Employment

Employment Law

How We Can Help You

Our employment law practice involves representing and advising both businesses and individuals. We assist our clients in all their employment related matters, including:

Termination of the employment relationship, as well as the appeal against these;

– Drafting and reviewing of all types of employment contracts and agreements concerning the establishment, performance and termination of the employment relationship;

– Disputes relating to the qualification of the employee: workplace bullying and harassment, demotion, discrimination based on age, sex, race, gender reassignment, disability, pregnancy, religion or belief, sexual orientation, national origin;

 Employment compensation and bonuses, exit strategies and settlement agreements; 

 Disciplinary proceedings regarding the formulation of objections and the imposition of penalties, as well as the appeal against these;

 Litigation in the employment tribunal and other Italian courts;

 From an international perspective, we handle secondments and cross-border mergers, acquisitions and transfers.

The employment law is a very broad branch of law which deals with every aspect relating to the employment relationship so if you need legal assistance and therefore to consult an Italian employment lawyer, do not hesitate to contact us.

Termination of the Employment Relationship

Unilateral Termination

The employment relationship, whether it is permanent or fixed-term, can be terminated for a number of reasons provided for by the law.

The two main and best-known ones are the resignations, that is when the employee chooses to terminate the relationship, and the dismissal, in case of withdrawal of the employer.

In both cases, we speak of unilateral termination since there is no need of the other party’s consent. It must be distinguished from consensual resolution, which is when the parties terminate the contract by mutual agreement.

Resignation (Dimissioni)

The resignation is the unilateral act by which the employee informs the employer that they do not intend to carry on with the employment relationship anymore.

As of March 12th, 2016 the resignation must be submitted online using a form specifically made available on the Italian Ministry of Labour and Social Policies’ website. The form can be filled out by the employee personally or by the so-called “qualified subjects” (e.g. patronage, trade union organisation, bilateral body) which act on behalf of the worker. The procedure does not require any intervention by the employer, who will only take note of the resignation.

The law does not require the resignation to be supported by particular justifications; therefore, the decision of the worker to resign cannot be objected by the employer. Nonetheless, to counterbalance the latter’s position, the resignation must be submitted at adequate notice. In other words, the employee is not allowed to terminate the employment relationship with immediate effect unless there are particular reasons.

The notice period is established by each Collective Labour Agreements and varies according to the employee’s classification and length of service. The reason underlying this is that the employer needs enough time to find a new employee who is able to perform the tasks previously entrusted to the resigning worker hence has a similar professional experience and qualities.

If no notice is given, the resigning employee shall pay the employer an economic allowance in lieu of it as compensation and the employment relationship shall terminate immediately.

The notice, however, is not always due. Indeed, if the employer behaves in a way that undermines the professional relationship with the employee, the latter is allowed to resign with immediate effect. Think of when the employer subjects the worker to humiliating treatment, discrimination or mobbing; it would be inconceivable that the relationship continues any longer. In all these cases, we speak of resignation for just cause and it is intended to sanction very serious violations committed by the employer who therefore can no longer benefit from a period of time to organise the replacement.

Dismissal (Licenziamento)

The term “dismissal” refers to the unilateral act by which the employer terminates the relationship with the employee.

The Italian legal system provides for different types of dismissal, depending on whether it is immediate or, on the contrary, a notice period is due:

– dismissal for a just cause;
– dismissal for a justifiable reason, which is in turn distinguished into subjective and objective.

Dismissal for Just Cause (Licenziamento per Giusta Causa)

According to Article 2119 of the Italian Civil Code, “just cause” is defined as the reason which prevents the employment relationship from continuing, not even on a provisional basis. In other words, the dismissal for just cause is legitimate whenever the employee has committed something that irreparably breaks the relationship of trust with the employer, who is therefore allowed to terminate the contract with immediate effect. 

