only with reference to those period exceeding the 4 weeks actually used (Pension Authority message 79/2003).

Usually the employer plans the period of leaves according to corporate needs and employee's interests. In case the employer reject to concede due leaves to the employee, this last one can't stay away from work in a period chosen by himself, because this would contrast to a regular activity of the company.

The autonomous decision by the employee on leaves' period will be a severe disciplinary violation, that legitimates dismissals for just cause.

INFRINGEMENTS

The employer that doesn't ensure to the employee an annual period of paid leaves of at least 4 weeks is punished with an administrative fine from € 100,00 to € 600,00.

If the above mentioned infringement is referable to more than 5 employees or has been protracted for at least 2 years, the administrative fine applicable will be from € 400,00 to € 1.500,00.

If the above mentioned infringement is referable to more than 10 employees or has been protracted for at least 4 years, the administrative fine applicable will be from € 800,00 to € 4.500,00.

No reduction is allowed on the above mentioned payments.

ANNUAL DAYS OFF (ABOLISHED FESTIVITIES – ROL – TIME OFF)

A certain amount of paid days-off are recognized to employees on an annual basis, referring to single National Collective Agreements for the exact amount, substituting the formerly recognized hours for working period reduction (ROL) and abolished festivities (Law 5/3/77, no. 54).

The working hours reduction (ROL), is usually made by time-off periods that can form one or more working days-off.

Rules on days and time off is leaved to parties, being just a mere contractual agreement and the missed respect of agreed terms doesn't contemplate any criminal infringement.

DEPLETION/USE AND PAYMENT

Employers can foresee, after having agreed terms and conditions with employees' unions representatives, different terms of use of annual paid days off, in accordance with technical and productive corporate needs.

In case days-off are not used with the same year of their accrual, National Collective Agreements usually foresee a time limit for they use (generally within June 30th of every year).

When the employee, within the agreed time limit, hasn't used all days-off, a substitutive severance payment is recognized, calculated in the base of the salary paid at the moment of expiration of the above mentioned limit.

INFRINGEMENTS

In case of infringement of rules set fro days-off article 509 of the Italian Procedure Code and articl 1 of the Law 741/94 are not applicable, since those measures are applicable just to infringements pertaining National Collective Agreement with a general value.

PENSION CONTRIBUTION DISCIPLINE

In case of missed deployment/use of annual days-off at deadlines agreed by NCAs, or in case of missed payment of a substitutive severance amount, the payment of Pension Contribution is in any case due within the 16th day following the said time limit (Answer by the Ministry of Employment no. 16 dated March 8th 2011).

Employers have to add the amount related to not used days-off to the salary of the month following the one of the due date.

In case the unused annual day-off is recovered by the employee in a period following the pension contribution payment, the paid contribution is no more due being valid the amount paid in advance.

CONSEQUENCES

As outlined the direct consequence of the missed use/payment of matured leaves and days-off, makes the employer punishable with administrative and contribution fines, that under certain conditions can involve also criminal law.

In order to avoid said fines the strong suggestion is to make employees use remaining hours/days-off at 31.12.2011 within 30.06.2012 or, alternatively pay the same recognizing a substitutive severance payment, including the amount in June's salary (this will imply the payment of related withholdings and Pension Contribution within July 16th 2012).

DUE DATES SUMMARY

PLANNING

In order to allow employers to better plan the above mentioned time limits and contribution payments, they should ask to their payroll service providers to be provided with a summary of leaves, days and hours off and abolished festivities already matured but still not used by employees.

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.