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End-of-employment-1General 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

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

Specific-types-of-contracts-2Part-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

main-source-of-the-employment-law-2Basic rules regarding rights and obligations of employer-employee relationship in Italy can be found in the Constitution, the Civil Code ("Codice Civile") which includes a special section on employment matters, and the Workers' Statute ("Statuto dei Lavoratori"), i.e. Law no. 300/1970 as modified by subsequent legislation. Terms and conditions of employment are also fixed by national collective agreements ("NCAs", Contratti collettivi) signed periodically between the trade unions and the employers associations of the same industry. These collective bargaining contracts normally regulate the working conditions and establish the minimum wage and salary scales for each particular sector.

Employment-of-foreign-workers-1EU/EEA and Swiss nationals

According to the principle of free movement of persons, goods, services and capital, EU (European Union) and EEA (European Economic Area) nationals can be employed in Italy without any authorization by the Italian au- thorities.

Should an EU national choose to work in Italy for a period in excess of 3 months, he/she should apply for a so called "Stay card" ("Carta di Soggiorno"), which is normally issued by the local State Police office ("Questura") upon a simple request. This permit is renewable. Swiss citizens have the same right of entry, residence and ac- cess to work applicable as EU countries nationals.

Non EU/EEA nationals - the quota system

The admission of non-EU foreign workers is subject to a mechanism of quantitative selectivity based on quotas for new entries on a yearly basis.

They are meant to regulate the admission of third country nationals and their access to Italian labor market, by combining a purely quantitative selectivity with some elements of qualitative selectivity.

The determination of annual quotas of new inflows is established by the government, which sets the quota through a Prime Minister Decree (known as "Decreto Flussi"). The quota decree is published in the Official Jour- nal and starts some days after the implementation phase.

The whole implementation process of the quota system is basically made up of three main steps:
•authorization requests presented by employers to the Immigration Single Desk (ISD);
•visa request by prospective migrants in their country of origin;
•request and delivery of the stay permit for working purposes.

Authorization (nulla osta) request

Employers have to request authorization to hire a foreign worker living abroad to the ISD.

In the application file the applicant employer is expected to submit a so called "Stay contract" ("Contratto di soggiorno") in which she/he commits him/herself to guarantee adequate lodging for the requested worker and to fund travel costs for his/her repatriation in case of expulsion before the expiry of the contract.

In addition, the contract has to include the work contract's details that must comply with existing collective contracts for the specific sector/occupation in which the requested worker will be employed.

Once all the checks have been made by both Labor authority ("Direzione Territoriale del Lavoro") and local State Police office ("Questura"), the authorization ("nulla osta"), may be delivered to the applicant employer. The whole

start-of-employment-1Employment contracts are governed by the general rules set out in the Civil Code.

Given the existence of a large number of NCAs and their extensive use by the employers, employment agree- ments in Italy normally consist of simple hiring letters which refer to the items required by the law including, the identity of the parties, place of work, employment start date, trial period (if any), duration of the employment (in case of fixed-term employment) and enrollment, employee's duties) and to the provisions contained in the applicable NCAs.

Individual employment contracts also specify the employee's "category" as established by the Civil Code, under article 2095.

 There are four categories of employees:
•  executives ("Dirigenti");
•  middle managers ("Quadri");
•  white collar employees ("Impiegati");
•  blue collar employees ("Operai").

Despite the fact that national collective agreements normally define general principles that regulate the em- ployment relationship of Dirigenti, general and specific conditions are often negotiated through individual agree-ments. Quadri are defined as employees who, while not top executives, are continuously engaged in duties that contribute significantly to promoting the company’s growth and achieving its goals. According to a limited num- ber of collective agreements, employers are required to insure quadri against claims for civil liability brought by third parties as a result of negligence in their duties.

At the start of the employment relationship, the employer must inform the employee of the main terms and conditions of his/her contract.

Italian law does not prescribe any particular form for employment contracts generally; they may be communi- cated orally, although most contracts are evidenced in writing. That said, some specific provisions as well as specific information concerning the employment relationship are required by law to be written down (for exam- ple: trial period, non-compete clause, fixed-term, if any). Also, certain types of contracts are required by law to be in writing (for example: part-time contracts).

Employment contracts can be made in any language, provided that both parties are able to fully understand the content of any provision therein.

The age of majority is 18 years old in Italy. The minimum age required for validly entering into an employment relationship is 16 years old with the parents' consent (15 years old for apprenticeships contracts).

 

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