New laws and regulations
New rules on employees' participation rights in the management of private businesses
The Italian Parliament approved a bill that will grant certain participation rights to employees and their representatives on matters concerning organizational, economic and financial aspects of the companies they are employed by. Among the most relevant provisions, the new law will grant the following:
Works council members will have a right to participate in board of directors' meetings;
Distribution of company profits to employees and new rules to offer employees shares instead of gainsharing monetary premiums;
Additional information rights for works councils regarding strategic and managerial decisions, where the applicable collective bargaining agreements provide so;
Additional training rights for works council members (up to 10 hours per year).
The bill is not yet in force, as it has not been published in the Italian Official Journal. We expect the new provisions will go into force in a few weeks.
Upcoming referendum on HR matters
In the beginning of June, Italian citizens will be called to cast a vote on five referendum questions regarding work issues and citizenship:
Unlawful dismissals and protections for dismissed employees: the question aims at reintroducing the right for employees to be reinstated in any case where a dismissal is declared unlawful by a labor court, thus abolishing recent labour reforms.
Unfair dismissal indemnity for small companies: currently, except in cases where the dismissal is radically null and void, an employee unfairly dismissed by an employer employing up to 15 employees is entitled to receive an unfair dismissal indemnity capped at six months' gross salary. The second referendum question aims at eliminating this cap, allowing a labor court to determine an equitable unfair dismissal indemnity without limits.
Fixed-term contracts: currently, fixed-term contracts lasting up to 12 months can be entered into without having to specify any business need justifying the fixed term. The referendum question aims at requiring such business needs for any kind of fixed-term employment contract.
Joint liability in service contracts: this question aims at eliminating the rule according to which, in the context of several service agreements, the principal, the contractor and any subcontractors are not jointly and severally liable for work accidents deriving from specific risks of the contractor’s and subcontractors' businesses.
Italian citizenship: this question aims at allowing adult foreigners to apply for Italian citizenship after five years of residence in country. The requirement is currently set at ten years.
Depending on the outcome of these referenda, there may be some important changes to the law in the future. We will keep you updated.
Case law developments
Data breach and dismissal for just cause
A local court of appeal ruled that an employee who used a candidate's phone number for personal purposes can be lawfully dismissed for just cause. In the case at hand, the dismissed employee retrieved a candidate's phone number from her resume and texted her on WhatsApp for personal purposes. According to the judges, this behavior is a breach of the loyalty obligations the employee was bound to. The court also ruled that it was irrelevant that the employee did not disclose the personal data to third parties.
Settlement agreements ratified at the company premises
According to Italian laws, settlement agreements through which an employee waives employment-related rights must be ratified by a settlement commission, namely independent conciliatory boards or conciliatory boards composed of trade union representatives. The principle is that employees must receive all the information needed to make a conscious decision and receive technical assistance, if needed, without external pressure. Based on this rationale, the Italian Supreme Court ruled that signing a settlement agreement at the company’s premises does not comply with the requirements set out by Italian statutory law. According to the Court, in fact, employees would not be free to make a proper decision in such a venue, as they could be influenced by external factors.
Middle managers can be subject to working hour regulations
Pursuant to Italian statutory laws, executive-level employees, employees performing managerial duties and employees with autonomous decision-making powers are not subject to working hour limitations set by law for other categories of employees. Nevertheless, according to a recent ruling by the Italian Supreme Court, a middle manager (in Italian quadro) who extended their lunch break several times without authorization, can be lawfully dismissed. According to the Court, irrespective of the employee's job classification, it was ascertained that (i) the employee did not have any actual managerial or autonomous decision-making powers and (ii) the collective bargaining agreement applied to the employee's employment relationship specifically provided that middle managers are also required to comply with rules on daily working hour.
