New laws and regulations
Two-year gender pay gap report: new FAQ from the Ministry of Labour
The Ministry of Labour has updated its FAQ serving as guidelines for drafting the two-year gender pay gap report that companies with more than 50 employees are required to submit to the Ministry. The FAQ clarify that — for 2024 — reference must be made to the workforce employed as of 31 December 2023, regardless of whether the employer hired less than 50 employees before or after this date.
Damages compensation in case of unlawful fixed-term contracts
Further to the entering into force of a new law, as of 17 September 2024, if a labour court declares a fixed-term contract unlawful, by converting it to an open-ended contract, it may grant the employee damages exceeding 12 months of salary if the employee proves that they suffered greater damages. Until 16 September 2024, damages compensation was capped at 12 months of salary.
Case law developments
Selection of redundant employees during collective dismissals
According to the Italian Supreme Court, during a collective dismissal procedure, it is unlawful to only dismiss employees belonging to a certain business unit if the information notice, sent to the works councils and unions to begin the procedure, does not adequately specify the following:
- Why the redundant employees have been selected among a well-defined group of employees.
- Why the employer does not consider it appropriate to remedy this reduction by transferring the redundant employees to other business units.
Any trade union agreement reached at the end of the procedure does not in itself have the effect of remedying the aforesaid aspects, unless expressly specified in the same agreement.
Stock options and severance pay
The Court of Appeal of Milan was asked once again whether the value of stock options should be considered for the purposes of calculating the indemnity in-lieu-of notice and severance pay. According to the court, when stock options are granted on continuous and non-occasional basis, they must be taken into account for the purposes of calculating the above severance items.
In the case at hand, an executive-level employee that was dismissed for just cause argued that the amounts deriving from exercising stock options granted to them during their employment should be taken into account when calculating the indemnity in lieu of notice and severance pay. This because the stock options had been granted under a three-year or four-year plan, despite the existence of a company regulation excluding the relevant amounts from the calculation of any direct or indirect salary item.
Overturning the first-instance judgment and in contrast with a precedent of the same court in May 2024, the Court of Appeal of Milan instead held that the income from stock options (i) constituted a form of remuneration through profit-sharing and (ii) should be considered a source of employee income for tax purposes, even though it was paid by a foreign company belonging to the corporate group. The court held that the relevant value of the stocks should be taken into account when calculating severance pay, unless otherwise specified by collective bargaining.
Shopping activities during leave of absence
In a recent ruling, the Italian Supreme Court clarified that an employee who takes a leave of absence to care for a disabled relative can go shopping, as their presence in the disabled relative’s home is not required for the whole duration of the working day.
