ITALY: An Introduction to Employment

Self-Employment vs Employment in Italian Labour Law

Under Italian law, the distinction between employment and self-employment is primarily governed by Articles 2094 and 2222 of the Italian Civil Code (CC), which define employment (lavoro subordinato) and self-employment (lavoro autonomo), respectively. Pursuant to Article 2094 CC, an employment relationship exists when an individual undertakes to perform intellectual or manual work under the direction, control and disciplinary power of the employer in exchange for remuneration. The defining element is subordination, which denotes the employer’s power to direct and supervise the employee.

The legal framework identifies several key features of subordinate employment: integration of the worker into the employer’s organisational structure; payment of a fixed salary, with the employer bearing responsibility for social security contributions and tax withholdings; continuity and regularity of the work performed; and the employee’s duty to act with diligence and loyalty, as provided by in Articles 2104 and 2105 CC. The most commonly used employment contracts in Italy are as follows.

• Fixed-term contracts provide for a specific duration, after which the relationship is terminated without the need to give notice. Generally, if the duration of the employment exceeds one year, the fixed-term contract must include a reason for setting a fixed term in order to be valid.
• Open-ended contracts do not have a set termination date. These contracts continue indefinitely and can only be ended by either the employer or the employee, typically with notice. This type of contract offers greater job security, as the employment relationship is ongoing unless formally terminated.

On the other hand, Article 2222 CC defines self-employment as the performance of a task or service by an individual who, in exchange for compensation, carries out the activity predominantly through their own labour, without being subject to the direction or control of the client. The essential feature is autonomy, both in the organisation and the execution of the work. Self-employed individuals are not integrated into the client’s organisational structure and operate without hierarchical subordination. They assume the economic and organisational risk of their activity, are typically remunerated through invoicing, and are responsible for their own tax and social security obligations. They also generally use their own tools and resources in performing the service.

It is common practice for companies to rely on forms of collaboration that present hybrid characteristics between self-employment and employment. This can occur unintentionally, for the purpose of circumventing tax and social insurance obligations and/or to avoid the employer’s responsibilities under labour law (bogus self-employment is a phenomenon – often referred to as false self-employment or dependent self-employment – that arises when individuals formally registered as self-employed are, in practice, engaged under conditions that reflect a de facto employment relationship). The presence of elements referable to a subordinate relationship in the context of a self-employed collaboration can lead to companies facing several practical risks and complexities: if a self-employed individual is found to be operating under conditions akin to employment, courts or labour authorities may reclassify the relationship as employment.

Italian case law, particularly from the Supreme Court of Cassation, consistently upholds the principle that the substance of the relationship prevails over its formal designation. Courts examine various indicators of subordination, including the imposition of fixed working hours, the use of tools provided by the client, exclusive and stable integration into the client’s business, and the exercise of directive or disciplinary powers. Where such indicators are meet, a relationship initially framed as self-employment may be reclassified as employment, with significant legal consequences. These include the retroactive recognition of employment rights, the adjustment of remuneration and the imposition of obligations on the employer in terms of social security contributions, taxes and employment benefits.

Temporary agency work (somministrazione di lavoro)

The Italian legal framework recognises somministrazione di lavoro as a regulated form of triangular employment, governed primarily by Legislative Decree No 81/2015 and Legislative Decree No 276/2003 and aligned with Directive 2008/104/EC of the European Union. This arrangement involves three distinct parties:

• the employment agency (somministratore), duly licensed and registered with the National Agency for Active Labour Policies (Agenzia Nazionale per le Politiche Attive del Lavoro; ANPAL);
• the worker (lavoratore somministrato), formally employed by the agency; and
• the user company (utilizzatore), which receives the worker’s services and exercises managerial authority over their daily tasks.

The legal structure is underpinned by two separate contracts:

• a commercial contract between the agency and the user company; and
• an employment contract between the agency and the worker.

There are two permissible types of agency work:

• fixed-term contracts, which may last up to 24 months with the same user; and
• permanent contracts, also known as staff leasing, which are allowed only under specific legal provisions or collective agreements.

The use of agency work is subject to quantitative limits, typically expressed as a percentage of the user company’s permanent workforce (eg, 20%–30%). The law imposes prohibitions on agency work in certain contexts, such as replacing striking workers or operating in companies that fail to meet occupational safety standards. Moreover, agency workers must receive the same working conditions and benefits as employees of the user company performing equivalent roles. The Court of Justice of the European Union was recently called upon to assess the compatibility of Italian legislation on open-ended temporary agency work (somministrazione a tempo indeterminato) with Directive 2008/104/EC, which presupposes safeguards for the workers involved – such as limits on assignment duration or mandatory justification – that are not met under the Italian legislation.

Jus Variandi under Article 2103 of the Italian Civil Code

Under Article 2103 CC, the principle of jus variandi grants employers the unilateral authority to modify the duties assigned to employees. However, this prerogative is subject to strict legal boundaries aimed at safeguarding the employee’s professional dignity and acquired skills.

• Assignment to equivalent duties: Employers may reassign employees to tasks deemed equivalent to their previous roles. Equivalence is not determined by job titles but by the legal classification and the potential of the new duties to preserve or enhance the employee’s professional competencies.
• Assignment to lower-level duties: Demotion is permitted only under specific circumstances, such as organisational restructuring or legitimate business needs, and must be formally communicated in writing. Even in such cases, the employee retains their contractual level and salary, except for variable pay tied to specific tasks.
• Assignment to higher-level duties: if an employee performs higher-level tasks continuously for a period defined by collective agreements (typically six months), the reassignment becomes permanent, unless it was temporary (eg, covering for an absent colleague). This provision ensures recognition of professional advancement.
• Individual agreements in protected venues: Employees and employers may enter into agreements to modify duties, classification and remuneration. These must be signed in protected venues, such as before a union representative or certification commission, and must serve the employee’s interest, such as job retention or career development.