Subordinate employment relationship (Legislative Decree no. 81/2015)
A subordinate employment contract is characterised by the ‘subordination’ of the employee, who undertakes to perform his work on behalf of and under the direction of another person in return for remuneration.
A distinction is made between
Permanent employment relationship: This is the usual form of employment relationship, which is the most stable. It is not limited in time and can only be interrupted for good cause or for a justified reason.
Fixed-term employment contract: This has a maximum duration, which is currently set at 12 months, with the possibility of extension to 24 months, but only if at least one of the following conditions is met:
● Temporary and objective needs not related to the regular activity;
● Need to replace other employees;
● needs related to a temporary, significant and unpredictable increase in normal activity.
Part-time work: In the context of an employment relationship, including a fixed-term employment relationship, work may also be performed on a part-time basis. The reduction in working hours may take place
● horizontally, if the employee works fewer hours each day than the normal daily working hours
● vertically, if the employee only works full-time on a few days a week, a month or a year
● in a mixed version, which is a combination of the two aforementioned forms.
Apprenticeship training: Apprenticeship is a subordinate labour contract of indefinite duration aimed at training and employing young people.
It is divided into three types
1. Apprenticeship for professional qualification and diploma, the upper secondary school qualification and the higher technical school qualification, for young people aged between 15 and 25, with the aim of obtaining one of the aforementioned qualifications in the workplace;
2. Professional apprenticeship for young people between the ages of 18 and 29 with the aim of learning a trade or acquiring a professional qualification;
3. Further education and research training for young people between the ages of 18 and 29 aimed at obtaining higher and further education qualifications, including doctorates, diplomas related to the training pathways at higher technical institutes, for research activities and for training for access to the usual professions.
Intermittent (= periodic, intermittent) employment contract: This is a fixed-term or open-ended contract under which an employee places himself at the disposal of an employer who may use his labour intermittently or intermittently in accordance with the requirements laid down in the collective agreement, also with regard to the possibility of providing the services in certain periods during the week, month or year. As regards the subjective scope, the intermittent labour contract may be concluded (Article 13(2))
● with persons under the age of 24, provided that the work is completed by the time they reach the age of 25, or
● with persons older than 55 years of age.
With the exception of the tourism sector, public institutions and the entertainment industry, the intermittent labour contract is permitted for each employee with the same employer for a total period of no more than 400 days of actual work within three calendar years.
Temporary employment contract (Legislative Decree no. 81/2015): Three parties are involved in the supply of temporary workers:
- an authorised agency (so-called ‘somministratore’) registered in a special digital register kept at the National Agency for Active Employment Policies (ANPAL);
- a company (the so-called user) that uses the services of the employment agency to find staff;
- one or more employees (known as ‘somministrati’ or ‘in somministrazione’) who are hired by the employer and sent by the employer to the user.
It is therefore a complex arrangement in which two different contractual relationships exist:
- The commercial labour leasing contract concluded between the employer and the hirer, which is commercial in nature and may be for a fixed or indefinite term.
- The employment contract between the manager and the employee, which can be either fixed-term or open-ended.
Parasubordinated work
Parasubordinated work refers to a type of work that lies between subordinate employment and self-employment. These are forms of continuous collaboration that are coordinated with the employer's organisational structure but do not have a subordinate relationship (Legislative Decree no. 81/2015 on coordinated and continuous collaboration).
Self-employed activity
A self-employed activity is carried out by a person who undertakes to carry out an activity for a client in return for remuneration on their own account and without a subordinate relationship. There are two main types:
● Employment contract with VAT number
● Occasional service:
Under current law, occasional work is permitted, i.e. activities that, in the course of a calendar year
a) for each service provider, based on the total number of users, result in remuneration of no more than € 5,000;
b) for each user, in relation to the total number of users, also result in remuneration totalling a maximum of € 5,000.
Requirements and content of the individual employment contract under Italian law (Contratto di lavoro in Italy)
The individual employment contract in Italy is the contract by which the employee undertakes to work under the direction and supervision of the employer and receives remuneration in return (Art. 2099 of the Civil Code).
The employee's work may be of a manual or intellectual nature.
For the contract to be valid, the following essential elements must be present
(a) the consent of the parties
(b) the purpose
(c) the subject of the contract
(d) the form.
(a) The employment contract is concluded by the consent of the parties: it is therefore essential that both parties have the legal capacity to conclude an employment contract, which is acquired at the age of 16. For the contract to be valid, the will to conclude the contract must be explicit and must not have been impaired by error (i.e. misconception of reality), force (i.e. threat of future harm) and fraud (deception without which the employee would not have concluded the contract).
(b) The typical purpose of the employment contract is the exchange between the employer's obligations (remuneration) and the employee's obligations (performance). The reason for the contract must be lawful, i.e. in accordance with the law, public policy and morality.
