Italy: Contracts of employment

Original author: Massimo Pallini
Updating author: Luciano Racchi

Summary

  • An employment contract may be expressed or implied, oral or in writing. (See General)
  • There are various types of employment status and employment contract. (See Types of contract)
  • Employers must provide employees with a written statement of the main terms of their contract, containing certain information. (See Written statement of terms of employment)
  • The employer's "standard business terms" cannot deviate from legislative provisions to the disadvantage of the employee. (See Standard business terms and employment contracts)
  • An employer can vary an employee's contract without consent where it can demonstrate that new organisational necessities prevent it from continuing the contract on the original terms. (See Variation of contract)

General

Employment law is based on the concept of a contract of employment between an employer and an employee. The employee is considered the weaker party, because in most cases he or she cannot determine the terms of the contract. Therefore, employment law and national collective bargaining agreements, agreements between trade unions and employers' associations, (where binding on an employer), set a minimum level of protection for the employee. The employment contract may be expressed or implied, in writing or oral. A contract of employment is established when an offer is made by an employer and accepted by an employee with the intention to create a legal relationship. It can be established only for a lawful purpose.

The main obligations of the employment contract are the performance of the assigned duties by the employee and the payment of wages by the employer. The employee must be "loyal and faithful" to the employer.

The terms of employment contracts cannot deviate from statutory or national collective bargaining agreement provisions, except to the advantage of the employee. Any contract clauses that differ from legislative and collectively agreed provisions to the employee's disadvantage are considered null and void and are automatically replaced by the relevant legislative or agreed provisions.

Types of contract

An employee is defined in law as person who agrees to "collaborate with an enterprise, in exchange for remuneration, by performing intellectual or manual labour, under the authority and supervision of the employer". Other features of "subordinate employment" (as opposed to self-employment) indicated by case law include:

  • being subject to an employer's managerial and disciplinary authority;
  • integration into an enterprise's work organisation and productive structure;
  • receiving fixed pay at regular (monthly) intervals;
  • working regular hours/shifts agreed with an employer;
  • carrying out work at an employer's premises; and
  • using materials and equipment owned by an employer.

If by this definition, and taking into account these factors, a person is an employee, employment law applies, no matter what kind of contract he or she has entered into formally. In determining the legal nature of the employment relationship, the activity actually performed by the worker prevails over the formal contents of the contract.

People who are not employees by the above definition, because they are not personally subordinated to an employer, but who have other features of employees, such as being integrated into an employer's work organisation, are considered "semi-dependent" workers (parasubordinati). Although they are considered self-employed workers in law, some employment law protections have been partially extended to them, such as:

  • mandatory pension schemes; and
  • accident, sickness and maternity insurance and leave.

Such people can also sue their contracting partner in the labour courts, rather than the normal courts. In most cases, should the contracts for "semi-dependent" work (so-called "co.co.co." (collaborazione coordinata continuativa)), be declared unfair, the worker concerned is considered to have an indefinite-term employment contract with the employer from the beginning of their working relationship. In order to claim this right, the worker must complain in writing that his or her contract is invalid, within 60 days after the termination of the contract, and then file a claim before a labour court within the next 180 days. If the court rules a semi-dependent work contract invalid, the working relationship shall be characterised by law as an indefinite-term employment contract and the employer may be ordered by the courts to compensate the employee for lost remuneration and/or social security contributions.

It is illegal to circumvent the application of employment law or the obligation to pay social security contributions by using other types of contracts.

An employment contract can be entered into for an indefinite term or for a fixed term. An indefinite-term contract can be terminated only by the agreed notice (see Italy: Termination of employment > Notice periods) being given by either party, resignation, dismissal or retirement. A fixed-term contract must indicate a determined or determinable term of expiration (see Italy: Employee rights > Fixed-term workers). Employment can be full time or part time (see Italy: Employee rights > Part-time workers).

