Article 2094 of the Italian Civil Code outlines two specific criteria that distinguish subordinate work from self-employment: "direction" and the worker’s "subordination" to the employer. Unlike these criteria, factors such as pay and collaboration are shared between both types of work and do not differentiate them. To determine the nature of the employment relationship, it is crucial to precisely define the concepts of “direction” and “subordination”.
Direction
According to the definition provided by the Court of Cassation, determining whether an employment relationship qualifies as self-employed or subordinate hinges on investigating the presence of subordination. Subordination is defined as a personal bond that places the worker under the managerial authority of the employer and is of utmost importance in making this distinction (Cass. S.U., 30 June 1999, no. 379). This element of subjection encapsulates the concept of hetero-direction, indicating that the provider must comply with the employer's directives outlined in the employment contract. The employer's ability to issue orders and instructions to the worker stands out as the defining characteristic of subordination. It is worth noting that the manifestations of hetero-direction are adaptable based on the specific tasks required of the worker. In certain cases, such as with high-level professionals (those in managerial roles) or less skilled jobs like cleaning, where the job tasks are relatively simple and do not necessitate detailed instructions from the employer, the nature of hetero-direction may vary. This variability in the extent of hetero-direction across diverse job roles has led some legal experts and scholars to develop the concept of "attenuated subordination."
Subordination
Jurisprudence often addresses the element of subordination with less scrutiny than hetero-direction, treating it as either synonymous with hetero-direction or as a term used to bolster its significance. In contrast, a segment of legal scholars, influenced by a Constitutional Court ruling (5 February 1996, no. 30), argues that dependence plays a crucial role in determining the nature of the employment relationship.
The criteria for determining subordination established by legal precedents
The challenge of identifying the subordinate nature of a relationship using the defining elements outlined in Article 2094 of the Italian Civil Code has led to the creation of Practical Indexes designed to aid in the qualification of the relationship. It is important to note that these indexes serve as helpful "clues" that simplify the qualification process, but none of them can claim to be entirely comprehensive when evaluating specific cases.
Some of the commonly utilized indexes include:
- Worker's subjection to employer's managerial powers (following instructions), control (monitoring current and future tasks), and disciplinary actions (applying sanctions for work non-performance).
- Employee's integration within the company's production structure.
- Use of professional tools provided by the employer for service performance.
- Lack of business risk for the employee (ensuring payment regardless of the employer's economic outcomes resulting from the service).
- Regular, periodic remuneration.
- Requirement to inform the employer about attendance and absences from the workplace.
- Adherence to specified working hours.
- Need to coordinate leave periods with the employer.
It is crucial to emphasize that these indicators, while valuable, are not exhaustive. Consequently, depending on the specific nature of the activity, the case law often employs alternative and diverse indicators to ascertain the presence of hetero-direction and dependence elements.
The reforms implemented under the Jobs Act
As part of the recent labor law reform initiated after the enactment of Delegated Law No. 183 of 2014, commonly known as the Jobs Act, the Government introduced Legislative Decree No. 81 of 2015, effective from 25 June 2015. This decree significantly overhauls the regulations concerning collaboration contracts and introduces certain provisions that could impact the prevailing concept of subordination in practice. One of the key aspects of this decree was the repeal of all regulations outlined in Legislative Decree No. 276 of 2003 governing project work contracts, except for the coordinated and continuous collaboration contracts specified in Article 409 of the Civil Procedure Code.
Among the repealed rules was Article 69 bis of Legislative Decree No. 276/2003, introduced in 2012 under the Fornero law to combat the issue of false VAT numbers. This article presumed that under specific conditions, services provided by individuals with a VAT number constituted a coordinated and continuous collaboration relationship. With the abolition of these rules, certain minimal protections previously extended to project-based workers and those with VAT numbers were eliminated. To partially counterbalance this setback in protections for precarious workers, a new presumption of subordination was introduced under Article 2 of Legislative Decree No. 81/2015. Starting from 1 January 2016, this provision stated that the regulations of subordinate employment also apply to collaboration relationships involving exclusively personal, continuous work services, organized by the client, including specifications about time and location of work.
This rule was later modified by Law 128/2019, which expanded its scope by replacing "exclusively" with "predominantly" and removing references to time and place of work. For the regulations of subordinate employment to be applicable, the following conditions must now be met:
- The service is predominantly carried out personally.
- The service is continuous.
- The service is organized by the client.
These three conditions effectively serve as indicators of subordination, supplementing and sometimes overlapping with those established in recent years by case law. However, to evaluate the potential influence of these new indicators on the legal concept of subordination and whether they might broaden its scope, it is essential to await the initial rulings from the courts and the Supreme Court.
Furthermore, the new law allows parties to request certification from the commissions mentioned in Article 76 of Legislative Decree No. 276/03 to confirm the absence of conditions necessary for the application of subordinate employment regulations. In such cases, the worker can be represented by a trade union representative, lawyer, or labor consultant.
What does employment consist of?
Considering that all contracts must clearly outline the general methods of performing work activities, including working hours and location, as well as other contractual aspects, such as duration, various types of subordinate employment contracts exist in Italy. These can be categorized as follows:
- Contracts defined by their duration, such as permanent or fixed-term contracts.
- Contracts with flexible working hours, like part-time or intermittent employment contracts.
- Contracts with educational value, such as apprenticeships.
- Workplace-based contracts, such as teleworking.
