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By Avv. Carlo Bottino


For each industry sector there is a National Collective Bargaining Agreement (hereinafter, also, “NCBA”) that regulates the employment relationship.

Companies with more than 15 employees come under the umbrella of the Workers’ Statute

Italian labour laws and National Collective Bargaining Agreement provisions may only be amended by employers in a more favorable way for the employees.

The collective dismissal procedure shall be followed when at least 5 dismissals for economic reasons will be served within 120 days by a company with more than 15 employees.

Executives are included in the calculation that triggers a collective dismissal.

The obligation to give a reason for entering into a fixed-term contract has been re-introduced for such agreements, if exceeding 12 months.

Reinstatement is no longer the sole remedy for unfair dismissal.

1) The pay

The CCNL Tertiary Executives provides a minimum salary for the Executive, much lower than the basic salary indicated in the recruitment offer.

In particular, for the calculation of the compensation due to the Executive in the event of termination of the relationship, the total remuneration shall always be taken into account, which shall consist not only of the basic remuneration, but also by the monthly average of variable wages and the monetary value of any benefits (car, accommodation etc).

At the end of the relationship, the Manager is always due (even in case of resignation or dismissal) the Severance Pay (TFR), roughly equal to 13.5% of total salary received in the year. The base for calculating TFR usually includes all salary and benefits in kind, which form part of regular retribution, whereas extraordinary amounts such as stock related benefits are excluded, as are refunds of expenses incurred in connection with the employment.

As mentioned, the 13.5% is due on termination of the employment relationship. Each year the employer makes an accrual to a balance sheet the reserve for the amount due to all employees. The amount so reserved will be paid over the employee on termination. In certain circumstances and after a certain period of employment (typically 8 years) the employee is able to request an advance of the TFR, where justified by reason of purchase of a principal residence (for the employer or their children), serious medical expenses.

You will also have the right to opt to transfer the annual TFR accrual into a supplemental regulated Italian pension scheme. Your employer will ask you to make the choice on a form provided during the hiring process, but the choice can be made within six months of the date of hire. If you decide not to opt for the supplemental pension contributions, then you can change your mind at any time, whilst a choice to make pension contributions is final and cannot be reversed.

2) Duration
The Parties may agree on a time limit for the duration of the relationship. If there is no fixed period (as in this case) the relationship is indefinite.

3) Probationary period

The Parties may agree to a trial period, not exceeding six months, which in this case is not provided for.

4) Vacation
The CCNL stipulates that the Executive is entitled to thirty days’ annual leave. Sundays falling within a holiday period are excluded during that period shall be excluded. Public holidays and a number of days for public holidays that have been abolished, are extra on top of the 30 days period.

The Manager can waive the holidays only for days exceeding four weeks.

For unused holidays, the Manager is entitled to an allowance equal to his daily salary (calculated by dividing their total monthly salary by 26)

Illness suspends the holiday period.

The Parties may agree on better terms.

Company policy may dictate that part (up to one half) of the total holiday entitlement is taken during a certain period of the year (e.g. during August when the offices are closed).

5) Illness
During illness the Manager can be dismissed only for disciplinary reasons, not for organizational reasons.

This right to return to work is guaranteed for a maximum period of 240 days (extendable in case of particular pathologies).

6) Marriage
In case of marriage, the Manager is entitled to 15 calendar days of paid leave

7) Unpaid leave
The Manager can request to take unpaid leave for a maximum of six months.

8) Transfer

The Manager can be transferred only for proven technical, organizational and productive reasons of the company, with a notice of at least three months – four months if they have dependent family members.

All costs associated with the transfer shall be borne by the employer.

The Manager has the right to refuse the transfer and resign within 60 days of the communication sent to him by the employer if the transfer leads to a deterioration of his position (for example, a movement greater than 350km). In this case, the Manager is entitled to severance pay and compensation in lieu of notice in the event of dismissal.

9) Change of position

If the Manager resigns in the event of a change in his duties that worsens his position, he is entitled to severance pay and compensation in lieu of notice in the event of dismissal.

10) Resignation of the Director

The Manager can always resign, without the obligation to provide the reason for his decision, with a variable notice depending on the length of service. In particular, the minimum notice is equal to

– 2 months: up to two years of service,

– 3 months: two to five years of service;

– 4 months: over five years of service

The period of notice starts on the 1st or 15th day of the month (depending on whether the resignation is made in the last fortnight of the previous month or in the first fortnight of the following month).

If the Manager does not provide services during the period of notice, the employer is entitled to withhold an amount equal to the remuneration of the period not worked.

If the employer decides that Manager should not work during the period of notice, the employer must pay the corresponding remuneration.

11) Resignation of the Director for just cause

If the Manager resigns due to a serious default of the employer, they are not required to give any notice and can appeal to the Judge to obtain payment of:

  1. i)  an allowance equal to six months of total salary (which increases further and progressively for seniority of more than four years);
  2. ii)  an additional allowance equal to one third of the amount referred to in point i).

12)Dismissal of the Manager for organizational and economic reasons (justified objective reason)

If the employer decides to terminate the Manager’s employment, the Manager in any case is entitled to prior notice, equal to:

– 6 months: up to four years’ service,

– 8 months: four to ten years’ service;

– 10 months: 10 to 15 years’ service;

– 12 months: over 15 years of service.

As with resignation, dismissal also starts on the 1st or 15th day of the month.

If the employer decides that Manager should not work during the period of notice, the employer must pay the corresponding remuneration.

The Manager may waive the performance of services during the period of notice, but in this case he will not be entitled to any compensation.

13) Dismissal of the Manager for minor defaults (subjective reason justified)

The Manager shall in any case be entitled to notice or to the corresponding compensation.

14)Dismissal of the Executive for serious defaults (just cause) The relationship terminates immediately. The Manager has however the right to the termination salary

15) Unjustified dismissal

If the Director challenges the notice of dismissal given to them and a Tribunal or an Arbitration Committee accepts their objections, the employer will have to pay in addition to the compensation in lieu of notice (if not already paid), an additional allowance, calculated as follows:

– 4 to 8 monthly instalments of total earnings for a period of less than four years; – 6 to 12 months’ total earnings for a period of less than six years;
– 8 to 14 monthly instalments of total earnings for a period of less than 10 years; – 10 to 16 monthly instalments of total earnings for a period of less than 15 years; – 12 to 18 monthly instalments of total earnings for a period of more than 15 years.

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