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    INVEST IN ITALY

    Ordinary proceeding

    Special provisions of the Italian Code of Civil Procedure (Art. 409) apply to labor proceedings and provide for special and quick resolution of individual disputes. A first instance decision is normally issued within 12 months, on average.

    The main features of the special procedure of individual labor disputes are the following:
    •a quick proceeding compared with an ordinary civil proceeding;
    •a mandatory conciliation attempt by the Judge prior to the hearing stage;
    •wide powers granted to labor Courts, including the faculty to introduce on its own initiative new evi- dence and to order one of the parties to pay sanctions, indemnities and compensation during the pro- ceedings for the amount that has already ascertained to be due;
    •prohibition on changing the parties' initial pleading.
    Judgment in the first instance may be challenged before the Court of Appeal, further appeal may be made to the Supreme Court.

    "Fornero" special proceeding

    The Fornero reform (Law no. 92/2012) introduced an even faster procedure restricted to unfair dismissal di- sputes in companies with more than 15 employees.
    Judges are in this case obliged to schedule the first hearing within 40 days of the complaint.
    The judge, within 10 days of the first hearing must issue a judgment to reject or uphold the claim. The judgment is immediately enforceable.
    The parties may appeal this judgment to the Court of Appeal, which may in turn be challenged before the Su- preme Court.
    The "Fornero" procedure does not apply to workers engaged under the new "Jobs Act regime".

     

    A Consolidated Act on Workplace Safety (Legislative Decree no. 81/2008) unities all legal provisions regarding health and safety in the workplace and is enforceable in all sectors. The Act provides an exhaustive explanation of the rules on safety, including the powers, responsibilities and functions that may be delegated.

    Employees are entitled to elect a representative to deal with health and safety related matters, and to be trained on the peculiar risks to which the company is exposed.

    The Constitution and the Civil Code impose a general obligation on employers to safeguard the physical integrity and moral personality of their employees.

     

    The union procedure

    Pursuant to Art. 24 of Law no. 223/1991, a mandatory procedure must be started whenever an employer staffed with more than 15 employees intends to dismiss 5 or more employees in the same business unit, within a ti- meframe of 120 days, due to a reduction/reorganization/closure of the company's business.
    The collective dismissal applies to all employees, including executives.
    The procedure begins with the employer submitting a written notice to the works councils (if any) or to the Trade Unions to inform them of its intention to carry out a collective dismissal.

    The notice must include the following information:
    •the reasons for the collective dismissal;
    •the technical, organizational and productive circumstances for which such dismissal cannot be avoi- ded;
    •the number of concerned employees, their duties and characteristics;
    •the date on which the dismissal shall be implemented;
    •the measures, if any, that will be taken in order to reduce the social impact of the dismissal.

     

     

    Note that the same collective dismissal, employers may face different outcomes, depending on the date the employee has been hired.

     

     

    General principles

    Dismissal should always be provided by written notice. Individual dismissals of employees are subject to certain restrictions

    Open ended contracts can be terminated without any compensation or additional sanction where there is just cause ("giusta causa") or objective or subjective justified grounds ("giustificato motivo").

    Just cause means a very serious breach (e.g. theft, serious insubordination) or any other employees behavior that seriously undermines the trust relationship on which employment relationship is based. Justified grounds means either:

    •subjective justified grounds, consisting of a less serious breach of the employee (e.g. failure to follow important instructions, willful misconduct, repeated non-justified absences from work);

    •objective justified grounds, consisting of an objective reason related to the employers need to reor- ganize its production activities or workforce setting.

    Termination of fixed-term contracts

    If one of the parties terminates the contract before its expiration date and without just cause, the other party may be awarded a proper compensation.

     In the event of early termination by the employer, compensation would customarily amount to that which the employee would have accrued up to the contract expiration date.

     

    Resignations

    Generally, resignations do not need to take any specific form, however most collective agreements require that this be in writing. According to certain NCAs, in case of resignation, the length of the notice period may be shorter than in the case of dismissal.

    Notice and termination payments

    Upon termination of employment relationship, employees are entitled to:

    •the payment of deferred wages (TFR);
    •the payment of some minor termination indemnities (payment in lieu of unused holidays and leave, accrued pro-rata 1^ and 14^ monthly installments and so on);
    •a notice period of termination, the duration of which varies according to the employees' seniority and professional level and as established by national collective agreements.

    The payments under points (i) and (ii) above are always due in the case of dismissal, while the notice period (or the relevant indemnity in lieu) would not be due in the case of dismissal for just cause.

    With respect to point (iii) above, it is worth noting that the employer is anyway entitled to exempt the employee from working during the notice period. In such case, the employee would be entitled to receive the correspon- ding indemnity in lieu, which would be equal to the normal salary (plus social security contributions) that would have been due during the notice period.

