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Italy: Updated Legislation on Employment Contracts

(Aug. 20, 2015) On June 25, 2015, new legislation making substantial revisions to Italy’s labor code entered into effect. (Legislative Decree No. 81 of June 15, 2015, Organic Regulations of Employment Contracts and Revision of the Norms Concerning Labor, in Accordance with Article 1, Paragraph 7, of Law No. 183 of December 10, 2014 [L.D. No. 81], GAZZETTA UFFICIALE, No. 144 (June 24, 2015), NORMATTIVA (in Italian).) The new legislation seeks to foster employment by making Italy’s regulation of employment relationships more flexible.

Protective Provisions for Individual Employment Contracts

While the new legislation states that the typical form of employment relationship in Italy is an employment contract of indeterminate duration (L.D. No. 81, art. 1(1)), the legislation provides for other categories of employment relationships with fewer regulatory requirements. (Id. art. 2(1) & (2).) However, government employers will not be allowed to enter into these more flexible employment relationships. (Id. art. 2(4).)

The new law provides that when as a consequence of a corporate restructuring the position of an employee changes, that person may be assigned to tasks assigned to a lower-level position but falling within the same legal category of jobs. (Id. art. 3(1) ¶ 2.) In such a case, the employee must receive adequate training for the new assignment. (Id. art. 3(1) ¶ 3.) However, under certain conditions, the law also allows for the employer and the employee to amend the employment contract by having the employee expressly accept new work conditions required by the employer. (Id. art. 3(1) ¶ 6.)

If the new tasks assigned to the employee are classified at a higher level than the employee’s original position, the employee has a right to receive additional compensation, and the new position may become permanent. (Id. art. 3(1) ¶ 7.) An employee may only be transferred from one productive unit within a company to another unit based on proven technical, organizational, and product-related grounds. (Id. art. 3(1) ¶ 8.)

Part-Time Employment Contracts

Part-time employment contracts, according to the new legislation, must be stipulated in writing. (Id. art. 5(1).) An express indication of the duration of the annual, monthly, weekly, and daily working schedules must be included in these contracts. (Id. art. 5(2).)

The law also provides that part-time workers may not receive treatment inferior to that of full-time workers with respect to their pay and benefits and must be compensated in proportion to their work schedule. (Id. art. 7(1) & (2).) A worker’s refusal to change his employment relationship from full-time to part-time, or vice versa, does not constitute grounds for dismissal. (Id. art. 8(1).)

Full-time workers suffering from certain serious medical conditions have the right to request to change to a part-time schedule. (Id. art. 8(3).) The same right exists when such medical conditions affect employees’ spouses or certain close relatives. (Id. art. 8(4).) In some cases, employees also have the right to request a reduction of their schedules from full- to part-time in connection with parental leave. (Id. art. 8(7).) Unless expressly stated in an applicable legal provision, all the norms on part-time employment apply to employees in the public sector. (Id. art. 12.)

Other Forms of Flexible Employment Relationships

The law also regulates supplemental labor, extraordinary labor, and the “elastic clause” in employment contracts. (Id. art. 6.) Supplemental labor is that required by the employer outside of the normal work hours of the employee, with a maximum of 25% additional hours; the employee may reject to work for the requested supplemental hours. (Id. art. 6(1) & (2).) Extraordinary labor, which is that rendered outside normal work hours, is allowed in part-time jobs. (Id. art. 6(3).) The “elastic clause” is a provision in part-time contracts, subject to collective bargaining agreements, permitting variation in the location or duration of employment. (Id. art. 6(4).)

In addition, the law regulates “intermittent” labor contracts for workers 24 years of age or younger. (Id. art. 13(1).) Intermittent contracts, which must be in writing (id. art. 15(1)), allow the employer to use the employee’s services, according to exigencies established in the respective collective bargaining agreement, for a certain duration or for set seasons of the year. (Id. art. 13(1) & (2).) Intermittent work is prohibited in certain circumstances, e.g., in order to provide substitutes for workers exercising their right to strike (id. art. 14(1)(a)) or when collective measures to reduce the work schedule have already been adopted in a company. (Id. art. 14(1)(b).) Intermittent contract workers may not receive economically discriminatory treatment in comparison with other workers who perform the same duties. (Id. art. 17(1).)

Apprenticeship Contracts

The law includes new provisions on “apprenticeship for qualification, professional degrees, and certificates of higher technical specialization,” with the purpose of combining academic learning and practical experience for apprentices. (Id. art. 43(1).) Professional apprenticeship contracts are allowed in both the public and private sectors for workers who are at least 17 years of age and, with some exceptions, for a maximum of three years. (Id. art. 44(1) & (2).)

“Contracts of apprenticeship for advanced training and research” may be established to allow workers to pursue college and other advanced degrees. (Id. art. 45(1).) In such cases, employers must enter into an agreement with the educational institution involved, establishing the terms of the apprenticeship (e.g., work schedule, leave, and payment, among other factors) and the educational and other obligations of the employee. (Id. art. 45(2).)

Limits to Employment Flexibility

The new legislation includes safeguards to ensure a certain degree of employment stability under the new flexible forms of employment relationships. For example, unless otherwise provided in collective bargaining agreements, workers hired on a fixed term basis may not exceed 20% of the total workforce under a flexible employment duration regime. (Id. art. 23(1).)

New Rule on Unionization and Collective Bargaining

The law extends unionization and collective bargaining rights to workers provided by labor placement agencies. (Id. art. 36(1).)