Andersen Employment Insights – September 2023

Monthly newsletter by Andersen European Employment Service Line

Andersen’s European Employment Service Line publishes its monthly newsletter that brings together key labor law news in different jurisdictions.

In this publication, which includes contributions from 21 European countries, Italian practitioners delve into five different topics:

National Labor Inspectors’ Summary of Remote Monitoring of Employees

INL, the Italian National Labor Inspectors’ agency issued a summary of the rules governing the use of systems that might be used for the remote control of employees. Under Italian law the remote control of employees is not allowed, and when a system is needed, e.g. for organizational, safety, or security reasons, that could potentially be used also for the remote control of employees, a prior agreement with the works council, or an authorization by the labor inspectors’ is necessary. INL summary is a very helpful read for employers that consider installing any such systems, and it also addresses matters such as GPS tracking, platform workers, workers in fields where video-surveillance may be needed to protect elderly and children.

Fixed-term Agreements

Law 85 of July 3, 2023, confirmed a decree issued in May, making it more flexible for employers to conclude fixed-term employment agreements, that may now be concluded, without the need to state a reason, for a duration of up to 12 months. In order to exceed 12 months, including in case of extension (and in any event, in case of renewal), one of the following conditions must be met:

1. Replacement of another worker
2. Cases provided for by collective agreements (national, territorial, or company-specific) signed by comparatively more representative unions or company-specific agreements signed by their works councils
3. In the absence of said collective agreements: cases provided for by any collective agreement implemented by the employer and, until April 30, 2024, in case of technical, organizational, or production needs

Youth Employment Incentives

On July 21 and then on August 10, 2023, INPS (the Italian social security agency) issued guidelines on the implementation of Law 85 of July 3, 2023, that provided an incentive, equal to 60 percent of the remuneration subject to social contribution, for a period of 12 months, in favor of employers who shall hire, between June 1 and December 31, 2023, individuals that meet all of the following conditions:

1. Under the age of 30
2. NEETs (not in education, employment, or training)
3. Registered in the “Youth Guarantee” program

INPS guidelines outlined in detail the limits within which the incentive may be obtained, as well as the possibility to partially cumulate the incentive with tax breaks provided by other laws.

The Retaliatory Nature of a Dismissal May Be Proven by Circumstantial Evidence

On August 3rd, 2023, the Italian supreme court (Corte di Cassazione 23702) rejected a petition lodged by a bank against a court of appeal decision that had upheld a dismissed employee’s claim to be reinstated. The bank had terminated the employee for reorganizational reasons. However, the employee successfully claimed that:

1. the existence of alternative jobs
2. previous conflicts with the bank’s CEO
3. refusal to grant the employee a “good leaver” status for stock plans purposes

were sufficient circumstantial evidence that the dismissal was retaliatory and therefore void. The case continues the increasing tendency of dismissed employees to claim their dismissal was retaliatory or discriminatory since this eventually leads to reinstatement or significantly higher settlements. Discrimination/retaliation must be proven by employees, but employers should carefully review and demonstrate the reasons for termination.

Judicial Commissioners Appointed to Manage Companies Charged to Unlawfully Exploit Employees. Impact on Supply Chains

On July 18, 2023, a widely reported press release by the Milan court public prosecutor informed that a judicial commissioner had been appointed to manage a company that had been charged to unlawfully exploit employees, by paying too low salaries, for too many working hours. Exploiting employees in a situation of need is a crime under Italian law and recently a number of cases drew widespread attention. Cases usually concern companies active in providing services (such as security services, cleaning services, freight and delivery services). This means that criminal investigations can have a broader impact on the supply chains served by the investigated companies, since, under Italian law, employers are jointly and severally liable for remuneration and social security allegedly unpaid to their providers’ workers. In light of such initiatives, employers should carefully scrutinize their supply chain arrangements, including the relevant agreements.