23/10/2017

Labor Law

Conditions of Employment

Collective labour agreements

In Italy  there are  associations  representing  employers  and  trade   unions  representing employees.
The National Collective Labour Agreements (“CCNLs”) between the  above parties govern  employment relationships and the consequent rights and obligations.

These agreements are  the  compulsory standard reference  for  everyone  employed in a particular  industry,  even  if they  are not members of a trade  union. Case  law, for instance, recognises that the CCNLs establish the minimum salary and minimum terms of employment for each  employee; in no case may an employment agreement establish working conditions less  favourable  than those defined by the relevant CCNL.

Wages and Salaries

An employer must pay at least the minimum basic salary established by the relevant CCNL.
The various CCNLs establish the statutory minimum salary for each level of employee; with each periodic renewal of the CCNL there is a salary increase.

An  employer can  pay  additional  amounts on  top  of  the  minimum basic  salary,  called superminimi assorbibili or anticipi su futuri aumenti contrattuali  (i.e. advance payments on future contractual increases).

An employee’s salary is normally paid in 13 monthly instalments (the extra one in December). However, many CCNLs (including that for the trade  sector) also provide for the payment of a
14th monthly instalment, generally  paid in June. Internal company agreements may provide for even more  instalments.

An employer can also grant  benefits in kind such  as housing, canteen/subsidised meals, a company car, housing, insurance policies  and loans,  etc.  Both benefits in kind and salaries are subject to taxation  and social security contributions.

Other conditions (fixed-term or indefinite agreements, trial period, working hours, holidays, maternity leave, TFR, etc.)

Fixed-term or Indefinite Agreements

Italian labor law allows both fixed-term and indefinite employment agreements.
The cases in which it is possible to offer a fixed-term contract are established by law and may also vary according to the different CCNLs. As a general rule, an employment agreement can be fixed-term only on specific  technical, production or organizational grounds or when it is temporarily necessary to replace workers. Otherwise, a fixed-term agreement is considered as invalid and the employment relationship is regarded as indefinite.

The CCNL establishes the percentage of employees that may be hired on a fixed-term contract.

Trial period

The parties may opt for a trial period.  The maximum length  is established by the CCNLs and may not exceed six months.

A trial period  has  to  be  agreed in writing  before the  start  of employment;  otherwise the trial period  is null and void and the  relationship is considered as an indefinite  employment agreement, running from the start  of work.

During the trial period both the employer and the employee can terminate the employment relationship at any time (without  any notice  and without any indemnity).

Working Hours

Working hours  are  established by the  CCNLs and  cannot normally  exceed 40  hours  per week for employees.

There   is  a  statutory  minimum overtime rate,  equal  to  the  ordinary  rate  plus  a  certain  percentage (approximately 15 percent). Special  rates apply for night work.

Holidays

As a general rule, holiday rights cannot be waived. The holiday allowance is determined by the CCNL for each category of employee and cannot be less than four weeks per year. At least two weeks of holiday per year have to be taken.

The employer and the employee have to agree on the holiday period. Employees are entitled to take at least two weeks of holiday per year during periods of their own choice.

Leaving Indemnity

Regardless  of  the  circumstances in  which  a  work  relationship ends, the  employee is entitled to receive a leaving indemnity (“TFR”), which is approximately equal to his monthly  salary multiplied  by the  number of years  of work (revalued  each  year according to specific  accounting rules).
Therefore, the employer has to set  aside  a TFR provision each  year for the employees. Alternatively, the employee may ask his employer to pay his TFR into a pension fund.

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