If you are considering relocating to Italy for a job opportunity, you need to understand the differences between Italian employment laws and employment protections in your home country. Below are ten essential points to assess before you enter into an employment contract, starting with a fundamental matter: make sure which law applies to your employment agreement.
Which Country’s Laws Govern the Employment Relationship?
Pursuant to the Convention of Rome of 1980 and the EC Regulation of 2008 Rome I, the law that the employer and employee select governs their employment contract. If there is no mention of a choice-of-law provision, the applicable law is that of the country in which the employee carries out his work duties or the country in which the office responsible for hiring the employee is located.
Despite the rules described above, if there is a closer connection with another country, the law of that country will apply. “Closer connection” could be defined by such parameters as the residence or domicile of the employee or both parties, the employer’s decision-making center, the language and form of the contract, the currency used for remuneration, and the place of payment.
When Italian Laws Apply
In most cases, Italian law governs employment contracts when the document clearly states the parties agree to have Italian law apply, when the employee performs the majority of his or her job responsibilities in or from Italy, the process of hiring the employee was carried out from the employer’s Italian headquarters, the employment relationship is closely connected to Italy.
Relocating from a European or Non-European Country
Citizens of European countries do not need a work permit or work visa for regular employment in Italy. By contrast, citizens of non-European nations may accept employment in Italy by obtaining proper work permits and visas.
Non-EU citizens must first obtain the necessary documents from their new Italian employer that indicate the employee is entering the country for work reasons. After reviewing those documents, the Italian Police Headquarters will issue a work visa to non-EU employees who sign a special residence contract for work required by the Office for Immigration. The employer must send all the requisite administrative paperwork to the Immigration offices before the employee enters the country to work.
This work visa is valid equal for the duration of a person’s employment in Italy, not exceeding one year for a fixed-term contract or two years for an indefinite period.
The Importance of Collective Bargaining in Italy
In Italy, employment matters are ruled by law, but more specifically, they are ruled by national collective agreements that regulate all aspects of the employment relationship, including executives working in the trade and industrial sectors.
Your Rights During the Employment Relationship
Besides all the rights that usually belong to all employees (such as paid time off for vacations and holidays, sick leave pay, Christmas bonus, maternity leave, etc.), executives may be entitled to additional advantages under an employer’s company’s benefits program, including:
- Private Insurance: Although Italy has is a good national public health system, it is advisable for employees to obtain private insurance through their employers to provide additional coverage and guarantees in the event of illness;
- Training and Managerial Development: Many companies invest in seminars, conferences, workshops, and education programs to improve employees’ skills;
- Fringe Benefits: Executives often enjoy a company car, mobile phone, housing, and other amenities paid for by their employers.
There are obvious advantages to having an employer cover these kinds of expenses, but before signing a contract, employees should make sure these items are included and well-defined.
Managerial Transfers
Managers can be transferred from one job site to another for technical, organizational, and productive reasons, as long as those transfers comply with notice periods established by the National Collective Labor Agreement and which take into account the existence of family members and dependents. In some collective agreements, refusing a transfer constitutes the employee’s resignation with the right to a predetermined severance arrangement.
Terminating Your Employment Contract
An employment relationship can end by consensual termination, dismissal, voluntary resignation, or resignation for just cause. Employees should pay close attention to termination clauses in their employment agreements. Some termination provisions refer to collective agreements, and for executives, seniority and the number of years of service to the employer is used to calculate notice requirements.
Dismissal of an Employee Is Different from Dismissal of a Manager
Because of the specific nature of an executive’s job duties at a company, dismissal of a manger is subject to different termination definitions.
In Italy, an employer can fire a non-manager employee for:
- Objective Just Reason, such as when the employer dismisses the employee for reasons related to performance, productivity, organization of work, and the functions of the job;
- Subjective Just Reason, such as when the company dismisses the employee based on issues with the employee’s character. This is usually a disciplinary dismissal, but it doesn’t rise to a level that justifies dismissal without notice;
- Just Cause, such as when the company dismisses the employee because of a serious revelation or situation that severely compromises the parties’ trust. Because the circumstances are considered so serious that even a temporary continuation of the employment relationship is not acceptable, the company need not provide any notice to the employee.
For executives, the termination process is much simpler because a manager’s misconduct can easily cause serious damage to the employer. This does not mean that the manager is without protection against dismissal (protection granted by collective bargaining), but the dismission must be justified. According to the Italian Court of Cassation, “justified dismissal” requires that the reason for termination is sufficiently important, clearly and coherently articulated, and pursuant to the law. An explanation with specific details is unnecessary; an employer may give a general statement that demonstrates the dismissal is not arbitrary.
Your Rights in the Event of a Dismissal
If an employee or executive is terminated, the employer must state the reasons for the dismissal in writing, provide the proper period of notice, and indicate the person’s last day of work. The employer can prevent the employee or manager from working during the period of notice, but must provide him or her with compensation for the full notice period.
With an unfair dismissal, the employee or executive should consult a lawyer who specializes in employment law and labor procedure of the Italian courts.
Tax Benefits
Besides compensation and benefits, a foreign national working in Italy may enjoy reduced taxes, which may occur if he or she:
- Has not resided in Italy in the five fiscal years before starting employment;
- Plans to live and work in Italy for at least two years;
- Works for an employer organized, incorporated, or operating in Italy;
- Works in a supervisory role or possesses superior qualifications or specialization.
Qualifying employees are taxed on only 70 percent of the income they earn in Italy.
Because Italy is a significant contributor to the world economy, the presence of foreign workers in Italian companies is common. Those thinking of moving to Italy for employment, however, must know the distinctions between local labor laws and those of their home countries.
Cristiano Cominotto
A.L. Assistenza Legale