     

    Unfair dismissals

    Jobs Act has introduced a new regime for individual and collective unfair dismissal, remarkably reducing the instances of reinstatement and establishing a transparent framework for possible disputes. The new provisions apply to:

    •employees hired on an open-ended basis from 7th March 2015;
    •employees hired before 7th March 2015 on a fixed-term basis whose contracts were converted into an open-ended contract after 7th March 2015;
    •apprentices hired before 7th March 2015 whose contracts were converted into an open-ended con- tract after 7th March 2015.

    (a) Dismissals before enforcement of Jobs Act

    Should the dismissal be deemed unfair by a Court, the employer would be required to do either of the following two actions:

    1.if the reasons for the dismissal are considered totally unlawful: reinstatement and payment of a compensation equivalent to maximum 12 months for non-worked period (plus social security con- tributions). The employee may waive the right to reinstatement, opting to receive an additional com- pensation equal to 15 monthly wages;

    2.if the reasons for the dismissal are considered concrete, but insufficient to justify the dismissal: pay- ment to the dismissed employee of an indemnity ranging from 12 and 24 monthly wages of the last annual salary.

    Employees of small firms (less than 15 employees) are entitled to receive a compensation ranging from 2.5 to 6 months

    wages.

    In case of discriminatory and void (e.g. oral) dismissals, regardless from the number of employees, point (i) above applies.

     

    (b)Dismissals after enforcement of Jobs Act

    In the event of termination for economic or disciplinary reasons the Court finds to be unfair, employees are en- titled to an indemnity equal to 2 monthly wages for each year of employment, with a minimum of 4 months up to a maximum of 24 months.

    The Court may require reinstatement of the employee only in the case of void and discriminatory termination or should the Court find that the allegation for dismissal on subjective reasons was not based on fact.

    In smaller firms (less than 15 employees) the indemnities will be halved and cannot in any case exceed 6 months wages. Reinstatement is foreseen only for void and discriminatory dismissals.

    In order to prevent possible disputes, a fast and convenient extra-judicial settlement procedure has been esta- blished, allowing the employer to offer the worker an indemnity equal to 1 month's wage per year of service, for a minimum amount equivalent to 2 months wages up to a maximum of 18 months wages. Acceptance of this transaction prevents any further appeal by the employee. The sum paid is not subject to social security contri- bution or to fiscal taxation.

     

    Dismissal of executives

    Though similar principles apply, dismissal of executives is not regulated by the same statutory provisions go- verning termination of lower-level employees. Given the high level engagement, fairness of an executives' di- smissal is normally assessed unless it is shown to be a violation of correctness and good faith principles. The High Court (Corte di Cassazione) has indeed repeatedly confirmed that concept of "fairness" of an executive’s termination does not coincide with the notion of "just cause" and "justified reason" (applicable to normal em- ployees), but that it includes any reasonable ground for termination not limited to a breach of the correctness and good faith rules which underpin an employment relationship.

    Part-time contract

    Part-time employment contracts must be in writing and specify the hours of work (e.g. by day, week, month and year).

    Pay and other entitlements of part-time employees are normally pro-rated to those applicable to full-timers in the same job entitlement.

    Ancillary clauses to part-time contract can be added, which allow employer a wider flexibility:

    •"elastic clauses" (clausole elastiche) which permit an employer to increase working time;
    •''flexible clauses" (clausole flessibili) which permit an employer to vary working hours during the day.

    Fixed-term contract (legislative decree no.81/2015)

    Companies can hire employees on a fixed-term contract for arrangements limited by time. Fixed-term contracts can last up to 36 months, including any extension.

    Quantitative limits are normally set by the NCAs; alternatively, the law states that the overall number of fixed- term contracts may not exceed the 20% threshold of the work- force hired on permanent basis.

    Fixed-term contracts cannot be used to replace workers on strike or to replace employees temporarily laid-off or involved in collective dismissals in the past few months

    "On call" jobs ("lavoro a chiamata o intermittente" legislative decree no.81/2015)

    "On call" job contracts provide that an employee declares his/her availability to work over a certain period of time, during which he/she can be called in - even for a few days only - with short-term notice.

    The individual contract may provide that the employee is bound to work if called by the employer. In this case, in addition to the normal remuneration paid for the working activity currently carried out, the employee is eligible to an additional 20% of the wage set by the NCAs. This contract must be drafted in writing.

    Apprenticeship ("apprendistato", legislative decree no.81/2015)

    Apprenticeship is an open-end contract with a vocational training content.

    The employer can hire apprentices within certain quantitative thresholds depending on the number of emplo- yees hired and is required to ensure that the apprentice acquires professional skills and qualification.

    Staff supply contract ("contratto di somministrazione di lavoro")

    Temporary contracts, on fixed-term or open-end basis, can only be agreed with qualified employment agencies. Workers must benefit from the same legal and economic conditions available to employees of the user com- pany. Employers may not use staff supply contracts to replace workers on strike or to replace employees tem- porarily laid-off or involved in collective dismissals in the previous few months.

     

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