An unlawful purpose generally exists if the employment relationship itself proves to be illegal (so-called ‘illegal employment’): In such cases, this is because the mandatory provisions for the protection of the employee provided for by law are violated.
c) The employment contract must precisely describe the activity that the employee is to perform and it must be
● lawful and in conformity with the law;
● possible: i.e. in such a way that the contractually owed services can actually be performed by the employee (e.g. if special requirements or psychological/physical aptitude are necessary for the performance of a job)
● determined or determinable: in individual cases or in any case by reference to collective agreement regulations.
Furthermore, the contractual conditions may not be less favourable for the employee than those provided for in the national collective agreements and any company collective agreements, the Contratti Collettivi Nazionali di Lavoro (CCNL).
Conclusion of the Italian employment contract
Generally, before concluding a contract, the employer signs a so-called declaration of commitment to the employee in which he undertakes to employ him.
If this obligation is not fulfilled, the employee can take legal action to obtain a judgement containing all contractual obligations as well as compensation for damages.
When hiring, the employer must provide the employee with the so-called ‘letter of hiring’ under penalty of an administrative sanction, which contains the following
- the signed declaration of registration in the employee register
- <information on the conditions applicable to the employment relationship, such as
- Identity of the parties;
- Place of work;
- Date of commencement of the employment relationship;
- Probationary period, if any;
- Duration of the employment relationship;
- Classification, level, qualification and duties.
- If there is no reference to the collective agreement applied, the reference must include information on
- Duration of the probationary period;
- Amount of the starting salary and its components, as well as the payment period;
- Duration of the holiday period;
- Working hours;
- Notice period in the event of termination by the employer or by the employee themselves
A written employment contract is of course the best solution, as it proves the characteristics of the employment relationship and enables the fulfilment of the legal obligations mentioned above. Some collective labour agreements (CCNL) require the written form for probatory purposes.
However, in the absence of the letter of engagement, it is up to the employer to prove the content of the contract, whereas if the letter is drawn up, it is up to the employee to prove that the content differs from the written information.
An exception to this are certain optional clauses in the employment contract, the validity of which is required by law to be in writing, e.g. the probationary period agreement and the non-competition clause.
The collective labour agreement (CCNL) and its effects on employees regardless of trade union affiliation
In Italy, the CCNL collective agreement, which can be concluded by the parties to the collective agreement, is an atypical contract (Article 1322 of the Civil Code), subject to the rules on contracts in general (Article 1321 of the Civil Code). The collective provisions therefore apply, at least strictly speaking, only to the members of the trade union organizations (of employees and employers) that have concluded the contract.
However, the case law has reached the extension of applicability to all workers by relying on Article 36 of the Constitution, a provision that recognizes the right to ‘sufficient’ remuneration to ensure a ‘free and decent life’ for all workers and their families. The judges affirmed the direct applicability of the constitutional requirement also in relations between private individuals and interpreted the concept of ‘sufficient remuneration’ with reference to the minimum rates provided for in the CCNL, applying these contractual provisions also to labour relations between subjects who are not members of a trade union. This case law, which has essentially remained unchanged to this day, precludes employers who are not members of a trade union from paying employees at a lower rate than that stipulated in the collective agreement.
The rights and obligations of employees in Italy
The most important rights of the employee
- Remuneration: The constitution states that remuneration must be proportionate to the quantity and quality of work and must be sufficient to ensure a free and dignified life for oneself and one's family. As there is no statutory minimum wage in Italy, the parties to collective agreements base their pay on the minimum wages stipulated in collective agreements;
Pay can be divided into direct, indirect and deferred remuneration.
- Direct remuneration is the part that the employee receives at regular intervals, usually monthly. It is made up of basic salary, performance bonus, length of service bonus, production bonus or canteen allowance and various bonuses,
- The indirect remuneration is the part that the employee usually receives annually. It is made up of holidays, public holidays, paid annual leave, performance bonus (if paid annually), additional monthly payments, such as the thirteenth month in December and the fourteenth month in July if this is provided for in the collective agreement.
- The deferred compensation is the part that the employee receives once upon termination of the employment relationship.It is made up of the severance payment and the compensation in lieu of notice.
The TFR (=Trattamento fine rapporto), a special feature of the Italian legal system, is a deferred salary component to which the employee is entitled at the time of termination of the employment relationship, regardless of the type of termination, and which accrues monthly. The TFR is due for all subordinate employment relationships (including fixed-term, part-time, apprenticeship and work training contracts) and also accrues during the probationary period (Art. 2120 of the Civil Code).
The amount of TFR due to the employee is calculated by adding the TFR rate set for each year of employment. This quota must be equal to the amount of the annual salary divided by 13.5, a figure commonly used for all employees, and may not exceed it. Article 2120 of the Civil Code states that the annual salary includes ‘all amounts, including the equivalent value of benefits in kind, paid in return for the employment relationship, with the exception of those paid as expense allowances’, unless otherwise provided for in the collective labour agreements.
