In brief

This publication features the latest Employment developments in Italy.

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New laws and regulations

Extension of the right to work remotely

A new law recently extended, until 31 March 2023, the right of vulnerable employees to work in agile mode. However, the right to work remotely was not extended for parents of children below the age of 14, who had previously benefitted from it. Further, starting from 1 January 2023, employees working remotely, will be required to enter into individual agile work agreements with their employers; the latter will have to make all mandatory communications related to the agreement within five days from the beginning of the remote work setup. 

Work-life balance and parental leaves: new sanctions 

The National Labour Inspectorate recently provided clarifications on the new sanctions introduced by the so-called Work-Life Balance Decree that entered into force on 13 August 2022 (you can read more about the topic here). In particular, these new sanctions are: 

• An administrative sanction ranging between EUR 516 and EUR 2,582 for those employers that impede the use of (i) mandatory paternity leaves; (ii) parental leaves; or (iii) breastfeeding leaves
• An administrative sanction ranging between EUR 1,032 and EUR 2,582 in case of dismissal of working fathers on paternity leave until their child turns one, as well as the employee’s reinstatement
• Imprisonment up to six months for employers that impede working fathers to use their paternity leave in case the mother passes away, is seriously ill or abandoned the household

Implementation of the EU Whistleblowing Directive 

A bill of law implementing the EU Whistleblowing Directive is currently pending in Parliament and should enter into force shortly.

Based on the first available, unofficial drafts of the new law, it appears that the new rules will impact the currently applicable regulations on corporate liability. In essence, all companies that adopted an organizational, management and control model pursuant to current legislation will be required to update it. Failure to align with the new requirements may lead to:

1. Administrative sanctions ranging from EUR 10,000 to 50,000
2. The inefficacy of the company’s corporate liability model, thus nullifying its safe harbor effect (i.e., exemption of the company from corporate liability)
3. Potential reputational damages for the company, since non-compliance with the new rules will be reported to the Italian Anti-Corruption Authority, which will be the authority in-charge of issuing sanctions
4. Potential liability of the directors and managers vis-à-vis the company and its employees

We will issue an updated, detailed newsletter once the final official text of the law is in force.

Enhanced parental leaves

The government issued a new law that introduced an extra month of parental leave starting from 31 December 2022. The leave is paid with an allowance equal to 80% of the employee’s salary. This month of enhanced parental leave must be used, alternatively by either parent, before their child turns six.

Social security contribution discounts 

The new Budget Law for 2023 provides that employers can benefit from a discount of up to EUR 8,000 in social security changes in the following cases:

1. Hiring of employees below age 36
2. Hiring of unemployed women residing in economically disadvantaged regions or working in sectors with significant gender gaps
3. Hiring of employees benefitting from income support measures (“reddito di cittadinanza”)

Lower taxes on production bonuses 

The new Budget Law for year 2023 reduced the tax rate on production bonuses to be paid in 2023 pursuant to shop-level collective agreements from 10% to 5%.

Case law developments

Non-compete covenant valid even without minimum granted consideration

The Italian Supreme Court ruled that a non-compete covenant is not necessarily null and void if the relevant compensation (mandatory under the law) is paid during the employment relationship and is not predetermined in a certain minimum amount. According to the Court, it is sufficient that the covenant provides for a mechanism to calculate compensation and that the latter is not unfair and disproportionate in light of the restrictions imposed on the employee.

Dismissal for disciplinary reasons with criminal implications: proceedings run distinctly 

The Italian Supreme Court recently clarified that, if an employee is dismissed for facts of a criminal relevance, proceedings on the termination and those in front of a criminal court run distinctly. In fact, even when a terminated employee is acquitted in the criminal proceedings, they can still be lawfully dismissed for cause when their conduct has broken the bond of trust between them and the employer.