General principles
The main sources of employment law
The Italian legal framework is very structured, and several legal sources apply to employment relationships such as in order of priority: international treaties and European sources; the Italian Constitution; national (or, for certain aspects, regional or provincial) laws; regulations issued by the relevant authorities (such as the Labour Ministry or social security authorities); national, local or company labour agreements; employment agreements.
Collective bargaining in Italy
Trade unions have the primary role of negotiation of the CBA which sets terms and conditions of employment. Generally, two levels of collective bargaining may be identified. Specifically:
- The first level of collective bargaining generally includes the inter-industry collective agreements covering matters of general interest for all industries and NCBA of a given industry setting out key terms and conditions of employment applicable across the country.
- Within a given industry, the second level of collective bargaining generally includes collective agreements at the territorial level; and/or collective agreements at the company level, usually covering all the topics expressly delegated by law or NCBAs (e.g., working time, company welfare measures, production bonuses).
Given the above, there is a hierarchy between the two levels of collective bargaining: territorial and/or company-level agreements may not provide less favourable treatments for employees than those provided by the relevant NCBAs. Also, please note that under Italian law, NCBAs do not have erga omnes effect and companies are not required to apply one. However, reasons of social equity have induced the Italian case law to deem legally enforceable several provisions (i.e. salary issues) of NCBAs, irrespective of whether their employer belonged to the association which signed the relative contract.
National law and employees working for foreign companies
As a general rule, Italian labour law should apply to all employees working for foreign companies in Italy. Non-national employees, temporarily seconded from non-national employers to Italy, are entitled to the same terms and conditions of employment as national employees.
Trade unions
Employees are free to organize a trade union and carry out union activities. Trade unions having executed a collective agreement which is applied in a business unit employing more than 15 employees, may choose one of their representatives to represent them in that business unit. Such trade union representatives are granted with specific rights and protections to pursue union-related activities.
Hiring the employee
The employment agreement: open-ended term, or fixed-term employment
Under Italian law, open-ended employment agreements are the standard employment contract. Fixed-term employment is strictly regulated: a fixed-term contract can only be concluded for the performance of a precise and temporary task and cannot be used to fill duties that are related to the company’s regular business.
Working time, holidays, and rest periods
Under Italian law, the ordinary weekly working time of a full-time employee is 40 hours per week and includes any period during which the employee is at the disposal of the employer. Employees working overtime are generally entitled to be paid for overtime and/or to paid leave.
Under Italian law, employees are also entitled to: (i) rest breaks of no less than 10 minutes for every 6 worked hours; (ii) a daily rest period of 11 hours every 24 hours; (iii) a weekly rest period of 24 consecutive hours (on top of the 11-hours daily rest above) in every 7 days, normally on Sundays; (iv) 4 weeks of annual leave: 2 weeks of this leave should be enjoyed in the same year in which such days-off become due and 2 weeks can be carried over but must be taken in the following 18 months. The employer shall pay the employee in lieu of untaken holiday upon termination of the employment, no such payment being allowed during the employment.
Termination of the employment
Individual dismissal
The communication of the termination of the employment must be in writing and specific procedures shall be followed depending on the type of dismissal:
- istant dismissal
employees may be dismissed without any notice or paid in lieu of notice (after a disciplinary procedure has been carried out, however) because of a “just cause”, i.e. a reason of such seriousness that the employer is not in a position to continue the employment any longer, even on a temporary basis; or
- termination with prior notice
- for a justified subjective reason: a serious failure for the employee to fulfil the contractual obligations, which is not serious enough to amount to a “just cause” reason for dismissal in case of a material breach of the employment; or
- for a justified “objective reason”: a reason relating to the production activity, the organization of work and the regular functioning of the business.
Remedies for unlawful the termination
Italian law sets several remedies for unlawful dismissals depending on the reasons grounding the termination, employee’s qualification and date of hiring as well as the size of the employer.
- discriminatory dismissal
Italian law provides several cases in which the dismissal shall be considered null and void, such as, among others, dismissal grounded on discriminatory reasons (marriage, pregnancy, races) and/or in oral form. In the above cases, employees have the right to be reinstated, and the employer has also to pay an indemnity in lieu.
- unfair dismissal
The major consequences for unfair dismissal depend on the date of hiring (before or after 7 March 2015) and the size of the employer (more or less than 15 employees).
However, the most important difference lies in the right to be reinstated: if the dismissal is deemed unlawful, lacking of just cause or justified reason, the employee hired before 7 March 2015 could be entitled to be re-hired (or, alternatively, to pursue an indemnity depending on the employee’s length of service as well as on the employer’s size and type of business and the parties’ behaviour before the dismissal) more frequently than the employee hired before 7 March 2015. According to the provisions entered into force in 2015, the newly hired employees have the right to be reinstated as a residual remedy only, when it is directly proved that the “material fact” upon which the dismissal was based did not occur at all.
Collective dismissals
Companies employing more than 15 employees who intend to lay off 5 or more employees (working in the same business unit or provincial area) in 120 days because of “a reduction or transformation of business or labour”, should carry out an information and consultation procedure involving trade unions and labour authorities. Also in this case, the consequences of unlawful dismissal depend on the date of hiring (before or after 7 March 2015) and the size of the employer (more or less than 15 employees) as well as the employee’s length of service, type of business and the parties’ behaviour before the dismissal.
