A new Economic Collective Agreement which regulates the relationships between agents, sales representatives and principals of the industrial and cooperation sector, has been signed by the representative associations of the parties (Confindustria, FNAARC and other associations). The new Economic Collective Agreement (Accordo Economico Collettivo “AEC”) entered into force on 1 September 2014, replacing the agreement of 20 February 2002 and applies to contracts signed after 1 September 2014.

Collective agreements of this kind are typical of the Italian system and are concluded between the organizations of principals and agents in order to regulate several aspects of the agency relationship such as the unilateral modification of the contract and the calculation of the goodwill indemnity. They generally apply to agency contracts only where both parties are members of the signatory representative associations. In the case of foreign principals and Italian agents, collective agreements should in principle only apply if they are referred to in the agency contract.

The new AEC introduces several innovations to the previous agreement, some of which are summarized below.

First of all, new criteria to determine the meritocratic indemnity are set forth in Article 11 of the AEC. This new provision on the meritocratic indemnity will not apply until 31 December 2015 to contracts already in force on 30 July 2014 and signed before 1 January 2014. After 31 December 2014, the new provisions will apply to such contracts, only if they will remain in force for at least five additional quarters (after 1 January 2016).

Secondly, the period after the termination of the contract during which the agent is entitled to the commissions for business transactions which have been in progress at the time of termination, has been increased from 4 to 6 months after the termination of the contract.

Relevant to note is that the principal retains the right to make unilateral reductions of territory, customers, products and commissions within certain limits which have been now modified. In particular, “major” variations are now considered the reductions between 5% and 15% of the commissions due to the agent during the preceding year (the limit in the previous agreement was between 5% and 20%).

The new AEC also provides that several small reductions (up to 5%) must be considered and regulated as an overall variation if they occurred during a certain period which has now been increased from 12 to 18 months before the variation.

Finally, several other provisions of the precedent Economic Collective Agreement of 2002 have been redrafted and made more plain and accurate. A full copy of the new AEC is available here.