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Business branch leases and hiring of employees - International Law Office

International Law Office

Employment & Benefits - Italy

Business branch leases and hiring of employees

September 28 2011


The Supreme Court has recently confirmed the opinion of previous court decisions that employers which hire full-time employees out of redundancy are not eligible for financial aid under Article 8 of Law 223/1991 if the new employer is a transferee in the case of a business branch lease. According to Italian law, the applicable rules are the same as those for transfers of undertakings.(1)

In the case in question, the court disapplied a financial benefit equal to 50% of the mobility allowance, which is generally granted to employers that hire employees from so-called 'workers' mobility' lists in redundancy procedures. During the trade union consultation procedure, as prescribed by Article 47 of Law 428/1990, the transferee had signed a collective agreement whereby it committed itself to hiring the transferor's employees who had been subject to a redundancy procedure.

The logic of the decision is persuasive as, according to the law (and in view of the economic advantage that is deemed to be conferred by Article 8 of Law 223/1991), the transferee in any business transfer (including a transfer involving a business branch lease) is already legally required to hire the transferor's employees.(2) Therefore, granting a benefit for doing so would constitute an unfair advantage.

For further information on this topic please contact Andrea Stanchi at Stanchi Studio Legale by telephone (+39 02 546 9522), fax (+39 02 551 91641) or email (a.stanchi@stanchilaw.it).

Endnotes

(1) See the EU Acquired Rights Directive (2001/23/EC) and Article 2112 of the Civil Code.

(2) Article 2112 of the code.


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