Employment Law in Italy: What’s New?

Have there been any recent or notable developments in your jurisdiction in terms of conducting business and employment law? Has this affected your firm?

One recent measure which significantly impacted employment regulations and, hence, the Italian labour market and companies’ organisation, was the so-called Dignity Decree (Decree Law 87/2018), also due to, among other things,  ruling no. 194/2018 by the Constitutional Court, which blamed the mechanism for calculating the payable indemnity for unlawful dismissal that had been provided by the so-called “Increasing Protection Over Time” contractual structure, as unconstitutional.

The combination of the legislative judicial measures mentioned above led to a “revival” of redundancy-related disputes.

As a result, our assistance as lawyers and counsellors increased, both for drawing termination letters and the subsequent necessary actions, as well as for managing out-of-court disputes.

The Dignity Decree also reintroduced the requirement of the indication of the reasons for fixed-term contracts (versus open-ended ones) either in case they exceed the time limit of  12 months, even if by extension, or they are renewed.

In view of this, my company clients had to review their employment policies and to make sure no fixed-term employment relationships they entered into exceeded 12 months, except in the case of workers hired on temporary contracts for specific replacement, since this is the only case clearly allowed by the law.

In regards to our law firm, these law reforms increased requests for our legal advice related to this type of contract, its allowed use and limitations, and the search for alternative solutions.

This is why investors should find reliable local consultants, who can help them draw a tailored strategy for their business, especially with regard to labour law, which is extremely complex in Italy.

What might an international company need to keep in mind before conducting business with or in Italy?

As it is known, Italy holds a good position in the list of the world’s ten biggest economies, however, conducting business in Italy requires an in-depth awareness of its uses and culture, which also depends on its various regions. This is why investors should find reliable local consultants, who can help them draw a tailored strategy for their business, especially with regard to labour law, which is extremely complex in Italy.

Labour costs are often the higher ones to be borne by medium to large companies.

How would you say your firm affects the country’s economy?

Lawyers in our firm have been active in the law-making debate, especially our naming Partner Mr Pietro Ichino, who has been a member of the Senate for several years. Our firm also affects the country’s economy because when we advise for the use of an instrument, i.e., a type of contract rather than another, this cannot but influence the labour market and business organisations overall.

Why should companies focus on labour law?

Labour costs are often the higher ones to be borne by medium to large companies. This tells us how important human capital is as a tool for business development. Helping clients manage their human resources has an incredible impact not only on labour costs in terms of savings but also on productivity and, therefore, ultimately on company profits. Building retention and corporate welfare plans, maximising the results of good management of industrial relations, reaching the most widely shared agreements, promoting personal development and careful planning of HR missions are certainly one of the best tools we have available to help our customers in managing personnel, not only in the pathological phase of a relationship, but above all in the physiological one.

Luca Daffra

Via Lorenzo Mascheroni, 31 20145 Milano

Tel. +39 02 4819 3249

e mail: luca.daffra@ichinobrugnatelli.it

https://ichinobrugnatelli.it

I am a Partner of Ichino Brugnatelli e Associati, which I joined in 2006.

Admitted to the bar in Milan, I have strong expertise in employment law and labour law, social security issues and privacy-related matters, also through previous significant experience with leading Law firms, both national and international.

I have taken part in extraordinary corporate transactions, focusing on Labour Law issues related to mergers and acquisitions, restructuring and reorganizations, redundancies and downsizing.

Ichino Brugnatelli e Associati is widely recognised as a leading specialist employment law firm. We have also strong experience in high-stakes litigation and complex transactions, for both domestic and international clients.