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Employment relationship

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employment-relationshipFormal fulfillment

At the establishment of any employment relationship, the employer must notify the competent public employ- ment service ("Centro per l'Impiego") at least 24 hours prior to commencement. This notification also fulfills the obligation to notify the relevant social security institutions (i.e. INPS and INAIL).
If provided for by law, an employer must also stipulate insurance policies against risks and damage suffered by third parties caused by employees fulfilling their employment duties.

Trial period

The statutory trial periods are the following:
3 months, for employees not assigned to managing functions;
6 months, for all other employees.

However, the probation period is commonly set in the relevant NCAs depending on the category of the employ During the trial period, either party may freely terminate the working relationship at any time, without any notice, obligation or payment of the relevant indemnity in lieu.

Pay

Italian law does not give a statutory definition of "wages" and "salary".

For income tax and social security purposes, any compensation granted to the employee within the scope of the employment relationship, including compensation in kind, is considered wages (this does not include a few limited exceptions, such as expenses reimbursement).

There is no statutory minimum wage in Italy. Minimum wages for each contractual level are usually set out by sector in the relevant national collective agreements (NCAs). A minimum wage is being introduced for workers not currently covered by NCAs, although they account for less than 3% of the total workforce.

There are no statutory bonuses. NCAs may provide for some such as the collective performance bonus ("premi di risultato") or individual performance bonuses. There are no statutory allowances, although NCAs provide for transportation allowances or indemnities for certain working arrangements such as on-call work.

Under Italian law, compensation is granted in thirteen (13) monthly installments. The additional 13th installment ("tredicesima") is paid out each year along with the December salary.
Some NCAs provide for a 14th monthly installment, normally paid in June.

The NCAs also normally set the payment date and the calculation basis of the contractual items (e.g. notice period, compensation during illness).
Employers frequently grant certain employees with fringe benefits (for example: a company car and mobile phone to top/middle management and sales positions, luncheon vouchers and internal or external training and education). Employers are required to fund severance payments for all employees ("Trattamento di Fine Rap- porto - TFR"), amounting to 1/13.5 of the annual overall compensation, payable on termination of employment for any reason.

Working hours

Executives are not subject to the rules governing working hours. Some NCAs provide for a working week of less than 40 hours. Employees must be granted at least one weekly rest day (normally Sunday).

Exceptional and temporary business activities may need employees working on weekly rest days or legal holi- days.

Overtime work is considered to be the hours worked exceeding the 40 hours per week and may not exceed 8 hours on a weekly basis and 250 hours on a yearly basis. NCAs set specific additional rates to be applied over- time work and can also replace overpay with additional rest days.

Holidays and vacations

A local saint's day (variable on the local tradition of each city) is also considered a public holiday for the relevant territory.

Public holidays that fall on the weekend do not entitle absence from work on the nearest weekday, but emplo- yees are entitled to their normal pay.

Statutory annual vacations amount to 4 weeks.

The employer normally decides when workers can take vacation based on company and production interests and taking into account (where possible) employees' needs. NCAs normally provide for, in addition to the sta- tutory minimum, a further period of paid vacation that it is increased with seniority service.

The law states that at least two weeks have to be taken in the same year. Up to two weeks of unused vacation may be postponed, but it must be taken within 18 months following the accrual year.

Employees are entitled to pay in lieu of unused vacation upon employment termination.

Sick leave

Employees are entitled to 3 days of paid sick leave charged to the employer.

Pay replacement benefits are provided by social security institute from the 4th day of illness to the 180th day. Certain NCAs require employers to top up social security benefits to 100% of salary.

During sickness, the contract is suspended and the employees' seniority is protected. Employees cannot be di- smissed before the end of a minimum period prescribed by the applicable collective agreement. After that pe- riod, an employer may terminate the contract.

Maternity leave
Pregnant female employees are entitled to 5 months' maternity leave, from the second month prior to the due date to the third month after birth.

The last 3 months can be extended to 7 months in specific cases.

Pay replacement benefits are provided by social security. Any work that might be considered harmful is forbid- den during pregnancy.

During maternity leave the employment is suspended and seniority is protected.

Other leaves

There are other leaves provided for by law, for example: adoption leave, paternity leave, parental leave and short- term leaves, such as wedding leave or leave linked to public and jury duties, family circumstances or educa- tion.

Contract amendments

The parties cannot modify the individual contract terms and conditions, unless the relevant amendments pro- vide for a more favorable treatment of the employee. The Jobs Act has amended the provision regarding the change of an employee’s task and duties. Unless agreed otherwise with employers, employees are entitled to maintain their salary - with the exception of task-related indemnities - even if their tasks are reduced.

Non-competition clause

According to Article 2125 of the Civil Code, written non-compete covenants are allowed provided that:

•adequate compensation is granted to the employee;
•duration of the agreement does not exceed 3 years for normal employees and 5 years for executives; and
•it is circumscribed from a business and territorial standpoint.

Italian law does not provide specific criteria with regard to identifying adequate compensation and the scope of activity or territory.

Therefore, in case of disputes, such criteria are determined by the Court on a case by case basis.

Teleworking

Teleworking must be voluntarily agreed with the employee. Teleworkers are entitled to the same rights as em- ployees performing the same tasks and duties at the company's premises, including with respect to training and career opportunities.

The general regulatory framework concerning employees working from home can mostly be found in several NCAs. More specific rules may be agreed at local and/or company level.

Smart working

Smart working is considered as “a way of implementing an employment relationship” carried out in part at the premises of the company and partly at a different location, without a fixed workplace, but within a maximum duration limit of the daily and weekly work hours established by law and the collective bargaining agreement. Such a way of implementing the employment relationship must be established by written agreement between the parties, also through organization by phases, cycles and objectives, with the possible use of technological means to carry out the work activity.

Temporary lay-off

In the event of a temporary crisis, the employer may use the "redundancy fund" ("Cassa Integrazione Guadagni", CIG) which is a collective suspension from work of the blue and/or white collar employees, allowing the latter to continue receiving up to 80% of the normal wage charged on a special fund held by the social security insti- tute.

COMPULSORY HIRING OF DISABLED WORKERS

Companies in breach of these obligations are subject to administrative sanctions. In order to encourage the compliance, employers can enter into conventions with the competent authorities for the hiring of disabled workers. Companies that are experiencing financial or business difficulties can apply for a temporary suspen- sion of this obligation.

Companies staffed with more than 35 employees which, due to the nature of their business (e.g. dangerous and strenuous works), cannot fulfill their quota may be eligible for a partial exemption from this obligation.

 

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