- Contracts involving a third party, such as employment agencies in leasing contracts.
It's worth noting that a contract between parties may fall into multiple categories simultaneously. For instance, a part-time contract could be either fixed-term or indefinite. However, specific clarifications are needed for occasional ancillary work, commonly known as voucher work. Unlike traditional contracts that result in a monthly paycheck, this type of contract regulates activities conducted outside typical employment contracts (subordinate or self-employed) and is compensated through vouchers.
Internships, despite being a significant means of integrating young individuals into the workforce, do not fall under subordinate work.
What are CCNLs?
The National Collective Labour Agreement (CCNL) is established to govern relationships between employers and employees within a specific category on a national scale. It is termed "collective" because it applies universally to all workers covered by the contract and "national" because it is valid across the entire territory.
The CCNL results from an agreement reached between social partners and is negotiated at the national level between employers' associations and the most representative national trade unions. Periodic meetings between these two parties are held to discuss the contract's contents, regulating the employment relationship both in terms of regulations and economics. Prior to 2009, the economic portion of the CCNL was renewed every two years to ensure the protection of real wages. Conversely, the regulatory part typically had a duration of four years. However, as the contract duration is determined by the involved parties, the current national collective agreement spans three years for both its regulatory and economic components.
How is the employment contract concluded?
For an employment contract to be deemed valid, specific fundamental conditions must be met, beginning with the mutual consent of both parties. It is important to note that recent legislative changes have established a dual requirement for the minimum age to enter into an employment relationship: compliance with the legal minimum age and the completion of compulsory education, resulting in an increase in the minimum age threshold to 16 years.
The employment contract must explicitly outline the worker's assigned tasks and include all necessary details to regulate the employment arrangement. This information encompasses the job description, classification, commencement date of the relationship, any information regarding the probationary period, compensation details, work location and hours, vacation days, permits, as well as notice periods in case of termination. However, certain specifics can be omitted with reference to the relevant National Collective Labour Agreement (CCNL), although the conditions established in the employment contract can never be inferior to those outlined in the corresponding CCNL.
By law, the employee is obligated to execute their duties with the diligence expected for the service and adhere to the employer's regulations and disciplinary measures. Furthermore, the employee is required to maintain loyalty and confidentiality; hence, they should not engage in competing business activities or disclose information that could harm or jeopardize their current employment. Both parties can also agree, in writing, on a non-compete agreement, governed by Article 2125 of the Civil Code.
What is the trial period?
The employment contract can include a probationary agreement wherein the actual employment of the employee is contingent upon a specific probationary period. This period is beneficial for both parties, allowing the employer to assess the employee's abilities and the employee to understand the expected performance. During this agreed period, either party can terminate the contract without the obligation to provide notice or compensation.
The duration of the probationary period is typically outlined in the relevant collective agreement and, by law, cannot exceed a maximum of six months. Occasionally, the contract may specify a minimum duration for the probationary period. If a minimum duration is specified, termination cannot occur before the term ends, except for valid reasons. If neither party terminates the contract after the probationary period, the employment relationship continues regularly, and the services provided during this period are considered part of the employee's seniority.
Throughout the probationary period, the worker is entitled to receive a salary not less than the minimum wage set by the relevant category's National Collective Labour Agreement (CCNL). The contract must also include provisions for severance pay, paid holidays, deferred monthly payments, and any annual bonuses for both probationary and permanent employees.
It is crucial to note that for the probationary agreement to be valid, it must be established in writing. Consequently, it would be illegal for an employer to terminate an employee for not passing the probationary period if this condition is not clearly documented in writing.
Rights and duties of employees
Below are the key entitlements (and responsibilities) afforded to employees:
- Compensation: According to constitutional provisions, remuneration must be proportionate to the quality and quantity of work performed, ensuring a free and dignified existence for oneself and one's family.
- Working Hours: The standard working time is set at 40 hours per week for full-time contracts. Any hours worked beyond this, even within the 40 hours per week, are considered additional work; those exceeding 40 hours qualify as overtime, which is compensated at an increased rate. The average duration of the maximum weekly working time, including overtime, generally should not exceed 48 hours, unless specified otherwise in collective agreements.
- Weekly Rest: Employees are entitled to a weekly rest period lasting at least 24 consecutive hours, typically coinciding with Sundays. Legislative changes since 2008 allow for shifts extending beyond six consecutive workdays, provided the employee receives at least 48 hours of rest within a 14-day period.
- Holidays and Public Holidays: Employees are granted holidays and public holidays as per legal provisions and relevant national collective agreements. Every employee, regardless of job type, classification, or category, is legally entitled to a paid leave period of at least four weeks, which generally cannot be converted into monetary compensation except in special cases.
- Special Leaves: Various types of leaves such as marriage leave (lasting 15 days), maternity, paternity, and parental leave are provided, with specific protections outlined in the Consolidated Law for the Protection and Support of Maternity. These protections extend not only to natural maternity but also to foster care and adoption situations.
- Right to Education: Employees have the right to pursue educational opportunities.
- Illness and Work-related Accidents: Provisions are in place for dealing with illnesses and accidents that occur in the workplace.
- Workplace Safety: Employers are obligated to implement necessary measures to ensure the health and physical well-being of employees, adhering to the provisions of the Consolidated Law on Safety at Work.
- Trade Union Rights: Workers have the right to join trade unions, express their opinions, and engage in union activities. The law also recognizes the right to strike, even though remuneration might be suspended during this period.