Each Collective Labour Agreement mentions specific situations in which the dismissal for just cause lawful, but the list is only indicative since even in cases which are not expressly covered, the employer may proceed with the dismissal as long as the extreme seriousness of the fact is proved. Examples of such conducts are: the misappropriation or misuse of valuable business assets, unjustified absence for several days, if this causes great harm to the company’s organisation, falsification of medical certificates, criminal offence, even if committed in private life if that damages the company’s image. 

Dismissal for Justifiable Subjective or Objective Reason (Licenziamento per Giustificato Motivo Soggettivo o Oggettivo)

The Italian legal system distinguishes between dismissal for justifiable subjective reason and dismissal for a justifiable objective reason. The former has its grounds in a non-fulfilment of the contractual obligations the employee is subject to, whereas the latter occurs when the company, for reasons inherent to the production activity or its proper functioning, needs to implement a corporate reorganisation. 

Despite being very similar to the one for just cause, the dismissal for justifiable subjective reason concern conducts of the employee which are much less serious, such as unjustified absence, if this does not harm the company’s organisation; breach of the obligation of correctness and loyalty; poor performance, if attributable to the negligence of the worker. Before proceeding with the dismissal, the employee must be addressed a disciplinary complaint. Disciplinary complaints are intended to punish the employee for their unlawful conduct. Therefore, the purpose of the complaint is to initiate proceedings to establish the offence and the subsequent application of the disciplinary sanction, which, in the most serious cases is the dismissal. The complaint must be sufficiently specific, indicating the specific conduct contested and its spatial and temporal location. A complaint that came a long time after the violation would be illegitimate. Within five days of receiving the complaint, the employee may submit a written statement of defence and clarify their position. In this document, they may request to be heard orally. The employer who has received the employee’s defence before the 5 days cannot take the decision before the fifth day; the employee may also submit additions. The employer, having heard the employee’s defence, adopts the definitive measure by which they decide to punish the employee and indicate the sanction adopted. The measure must be communicated – also in this case promptly – to the employee by registered letter with return receipt or letter by hand.

In contrast, the dismissal for justifiable objective reason has nothing to do with the employee’s conduct; rather, it concerns the enterprise reality in which the worker is inserted and that may be affected by events requiring a corporate reorganisation. Think about the case in which the company has to face a deep crisis due to which is forced to reduce its operational areas by divesting departments which have become too expensive; or if the company intends to improve its production efficiency by reducing management costs and optimising the resources. It has to be noted, though, that in order to proceed with the dismissal, it is not enough that the employer decides to implement a corporate reorganisation, whatever may be the reason; the dismissed employer must be no longer useful within the company otherwise the employer has the obligation to redeploy the worker (i.e. the repechage). So the dismissal for justifiable objective reason is based on two assumptions: the employer’s decision to reorganise production and the impossibility of reusing the dismissed worker by relocating him elsewhere. The worker cannot challenge the choice of the employer per se, however, he can challenge the employer for not deploying. 

As opposed to the dismissal for just cause, the dismissal for justifiable reason, whether subjective or objective, requires a period of notice to be given by the employer. In any case, the employee must be informed in writing. 

How to Object an Unfair Dismissal

The law regulates the ways in which an employee who is dismissed without any justification can appeal against unlawful dismissal, including sanctions against the employer.

If the dismissal is unfair, the employee must contest it within 60 days. This time limit for is calculated:

– from the moment the employee receives the notice of dismissal (if the notice also contains the reasons for the employer’s decision);

– from the moment the worker receives the notification of the grounds for dismissal (if these grounds were not given at the time of dismissal). 

Within the sixty-day period, in other words, the worker must send the employer a communication (in whatever form, even a simple registered letter) informing him that he intends to contest the dismissal. In the following 180 days the worker must:

– file the appeal in the court registry and appeal against the dismissal before the judge; 

– notify the employer of a request for an attempt at conciliation with the Provincial Labour Office or a request for arbitration.

If this deadline is not met, an appeal against the dismissal cannot be considered by the Judge and is considered ineffective. If, on the other hand, conciliation or arbitration is requested and the employer refuses them or, even though they have been accepted, an agreement cannot be reached, the employee must file the appeal with the court registry within 60 days. 

