Introduction

On March 3 2010 Parliament approved a significant piece of legislation - the Collegato Lavoro - which affects several aspects of employment law, changing certain existing provisions and introducing new regulations.

In particular, the Collegato Lavoro is important from an employer's standpoint because it extends the use of arbitration and thus allows employers to avoid legal proceedings before the labour courts, which are usually oriented in favour of employees.

The Collegato Lavoro has not yet entered into force, as it is subject to presidential review and promulgation and has not yet been published in the Official Journal. However, by the end of 2010 it will introduce significant changes in the field of employment.

Main Changes

The main changes relate to arbitration, preliminary steps in labour litigation and the dismissal appeals procedure.

Arbitration

Under Italian law, except in certain limited cases stipulated in managerial collective agreements, an arbitration clause or covenant that is intended to avoid proceedings before the labour courts is null and void.

The Collegato Lavoro allows parties to chose arbitration in place of litigation where a national collective agreement so provides. Furthermore, the parties to an individual employment contract may include an arbitration clause to apply to potential future disputes, provided that such a clause is certified by a specific commission (as required by Law 276/2003, known as the Biagi Law). However, this option must be recognized in the applicable national collective agreement; if it is not, the Labour Department has 12 months from the rule's entry into force in which to define the process for executing an arbitration clause without trade union review.

An arbitration panel must consist of three members: one appointed by each party and a third appointed jointly by the parties or, if they cannot agree, by the president of the labour court. The arbitration must be completed within 140 days and the losing party has the right to appeal.

Preliminary steps in labour litigation

Article 410 of the Code of Civil Procedure states that a party seeking to sue another party before the labour courts must request a meeting before the local labour office (Direzione Provinciale del Lavoro). The meeting allows the parties to try to settle the dispute without going to court. The procedure was introduced in an attempt to reduce the labour courts' caseload.

Such meetings are mandatory under existing law as a preliminary step towards labour litigation, but a new provision in the Collegato Lavoro makes them optional. Under the new procedure, a party wishing to seek a meeting before the labour office in order to resolve a dispute must file a statement of its claims. If the counterparty agrees to try to resolve the dispute in this way, it must file its brief within 20 days. If the parties cannot reach a settlement, the labour office can suggest terms and conditions. A party that refuses to enter into an agreement must justify its position; if it cannot do so, this will be communicated to the labour court and will weigh against it in subsequent legal proceedings

Dismissal appeals procedure

At present, an employee has 60 days in which to challenge his or her dismissal, but can sue his or her former employer before the labour courts up to several years later.

The Collegato Lavoro maintains the 60-day limit. However, the employee must file a complaint before the competent labour court within 180 days of communicating his or her challenge against dismissal. Alternatively, the employee must request arbitration or a meeting before the labour office (following the procedure explained above) within the same timeframe.

Other Changes

The Collegato Lavoro also introduces the following new provisions:

  • If a temporary employment agreement does not comply with the provisions of the law, the employee in question can (i) seek to have the employment relationship reclassified as permanent, and (ii) seek payment of all remuneration due from the end of the temporary agreement until the instatement of an employment relationship on permanent terms. The Collegato Lavoro provides that the employer must pay comprehensive indemnity ranging from two-and-a-half months' salary to one year's salary. If the applicable national collective agreement provides for the reclassification of employees previously employed under a temporary agreement, the maximum indemnity is halved.
  • Decisions may be reached on the basis of equity, not only according to the law.
  • New rules on certification of employment contracts are intended to minimize litigation arising from disputed classifications.
  • New provisions mandate the government to rule on maternity leave, early retirement for certain forms of employment, training periods, work permits and redundancy payments.

The government is also making plans to reform the Employee Statute (Law 300/1970), as it considers that the employment law framework requires further updating.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.