Under Italian law an individual may work either as an employee in a position of "subordination" ("employment relationship") or as an independent contractor ("self-employment relationship") under the terms of a service agreement.

In addition, in the Italian legal system, there is another kind of employment relationship that is between the typical employment and self-employment relationship - known as "parasubordinate" work (so called "continued and coordinated collaboration"). This latter relationship is formally considered as self-employment even though the worker is subjected to a specific "protective" control for some aspects, similar to that for the subordinate employment relationship. As such, in some cases, it is not always easy to identify whether there is an employment or parasubordinate relationship.

The typical "parasubordinate" relationship under Italian law is the sales agency relationship.

The sales agent is a person who undertakes to promote sales of products in the interests of a company within a specific territory in return for compensation. The agency agreements may be executed for a definite or an indefinite term. In the case of a fixed-term contract, the agency relationship cannot be lawfully terminated by the parties before the expiry of the term, unless a serious breach of contract occurs (so called "cause” for termination). The indefinite-term agency contract, instead, may be terminated at any time by either party giving the requisite notice to the other party. As for remuneration, the agent must be compensated with a percentage on the value of the sales contracts they were able to procure.

In addition, on termination the agent is entitled to an indemnity by the Principal, provided that:

  • the agent procured new clients (or increased the business with the existing clients assigned to them) for the Principal who continues to receive benefits from those clients, and
  • the payment of such indemnity is fair considering all the circumstances of the case.

Having said this, it is very common for self-employed/parasubordinate individuals to claim to be considered ordinary employees of the company, with consequences in terms of salary differences, social security coverage and access to the overall terms and conditions applying to typical subordinate employees.