LEGALINK CROSS-BORDER LAYOFFS QUESTIONNAIRE

A COUNTRY BY COUNTRY SUMMARY OF APPLICABLE EMPLOYMENT LAWS

SEARCH QUESTIONNAIRES

PREPARED BY

Pierre Fortin

BDL-Lex

Via Bertoloni 26/B
00197 Rome
Italy
Tel: + 39 06 807 20 34
Fax: +39 06 808 87 65

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ITALY

Are there any laws that govern a layoff of employees? If so, what do the laws require?

The issue is mainly regulated by Law No. 604/66 and by Law No. 300/70 (Statute of Workers). The general principle is that the dismissal must be supported by legitimate cause and / or justification, and must comply with specific procedures. The absence of legitimate cause or justification and a defect in procedure have the following consequence:

- in case of company with over 15 employees, the reinstatement of the employee in his employment (so-called real protection);
- in case of a company with fewer than 15 employees, the payment of an indemnity determined by the Judge (so-called compensation protection). Nonetheless, for some categories of workers (such as domestic workers, workers on trial period and workers of more than 65 years of age) the requirement of the compulsory motivation does not apply, and the dismissal can be freely communicated.

Are there any formal requirements for terminating an employee or groups of employees?

Yes, there are specific requirements, for both individual and collective dismissals. First, the dismissal must be communicated in writing; a verbal dismissal is ineffective.

In the case of a dismissal for disciplinary reasons, the rules provided by the Statute of Workers shall be applied. In summary, the specific disciplinary reason must be communicated in writing and the worker must be given a specific period (not less than 5 days) to provide his justifications. Upon expiration of such time, it is possible to proceed with the termination.

Collective dismissals must also comply with specific procedures. They must be communicated to the Trade Union Association, to the “Direzione Provinciale del Lavoro” or to Labour Ministry and must indicate the technical, organizational and / or production reasons for which the dismissals cannot be avoided, the number, location and company profiles of the entire staff. The workers to be laid off must be identified according to specific criteria set by the collective agreements or, failing that, by Law 223/1991 (which takes into account the employee’s family situation, the length of service and the technical and organizational needs of the company.

Are there special legal requirements for a layoff caused by redundancy in the workforce?

The reduction of personnel (due to a decrease of the business or other objective reasons) is always possible, but must comply with the rules already mentioned. In particular, the procedure cannot be applied indiscriminately, and must follow certain criteria. This is regulated by Law No. 223/1991 which provides a very articulate procedure applicable to companies with more than 15 employees who intend to make at least 5 dismissals in a 120 days timeframe, for reasons of a decrease/close of the business, or company reorganization.

Are there employment laws that laid-off employees can use to challenge their inclusion in the layoff?

An employee dismissed for redundancy may invoke the non compliance with the procedure provided for by Law No. 223/1991. Failure of any step of the procedure entails the nullity of the proceeding, and the right to reinstatement in employment.

What sanctions or penalties may be imposed against employers for violating any of the requirements mentioned in No’s 1-4 above?

The illegality and/or invalidity of the dismissal may give rise, as already mentioned, to the reinstatement of the employee in his employment (in the case of company with more than 15 employees), or to the payment of an indemnity (which can vary from 2 to 6 months salary). Criminal penalties for the employer are excluded.

What are one or two most common mistakes that employers make that lead to liability for a layoff?

The main errors may be the faulty evaluation of a conduct by the employer or the failure to observe the procedure. As already mentioned, the consequence is the invalidity and/or ineffectiveness of the dismissal; however the employer’s mistake does not give rise to any specific liability (except for the manager who committed the mistake who must respond to company directors).

What other employment issues are likely to arise from a layoff in your jurisdiction that you have not addressed in your answers to the previous questions?

A general topic related to layoffs is that of public financial support for the dismissed employee (so-called “Ammortizzatori sociali”). The dismissed employee is entitled to an unemployment allowance from social security (I.N.P.S.) for a period of 8 months (12 if more than fifty years of age). The amount is equal to a percentage of gross monthly salary and has a maximum limit set by law. In order to obtain it, the worker must:

- be in a state of actual involuntary unemployment;
- have at least two years of contribution to I.N.P.S.;
- have at least 52 weeks of contributions in the two years prior to unemployment;
- have submitted a written application to I.N.P.S. within 60 days from the layoff.

Dismissal for just cause objective also gives the worker the opportunity to be inserted in the “mobility lists.” Companies that hire workers on the mobility lists benefit from important reductions in social security (I.N.P.S.) contributions.