- Working hours: The duration of normal working hours is set by law at a maximum of 40 hours per week (however, the CCNL - collective labour agreements - may provide for a shorter duration). All additional hours worked up to the legal limit of 40 hours are considered overtime, while hours worked in excess of 40 hours are considered overtime. Although this is not explicitly stated in the applicable legislation, the daily working time may not exceed 13 hours (the minimum daily rest period is in fact at least 11 uninterrupted hours every 24 hours). The maximum weekly working time is determined by collective bargaining, but may not exceed an average of 48 hours per week, including overtime;
- Weekly rest period: The employee is entitled to a rest period of at least 24 consecutive hours every seven days (in practice, there is usually a rest day after six working days), which normally coincides with Sunday and is cumulated with the daily rest period (11 hours). The weekly rest period is calculated as an average over a maximum period of 14 days;
- Holidays and public holidays: These are defined by law and by the CCNL (collective labour agreements). In any case, each employee must be granted an annual paid holiday of at least four weeks. This leave must be taken for at least two consecutive weeks by 31 December of the year in which it accrues, if the employee so requests, and for the remaining two weeks in the 18 months following the end of the year in which it accrues, except in the case of longer deferral periods stipulated in collective agreements. Collective agreements may stipulate longer holiday periods. The minimum leave of four weeks cannot be monetised (i.e. compensated with an equivalent value in return for the employee not taking the leave), except in special cases expressly provided for (e.g. remaining leave due to the termination of the employment relationship during the year or in the case of fixed-term employment contracts with a duration of less than one year), as the principle of actually taking the leave to restore the employee's mental and physical capacity applies;
- Marriage leave: All employees in Italy are entitled to paid leave on the occasion of a civil marriage, the duration of which is generally set at 15 days (calendar). Trainees are also entitled to this leave. It should be noted that the dismissal of an employee on the occasion of marriage (i.e. dismissal in the period between the application for publication and one year after the ceremony) is null and void;
- Maternity/paternity: The Law for the Protection and Support of Maternity and Paternity (Legislative Decree no. 151/2001) provides for various forms of protection in this area, from a general ban on dismissal for the working mother from the beginning of pregnancy until the child is one year old (and in certain cases for the working father), to the guarantee of compulsory time off work, optional time off work at the employee's discretion and a range of paid and/or unpaid leave to care for the child (with special consideration for children with disabilities). Similar protection to natural motherhood is also provided for adoption and foster care in Italy;
- Right to study: if an employee attends school or study courses, he is entitled to be granted special shifts and special working hours as well as leave to attend such courses;
- Illnesses and accidents at work/occupational illnesses: In the event of illness or accidents at work/occupational illnesses, continued employment is guaranteed for the period specified by the CCNL (=collective labour agreements) (so-called comporto period). In the event of illness, the employee is entitled to wages or compensation to the extent and for the duration stipulated by law, possibly with supplements paid by the employer in accordance with collective agreements. In the event of an accident or occupational illness, the first four days (including the day of the accident itself) are paid by the employer, while from the fourth day after the day of the accident/occupational illness and until clinical recovery (in contrast to the sickness benefit of the INPS (Istituto Nazionale Previdenza Sociale), which is paid for a maximum of 180 days per calendar year), the costs are covered by INAIL (Istituto Nazionale contro gli infortuni sul lavoro) (with a possible supplement from the employer to the extent stipulated by law or collective agreement);
- Occupational safety: The employer is obliged to take the necessary measures to protect the health and physical integrity of the employee in accordance with the provisions of the Consolidated Labour Safety Act (Legislative Decree No. 81/2008, supplemented and amended by Legislative Decree No. 106/2009).
- Trade union activity: The employee has the right to join trade union organisations, express his/her opinion and engage in trade union activity;
- Strike: The right to strike is guaranteed, pay is suspended during the strike;
- Equality between men and women: Female employees have the same rights as male employees.
The most important duties of the employee
Every employee has duties towards their employer that supplement the duty to work because they determine the manner in which work is performed:
- Duty of care (Art. 2104 of the Civil Code): It refers to the diligence and commitment that the employee must exercise in the performance of their work and provides the employer with an objective benchmark for assessing their performance. The quality of the performance owed must be assessed on the basis of the required tasks and the employee's skills and experience. On the other hand, the employer's requirements must be met in full and the employee's work must be coordinated with the other work of colleagues. Inherent in the duty of care is a duty to cooperate, which is also rooted in the duty to perform in good faith, since the employee not only fulfils the obligations arising from the employment contract by formally making his or her labour available to the employer, but it is necessary and essential that his or her conduct is such that the employer can use this labour effectively and profitably, which is also achieved by integrating the contributions of the individual employees into the uniform context of the function or service to which the work performance relates;
- Duty of obedience, i.e. the obligation to follow the employer's instructions for the proper performance of work;
- Duty of loyalty, i.e. the employee's obligation to behave reliably towards the owner of the company and to protect its business in every way. For this reason, he must not compete with the entrepreneur for whom he works, and he must avoid causing damage to the activity in which he is contractually involved.