ITALY: An Introduction

The Italian Labour Market 

Throughout 2022, the Italian labour market was subject to significant reforms of the relevant legal framework.

Most of the new rules concerned implementing the important innovations provided for by various EU directives, which Italian companies and foreign companies operating in the Italian market alike must face. By way of example, Legislative Decree No 104/2022 (the “Transparency Decree”) transposed into Italian law the provisions contained in EU Directive No 2019/1152 on clear and predictable working conditions for European employees. As shall be discussed later, this decree broadened the scope of the mandatory information that the employer must provide to employees with regard to the employment relationship. New rules have also come into force aimed at implementing EU directives on promoting equal opportunities at the workplace and regulating whistleblowing procedures.

Within the framework of the Italian civil litigation reform, new regulations have been introduced by Legislative Decree No 149/2022 that aim to incentivise the use of ADR in employment disputes. Parties to an employment relationship will have the opportunity to settle employment disputes out of court, with the assistance of lawyers but without the need for the responsible employment bodies to oversee the execution of settlement agreement.

Another major change included in the reform of Italian civil proceedings is the repeal of the “Fornero” procedure – as of 28 February 2023 – in the hope of enhancing the speed and efficiency of judicial protection. Indeed, the current legal framework provides for a “dual-track system” when it comes to the dismissal of employees hired before 7 March 2015 who work for companies with more than 15 staff. This two-phase procedure has been dropped as part of the reform and, therefore, challenges of dismissals will be treated per the ordinary employment procedure.

Transparency decree 

The above-mentioned Transparency Decree was published in the Italian Official Gazette on 29 July 2022 and entered into force on 13 August 2022. The decree has expanded the scope of the information on the employment relationship that the employer must provide to employees recruited after 12 August 2022 beyond that already required by the relevant legislation in force (Legislative Decree No 152/1997). The new rules also apply to employees recruited before 13 August 2022, albeit only if explicitly required by them.

Specifically, along with the “ordinary” details of the employment relationship (eg, the identities of the parties, the place of work, the duration of the agreement, and remuneration) already contained within employment contracts used by companies until now, the employee must provide employees with additional mandatory information such as:

  - the right of the employee to receive training (if any);

  - length of holidays and other paid leave;

  - procedure, form and terms of notice in case of dismissal or resignation;

  - constituent elements of remuneration/compensation;

  - period and method of payment;

  - overtime work and its remuneration;

  - collective agreements (including company agreements) applied and signatory parties; and

  - entities and institutions to whom the employer must pay social security and insurance contributions.

Unlike in the past, it will no longer be possible to include within the contract a simple reference to the applicable law or national collective bargaining agreements. Instead, a detailed list of information will be required.

To comply with the aforementioned obligations, the employer should either (i) provide the employees with such additional mandatory information in their employment contract or (ii) provide the employees with such additional mandatory information via a separate written document to be delivered to the employees within seven days of the starting date of their employment relationship.

The Transparency Decree provides that some of the mandatory information could be provided to the employees within 30 days of the starting date of their employment relationship, including: (i) the right of the employee to receive training (if any); (ii) the length of holidays and paid leave; (iii) the dismissal and resignation procedure, the manner in which notice is to be delivered and terms of notice; (iv) the collective agreements applied; and (v) the entities and institutions receiving social security and insurance contributions from the employer. In the event of non-compliance with the above provisions, the employer could be subject to administrative fines.  

Gender equality 

Italian law has developed a wide range of legislation to promote equality and equal opportunities and fight discrimination, thereby expanding the detail of provisions already in place and protections already recommended in the EU Charter of Fundamental Rights.

Legislative Act No 162/2021 amended and integrated the Italian Equal Opportunities Code enacted in 2006. According to the amended Equal Opportunities Code, public and private companies are generally required to draft a report every two years providing gender data on personnel in each of the professions and in relation to the state of recruitment, training opportunities, career progress and promotions, employee status (eg, clerk, manager, or executive) and remuneration status.

Moreover, as of 1 January 2022, the so-called Certification of Gender Equality has been introduced in order to certify the concrete measures and regulations drawn up and implemented by employers to fill the gender gap. Such initiatives may include those concerning career opportunities within the company or equal pay for equal tasks, as well as any anti-discrimination measures (even indirectly) related to gender – for example, in the case of maternity.

Whistle-blowing 

Italian legislation has ratified EU Directive No 2019/1937 concerning whistle-blowing provisions related to the protection of persons who report breaches of EU law. The new legislation extends the obligation to establish reporting channels to all private sector companies with more than 50 employees.

The following four measures are among those provided for by European and Italian law-makers.

Information must be reported on any breach of national or EU legal provisions that harms the public interest or the integrity of the private entity. 

In addition to employees, protection has been extended to co-workers, consultants, shareholders, volunteers or trainees –  as well as persons whose work-based relationship is yet to begin and persons holding administrative, management, monitoring, supervisory or representative positions – in cases where information on breaches has been acquired during the recruitment process or other pre-contractual negotiations. Protection will now also cover persons who report or publicly disclose information acquired in a work-based relationship that has since ended.

Private sector companies must provide internal and external reporting channels that ensure the confidentiality of whistle-blowers. Additionally, any processing of personal data must comply with Italian data protection law.

Cases that constitute retaliation – which is banned under the legislation in question – include job reassignment, dismissal, change of workplace, reduction of salary, modification of working hours, and non-renewal or anticipated termination of a fixed-term employment contract.

In case of non-compliance with the above provisions, the employer could be subject to administrative fines.