An employer may employ workers on a temporary basis for "occasional work" ("lavoro occasionale") in return for payment by vouchers provided that:

  • the number of hours worked does not exceed 280 per year;
  • and the total remuneration that an occasional worker is paid by vouchers does not exceed €5,000 per year (subject to a maximum amount of €2,500 from a single employer).

Certain employers are excluded from employing occasional workers: employers that employ more than five employees; employers in the construction sector; and employers working under a private and/or public procurement contract.

An employer and an employee may agree a contract for "smart" working, whereby the employee works his or her normal working hours at home or from another agreed location outside the workplace. During an employment contract for smart working both parties continue to have the same rights and duties as before.

Written statement of terms of employment

Although an employment contract can be entered into between the parties orally, it is common practice for employers to provide employees with a written employment contract recording the main terms of the employment and notifying employees of any change to the terms of the contract no later than one month after the contract or the change comes into effect. Employers also have a statutory obligation to report the terms of employment contracts to social security and national insurance agencies as well as local labour offices.

Employment contracts usually provide:

  • the names and addresses of the employer and employee;
  • the date of the start of employment;
  • if the contract is for a fixed term, the foreseen end of the employment;
  • the place of work and an indication if the employee might have to perform work in different places;
  • the duties and characteristics of the job;
  • the composition of remuneration including bonuses, extra payments, premia and their payment date;
  • the hours of work;
  • the terms of paid leave; and
  • the period of notice that the employee must give or is entitled to receive on termination of employment (see Italy: Termination of employment > Notice periods).

Many of the above provisions may be accompanied by reference to the applicable national collective bargaining agreement, which would contain the main statutory rules on employment.

Where employees are posted to work outside Italy for at least one month, before departure their employers must give them a written statement providing information on: the period of employment abroad; the currency in which the employee is to be paid in respect to that period; any benefits in cash or kind payable to the employee in respect to the employment outside Italy; and any terms and conditions governing the employee's repatriation.

Standard business terms and employment contracts

"Standard business terms" are contract terms pre-formulated by one party (the "user"), who presents them to the other party upon entering into the contract. These standard terms become part of the contract if they are known by the other party or can be found out by due diligence. However, some provisions in standard business terms have no effect if they are not specifically accepted in writing by the other party. These include clauses that limit the user's liability or give it the right to withdraw from the contract, or those that limit the other party's ability to sue to defend its interests or to contract with third parties. Any questions over the interpretation of standard business terms are resolved in favour of the other party to the contract with the user. In the employment context, the employer is considered the "user" in an employment contract, and its "standard business terms" cannot deviate from legislative provisions to the disadvantage of the employee, even where expressly accepted in writing by the employee.

Variation of contract

The terms of the employment contract are binding for both parties. Seeing as the employment contract refers to work to be performed in the future, the terms of the contract can only outline the general employment conditions. Therefore, the employer has the right to specify the contract's content in detail by issuing directives. However, if the employer wishes to change the general employment conditions, the employee's consent is required. If no agreement can be reached on varying the terms of the contract in this way, the employer may dismiss the employee only if it can demonstrate that new organisational necessities prevent it from continuing the contract on the original terms. Employees can contest such dismissals in the labour courts. However, an employer can unilaterally change an employee's duties without the employee's consent if the new duties belong to the same level of job classification under the national collective bargaining agreement and his or her salary is not reduced.

Sources/references

Employment contracts in general are governed by arts.2060-2129 of the Civil Code and by Act no.276 of 10 September 2003, Act no.92 of 28 June 2012, Act no.134 of 7 August 2012; Decree Law no.76 of 28 June 2013 as converted into Act no.99 of 9 August 2013; Decree Law no. 34 of 20 March 2014 as converted into Act no.78 of 16 May 2014; Legislative Decree no.81 of 15 June 2015. The main item of legislation relating to written statements of the terms of employment is Dlgs no.152 of 26 May 1997. Standard business terms are regulated by arts.1340-1342 and 2113 of the Civil Code. The right of the employer to issue directives is covered by arts.2094 and 2103 of the Civil Code.