Fornero labour reform at a glance - International Law Office

Dismissal
Social safety valves
Flexible working

Recent reforms spearheaded by Labour Minister Elsa Fornero have introduced important changes regarding dismissal, so-called 'social safety valves' and flexible working.

Dismissal

Regarding dismissal, the following changes have been introduced:

• a mandatory 180-day term within which to appeal the dismissal in court; and
• a mandatory out-of-court settlement procedure before the provincial conciliation commission(1) in the event of dismissal for objective justified reason in companies with more than 15 employees. Under this procedure, the employer notifies the provincial department of labour, which will then convene a meeting between the employer and the employee within seven days of receipt of the notification. The procedure will last no longer than 20 days and the dismissal will be effective from the beginning of the procedure.

Unfair dismissals
The consequences for unfair dismissal under Article 18 of Law 300/1970 have been revised as follows:

• Discriminatory dismissal – the employer must reinstate the employee, who must be paid the accrued amount from the date of dismissal to the date of effective reinstatement (the amount must be no less than five months' salary).
• Dismissal for subjective justified reason or just cause – if the reason given for dismissal is unsubstantiated or if the national collective labour agreement or the disciplinary code provides for a lesser penalty, the employer must reinstate the employee, who must be paid an amount of up to 12 months' salary. In all other cases, the employee will be paid an amount of between 12 months' and 24 months' salary.
• Errors in procedure or grounds for dismissal – the employee must be paid an amount of between six months' and 12 months' salary.
• Dismissal for objective justified reason – if the reason given for dismissal is unsubstantiated, the employer must reinstate the employee, who must be paid an amount of up to 12 months' salary. In all other cases, the employee must be paid an amount of between 12 months' and 24 months' salary.

If an employee is dismissed for exceeding the protected period, the employer must reinstate the employee, who must be paid an amount of up to 12 months' salary.

The employer may revoke a dismissal within 15 days of being notified that the employee has chosen to appeal his or her dismissal. In this case, the employment relationship will continue without interruption and the employee will be paid the accrued amount from the dismissal date to the effective reinstatement date.

Resignation
In order to avoid the illegal practice of forcing new hires to sign a blank and undated resignation letter at the same time that the working contract is signed,(2) the following confirmation procedures have been introduced:

• If a female employee resigns during pregnancy or if a male or female employee resigns within three months of his or her child's birth, the resignation must be confirmed by the Ministry of Employment and Social Policy - this also applies to adopted or foster children.
• In all other cases, the local labour directorate or employment centre (or another entity identified under the relevant national collective labour agreement) must confirm the employee's resignation; otherwise, the employee must confirm his or her resignation in a signed statement in compliance with a specific procedure.

Special procedure
A mandatory special procedure has been introduced in relation to dismissal cases under Article 18 of the law. The procedure includes:

• a preliminary phase before the court within 40 days of the claim;
• a summary investigation;
• an opposition judgment in compliance with Article 414 of the Code of Civil Procedure; and
• the right to appeal to the relevant court of appeal.

The procedure must be concluded within the year.

Redundancy
If an employer makes an employee redundant and fails to present the required notification in writing or comply with the selection criteria, the employer must reinstate the employee, who is entitled to damages in accordance with Article 18 of the law. If the employer violates procedural requirements, the employee is entitled to an amount of between 12 months' and 24 months' salary.

Social safety valves

The reform introduces employment social benefit for unemployed individuals who have accrued at least two years of social insurance benefits and contributed to the programme for at least one year in the two-year period before becoming unemployed. This programme will come into force in 2016.

The Wage Guarantee Fund has been extended to commercial and supervisory companies with more than 50 employees, as well as to airlines and airport system companies.

Flexible working

Fixed-term employment agreements may be established with no reason given for the contract term not exceeding 12 months, or if the national collective labour agreement so provides; however, the use of such agreements is limited to no more than 6% of the total workforce during specific organisational processes.

The minimum period between consecutive temporary employment contracts has been extended to 60 days, if the agreement is for less than six months, and 90 days for longer contracts. Moreover, if the employment relationship continues after the expiry of the fixed-term contract, the agreement may be extended to 30 or 50 days, depending on the duration of the contract.

If the fixed term of an employment agreement is void, the employee has 120 days in which to challenge it through out-of-court procedures and 180 days in which to challenge it in court.

The redress provided by Article 32 of Law 183/10 is deemed to satisfy an employee's claim in respect of the period from the expiry of the term to the court's ruling.

Apprenticeships
The preferred way for young people to enter the workforce is through apprenticeships. The minimum term will be six months; the ratio of apprentices to skilled employees will be three to two for companies with more than 10 employees and one to one for companies with fewer than 10 employees. New apprentices may be hired only if 50% of the apprentices already employed by the company have been taken on (30% for the first three years of a company's operations); otherwise, the apprentices will be deemed to be employees on fixed-term contracts. This does not apply to companies with fewer than 10 employees.

Insertion contract
The reform abolishes the insertion contract - a form of standard first employment contract.

Joint ventures
In joint ventures (associazione in partecipazione),(3) the number of partners cannot exceed three if a partner's contribution includes work performance. This is regardless of the number of partners, except where partners are married or related within the third degree (or second degree if they are related by marriage). If the arrangement does not comply with this rule, the partner will be deemed to be an employee on an open-ended contract, as will partners who do not share in the profits or are not entitled to receive the report.

Project contracts
The use of project contracts is subject to the following conditions:

• The aim and substance of the project must be defined and it must have a specific and limited objective, rather than merely the continuation of the employer's core business.
• No executive or repetitive work may be performed; otherwise, such work will be deemed to be perfomed under an open-ended contract.
• An employment relationship will be deemed to exist if the contract worker's work is similar to that of other employees, with the exception of highly skilled professional work as specified by a national collective labour agreement.
• Compensation may not be below the level stipulated for a similar job in the relevant national collective labour agreement .

Independent workers and contract limitations
For so-called 'partita IVA' contracts, whereby a notionally independent worker performs most of his or her work for the same company, collaboration will be presumed to be coordinated and continuous if at least two of the following criteria are met:

• The collaboration lasts longer than eight months.
• The compensation constitutes more than the 80% of the compensation collected by the collaborator in a year.
• The collaborator has a regular desk or assigned working space with the client.

This presumption does not apply to work that requires high-quality performance or specialised technical or practical skills (if the annual earned income is more than €18,666), or to freelance work admitted to a specific register.

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

Endnotes

(1) See Article 410 of the Code of Civil Procedure.

(2) Unscrupulous employers often use such letters as an alternative to dismissal in the event of an employee's pregnancy, illness or in similar circumstances.

(3) This is a legal transaction whereby one party gives another the right to share in the profits of the business in return for a contribution. The contribution may be capital in nature or entail work performance (or both). See Articles 2549 et seq of the Civil Code.