In our legal system, the issue of contracting-out and agency work has always been the focus of attention by the legislator in the field of employment law. Not surprisingly, one of the first employment laws to accompany the Italian Civil Code was Italian Law no. 1369 of 1960, which enshrined the prohibition of intermediation and interposition in employment relationships.
The legislation, after having remained essentially unchanged for almost 40 years, has undergone a certain revitalisation since the so-called Treu Law of 1997, which introduced temporary work, and the Biagi Law of 2003, which better regulated when and how there may be a disjunction between the formal employer and the beneficiary of the work provided.
Until a few years ago, the consequences of the unlawfulness of a sub-contract for the principal company – outside the exploitation scenario that constitutes the offence of ‘caporalato’ (an illegal form of employment intermediation) – were always of a purely financial nature and consisted in the payment of administrative penalties for failure to pay contributions and failure to directly employ the personnel used in the sham contract.
For some time now, on the other hand, compliance with the above-mentioned requirements which permit the use of contracting out has become even more important because of two recent case-law developments.
The first was about dismissal. Under this approach, the Italian Court of Cassation held that the principal, as the substantive employer in the case of a sham contract, cannot rely on dismissals made by the contractor, the actual employer.
Read the full version on Il Sole 24 Ore.