The Court of Appeal of Milan, in its judgment no. 470/2024, again addressed the issue of whether the income from the sale of stock options may be included in the remuneration for the purposes of calculating notice and severance pay. The Court ruled that, in the present case, the income from the stock options was of a continuous and not occasional nature and therefore was an essential part of the remuneration. The Court thus overturned the decision no. 246 of 7 May 2024 issued by the same body, triggering a discussion on the issue.
The dispute originated from an appeal by an executive dismissed for just cause. The dispute concerned, inter alia, the inclusion in the calculation of the remuneration of the amounts resulting from the exercise of stock options which the manager claimed to be part of the remuneration due to their regular and non-occasional nature, as they had a predetermined frequency, forming part of three-year or four-year plans. The Court of first instance rejected the latter argument, excluding such income from remuneration on the grounds that there was a company regulation that excluded it from the calculation of the global remuneration.
However, the Court of Appeal decided to adopt a different perspective, referring both to Article 2099 (paragraph 3) of the Civil Code, which states that «the employee may also be remunerated in whole or in part by profit-sharing or product-sharing, by commission or by benefits in kind», and Article 2120 of the Civil Code, which states that «unless otherwise provided for by NCBAs», the remuneration relevant to the calculation of severance pay «shall include all sums, including the equivalent of benefits in kind, paid in connection with the employment relationship on a non-occasional basis, with the exception of those paid by way of reimbursement of expenses».
The Milan Court therefore ruled that stock options constituted a form of remuneration by way of profit-sharing provided for by Article 2099 of the Civil Code and also stated that, pursuant to Article 51 of the Italian Income Tax Code (i.e. “TUIR”), «all sums and values in general, (…) even if they do not come directly from the employer», as could be the case with a payment made by another group company, are considered to be the employee’s income. Continue reading the full version published on Norme e Tributi Plus Lavoro del Il Sole 24 Ore.
On 29 December 2022, Italian Decree Law No 198/2022 was published in the Italian Official Gazette. This is the so-called ‘Milleproroghe Decree’ which introduces ‘Urgent provisions regarding legislative deadlines’. Article 9 of the above-mentioned Decree governs the extension of deadlines for provisions on matters within the competence of the Ministry of Labour and Social Policy.
The following provisions, in particular, are worth noting:
The jurisdiction attributed exclusively to employment consultants and to the relatively most representative employment consultants and employers’ associations with regard to the verification of the requirements concerning compliance with the requirements of the collective agreement and the eligibility of the number of requests for entry by non-EU citizens is extended throughout 2023.
The deadline by which already established solidarity Funds must adapt to the reform of social security nets introduced as of 1 January 2022 by Italian Budget Law 2022 (Legge di bilancio – Law No 234/2021) is postponed from 31 December 2022 to 30 June 2023.
Consequently, the date from which, in the absence of adaptation, the employers in the relevant sector will join the Wage Guarantee Fund (Fondo di Integrazione Salariale, ‘FIS’) is postponed from 1 January 2023 to 1 July 2023.
With reference to companies falling within the scope of application of the Wage Guarantee Fund for the Air Transport Sector and the Airport System, applications for access to the supplementary benefit under the Extraordinary Wage Guarantee Fund (Cassa integrazione guadagni straordinaria, ‘CIGS’) scheme, submitted between 1 January and 30 September 2022, are considered validly transmitted, even if received after the deadline has expired.
In addition, it is provided that supplementary benefits under the CIGS scheme may also be provided in the form of reimbursement or adjustment to the employer that advances them.
Apart from Article 9, the extension regarding the reform of sports employment should be noted.
In this regard, the decree has deferred the entry into force of the sports employment reform by six months, which is postponed from 1 January to 1 July 2023.
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