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ITALY: An Introduction

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General legal framework of Italian employment law 

1. Italian labour market Over the last two decades, the Italian labour market has been subject to significant reforms in its legal framework. As a result, the Italian legal system is now balanced and can adequately respond to the dynamism required of enterprises to compete in international markets. For example, the COVID-19 pandemic entailed an acceleration towards new agile working modalities, also facilitated by the specific law provision approved in 2017. Indeed, a complete dissociation between the employer’s site and the employee's place of work has been very rapidly and effectively implemented and is considered ordinary practice.

Last but not least, the Law no. 234 of December 30, 2021, entitled "Budget of the State for the financial year 2022 and multi-year budget for the three-year period 2022-2024" (hereinafter, "Budget Law 2022") has provided, among other things, for important innovations in terms of social shock absorbers and collective redundancy that are tailored to allow corporations to face a transition that has already begun due to the decarbonization and digital transformation trends in place.

2. Agile working 

The definition of agile working (or remote working) is set out in Law no. 81/2017, which, for the first time, provided a well-defined legal regulation.

Agile working is a way of performing the employment relationship either at the company’s premises or anywhere outside the office, in order to allow employers to engage talent and enable the employees to balance their work and lifestyle.

The implementation of agile working requires a written agreement governing:
• The duration of the agreement;
• The work discipline outside the company’s premises (i.e., technological tools used by the employee);
• The employee's right to disconnection;
• The right to control and disciplinary power by the employer.

Regarding the employee's right to disconnection, Law no. 81/2017 provides that the agile working agreement entered into between employer and employee shall identify the “technical and organisational measures necessary to ensure the worker’s disconnection”. In particular, it is necessary to establish in the agreement the worker’s right to disconnect for certain periods of time, normally corresponding to the minimum daily and weekly rest and holidays. This includes not responding to emails, messages and phone calls, nor accessing the company’s information system and even switching off work devices.

Furthermore, the employer must recognise the right of the remote workers to disconnect without disciplinary sanctions or loss of pay and must also monitor the implementation of this right.

3. Social shock absorbers system 

The Italian labour law framework provides for special public funds aimed at protecting employees’ income and to relieve employers from personnel costs, when specific events or conditions requiring a suspension of work occur.

In particular, Legislative Decree no. 148/2015 provides for the following general public schemes: (i) the ordinary wage guarantee fund (“Cassa Integrazione Guadagni Ordinaria” or “CIGO”) and (ii) the extraordinary wage guarantee fund (“Cassa Integrazione Guadagni Straordinaria”or “CIGS”).

With the Budget Law 2022, starting from January 1st, 2022, several changes have been introduced regarding the above social shock absorbers system, summarised as below:
•The social shock absorbers system is extended to (i) all employees (including homeworkers and apprentices) and (ii) employees with a minimum length of service of 30 days;
• CIGO is extended to companies that are not currently covered by this measure or that do not adhere to the bilateral solidarity funds through the FIS;
• CIGS is extended to all employers with more than 15 employees who do not have access to solidarity funds. For employees already in CIGS for reasons of (i) company reorganization and (ii) company distress, an additional period of a total of 12 months of additional treatment is provided.
• During the consultation procedure with the Trade Union, the employer will have to define a re-employment and self-employment plan for the employees in order not to trigger the forfeiture of the benefit.

Furthermore, as of January 1st, 2025, a reduced additional contribution is established for employers who have not benefited from subsidies for the previous 24 months.

Finally, companies that hire on open-term basis an employee who is receiving a contribution from the CIGS fund will receive an economic advance equal to a monthly contribution of 50% of the CIGS amount, for each month’s salary paid to the same employee, for up to 12 months.

4. Collective Redundancies 

Pursuant to Law no. 223/1991, a compulsory unions consultation procedure (the “Procedure”) must be followed whenever a company employing more than 15 employees intends to implement the dismissal of at least five employees in the same business unit, within a period of 120 days, due to a reduction, reorganization or shut down of the company’s business.

The Procedure begins with the employer submitting a written notice to the internal works councils (if any) and to the trade unions to inform them of its intention to carry out a collective dismissal. The Procedure shall have a maximum duration of 75 days.

Regardless of whether an agreement with the Unions has been reached, at the end of the Procedure the employer can dismiss the redundant employees.

Furthermore, in the event of a failure to reach an agreement with the trade unions, the Redundancy Ticket – that should be paid by the employer in case of dismissals – is three times higher.

That being said, Budget Law 2022 introduced new obligations for companies staffed with more than 250 employees (to be calculated as the average of the previous year, including apprentices and managers), which intend to shut down a headquarter, factory, branch, office or autonomous department located in Italy implying the dismissal of at least 50 employees.

In particular, the employer is required to communicate in writing the start of the Procedure to trade unions, the regions concerned, the Ministry of Labour, the Ministry of Economic Development and ANPAL at least 90 days in advance. Dismissals triggered before the expiry of the 90 days are null and void.

Within the next 60 days following the communication, the employer must submit a plan (the duration of which shall not exceed 12 months) entailing the measures aimed at containing the occupational and economic consequences arising from the shutdown. Within 30 days of its submission the plan must be discussed with trade unions, the regions concerned, the Ministry of Labour, the Ministry of Economic Development and ANPAL. If an agreement is reached with these entities, the plan is undersigned and it becomes binding on the employer.

Should the employer not comply with this Procedure, it is required to pay the Redundancy Ticket at the triple rate, increased by 100%.

On the other hand, if a union agreement is not reached, the employer will be required to pay the Redundancy Ticket at the triple rate increased by 50%.

5. Employer’s data protection requirements

The main European legislation on the protection of personal data is the General Data Protection Regulation (UE) 2016/679 (the “GDPR”).

As far as employment relationships are concerned, Art. 88 of the GDPR provides that each Member State may lay down specific rules by law and NCBA(s) to ensure the protection of the rights and freedoms regarding the processing of employees' personal data. This is because monitoring activities must take place in a context of transparency and adequate protection of personal data at all stages of the employment relationship.

Art. 4 of the Workers' Statute, according to which the employer may carry out checks and use the information collected for all purposes related to the employment relationship (including disciplinary action), provides that adequate information has been given to the employee on how to use the tools themselves and how to carry out the checks. In this context, it is appropriate to adopt a specific policy in compliance with privacy legislation and the Guidelines on the Internet and e-mails issued by the Italian Data Protection Authority in 2007, under penalty of non-use of any data collected.

However, employees’ personal data must be protected “from the design” of the processing (privacy by design) and “by default” (privacy by default), in compliance with the “accountability” principle, adopting measures to ensure their protection and confidentiality and drawing up an impact assessment if necessary.

Lastly, please note that the employees who carry out processing operations in relation to their duties must be specifically appointed by the employers pursuant to Art. 29 of the GDPR and 2-quaterdecies of Legislative Decree 101/2018 and must be specifically instructed and adequately trained.