Consensual Resolution (Risoluzione Consensuale del Rapporto di Lavoro)

In addition to the resignation and the dismissal, there is a third way to terminate an employment relationship which is based on a mutual agreement between the employer and the employee, namely the consensual resolution.

Until March 12th, 2016 employers and employee who intended to terminate the working contract mutually were not subject to any particular obligation, with the only exception of notifying the termination within 5 days after the last day. Today, pursuant to Decree No. 15/2015 (i.e. the “Jobs Act”), the willingness to terminate the employment relationship must be formalised online by filling out the form specifically made available on the Italian Ministry of Labour and Social Policies’ website.

When it comes to consensual resolution, the parties are free to define any aspect related to the termination of the employment relationship in their agreement.

Read below a brief summary of the main reforms which have taken place lately.

Decreto Dignità

Decree n. 87/2018, the so-called “Decreto dignità”, is the more recent ruling on employment law. It has introduced numerous changes which have affected both companies and self-employees:

Fixed-term contracts must be justified if concluded for more than 12 months. An employment relationship on a fixed-term basis may exceed that duration only if:

– There are temporary and objective needs, unrelated to the ordinary business;

– There are substitutive needs;

– There are needs related to temporary, significant and unforeseeable increases of ordinary business.

If no such reasons exist, then the fixed-term contract automatically turns into a permanent one. In any case, fixed-term contracts may last up to 24 months.

Companies which hire under 35 age people are provided with financial bonuses.

The economic allowance which dismissed employees are guaranteed by has been increased. The monthly salary to be paid now ranges from a minimun of 2 to a maximum of 27 in case of unlawful dismissal.

Severe penalties apply to companies which move their Italian headquarters abroad to reduce the costs of labour and trade union rights.

Jobs Act

The so-called “Jobs Act” (2014), along with ist implementing decrees, has brought in a range of measures to reform the system of social security benefits, job services, active policies and, more generally, the rules of employment relationships.

The main aims the Jobs act has pursued are:

To encourage companies to hire their employees on an open-ended basis

The permanent contract has finally become the preferred form of employment. Facilities have been provided for companies which take on permanent contracts.

To better protect employees from unlawful dismissal

New, clearer and more certain rules have been introduced in the event of unlawful dismissals. Full reintegration is now prescribed in case of discriminatory or clearly instrumental behaviour by the employer. Employees are also guaranteed by an economic allowance commensurate with their seniority. Judicial disputes are prevented by means of a new model of conciliation.

To support those who are looking for a job by strenghtening the network of Employment Centres

Targeted paths are provided in order to promote the entering and re-entering into the job market. People who are looking for a job may have access to guidance, support and training activities.

To reconcile work-life balance

New measures have been introduced with regard to the enhancement of parental experience and, in particular, to the protection of motherhood.

To help companies find new and more efficient ways of business organization

Less strict working hours and the so called smart working are some of the solutions put into practice in order to reconcile the personal need of employees with the productive needs of companies.

To support those who have lost their job

Greater social equity applies to people who are unemployed through the introduction of income support tools.

To ease the system of rules relating to the employment relationships

The number of types of employment contracts has been reduced. Communications towards the Public Administration have been digitized and bureaucracy reduced, allowing both companies and citizens to interact with institutions in a faster and more effective way.

Monti – Fornero Reform

The so-called “Monti-Fornero” Reform (2012) has represented a much-debated legislative action, strongly prompted by the main European and international financial institutions in response to the fragile political balance and to the dramatic economic situation which afflicted Italy at that time.

The major and most controversial intervention has concerned the pension system. In particular, it has put into practice the transition from a retributive system to a contributive one. In other words, pensions have no longer been calculated on the basis of how many years the worker has been employed but on the contributions paid during those years.

Furthermore, the retirement age has been raised, being adjusted proportionally to life expectancy (in 2019 it has been fixed at 67 years).

More generally, the reform aimed at making the job market more flexible and dynamic, encouraging the youth employment and offering new opportunities to unemployed people.

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