Italian Decree-Law no. 19/2024 (converted by Italian Law no. 56/2024) increased penalties for unlawfully carrying out staff supply work, contracting and secondment by expanding the cases for which there are criminal penalties.
In summary, contracting, secondment, and staff supply work are considered unlawful when workers are used without meeting legal requirements, for evasive purposes, and without the contractor, seconding party, or staff supplier exercising managerial and organisational powers.
On this point, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) first intervened in note no. 1091/2024 to clarify the exact amount of the applicable fines and the complex recidivism mechanism. Subsequently, in note no. 1133/2024, the INL examined the transitional regime for the application of the new penalties.
On the latter point, the INL has clarified that the new criminal penalties apply in relation to conduct that took place on or after 2 March 2024, the effective date of Italian Decree-Law no. 19/2024. For conduct that started and finished before 2 March 2024, on the other hand, the previous penalty regime of an administrative nature, regulated by Circular no. 6/2016 by the Ministry of Labour, applies.
However, the real issue, which has now been clarified, relates to conduct straddling the enactment of Italian Decree-Law no. 19/2024. The INL has confirmed that conduct started before 2 March 2024 and continued after that date is exclusively criminal in nature and therefore is subject to the penalties established by the new penalty regime.
In addition, the INL has also clarified that in determining the applicable penalty, which is linked to the number of days of unlawful employment of personnel, due to the possible alternatives of imprisonment and fines, periods prior to 2 March 2024 should also be considered. This is because the days of employment are relevant in assessing the seriousness of the offence, which, in turn, determines a proportional and “mandatory” sanction which is predetermined by reason of the workers involved and the number of days and constitutes a mere instrument to quantify fines with reference to conduct that must necessarily be considered as a single offence.
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In judgment no. 8956 of 4 April 2024, the Italian Court of Cassation addressed the issue of whether dismissal of an employee for taking unjustified absence on a public holiday is unlawful.
An employee initiated legal proceedings to obtain a declaration that her dismissal was unlawful. The disciplinary offence alleged against her was “unjustified absence for more than three days, including non-consecutively, in a two-year period”. In the proceedings, she argued that the dismissal was unlawful for having included a Sunday as a day of absence. The Italian Supreme Court upheld the worker’s application, stating that “unjustified absence from work under Article 55-quarter, letter b, of Italian Legislative Decree no. 165 of 2001 presupposes that the worker did not attend and failed to perform work on a day when he or she should have done so. This requirement is not satisfied if [the day of absence] is a public holiday, on which the worker was not obliged to go to work, regardless of the absence of a valid justification for the absence from work on the days immediately before and after the public holiday”.
With judgment no. 16630 of 14 June 2024, the Italian Court of Cassation ruled that to reinstate the employment relationship under Article 18, paragraph 10, of the Workers’ Charter, it is sufficient for the employer to send the notice of revocation of dismissal within 15 days of the notice of dismissal, although it is not necessary for this notice to be received by the employee in the same time frame.
An employee was dismissed for justified objective reasons by letter of 17 January 2018. The worker challenged the dismissal with a certified email sent to the company on 13 February 2018 and received by the employer on the same date.
On 1 March 2018 the employee received a telegram, sent to her by the company on 28 February 2018, revoking the dismissal and containing a request to return to work.
The employee claimed that the revocation was late and did not comply with the employer’s request.
Due to the worker’s unjustified absence which lasted for more than three days, the company dismissed her for just cause.
The employee brought legal proceedings, objecting to the lateness of the revocation of the first dismissal, as it had been received by her after the deadline of 15 days for challenging the dismissal.
The first instance judges as well as the court of appeal rejected the applicant’s claims. They noted that the revocation of the first dismissal was to be considered in time, since – in terms of revocation of the dismissal – the “principle of splitting the effective date of the document” (principio di scissione degli effetti dell’atto) applies.
The Italian Court of Cassation – in confirming the ruling of the court of appeal – noted, preliminarily, that revocation of dismissal, introduced by Italian Law no. 92/2012 and governed by Article 18, paragraph 10 of the Workers’ Charter is the employer’s unilateral right to safeguard his/her own rights and to which the worker is subject.
According to the Court of Cassation judges, this is a sort of “self-defence” (autotutela), which can be exercised by the employer, which results in the reinstatement of the relationship without interruption and without the need for a similar indication of consent by the employee.
The only necessary condition established by the law is that the revocation is carried out within 15 days of the notice to the employer that the dismissal is being challenged.
The Italian Court of Cassation judges held that, starting from an analysis of the wording of the provision – which anchors the start date (dies a quo) to the notice of the dismissal challenge and the expiry date (dies ad quem) to the date of the revocation, the absence of an express reference to the notice to the concerned party, “leads us to consider that the mere sending of the revocation to the worker within the prescribed period and not its receipt within the same period is sufficient”.
Other related insights:
In note no. 1091/2024 of 18 June 2024, the INL provided the first operational guidelines on the changes introduced by Italian Decree-Law no. 19/2024 regarding the sanctions regime for unauthorised staff supply work, contracting and secondment.
Article 29, paragraph 4 of Italian Decree-Law no. 19/2024 has, in fact, reinstated the criminal offences of unlawful staff supply work, contracting and secondment. It has introduced the alternative or joint penalty of arrest or fine where “staff supply work is carried out with the specific purpose of evading mandatory legislative provisions or of the collective agreement applied to the worker”.
The INL notes that “in relation to the correct determination of the amount of fines to be applied when alleging breaches, it is necessary to take into consideration the provisions of Article 1, paragraph 445, letter d), point 1, of [Italian] Law no. 145/2018. […] This provision was only partially amended by [Italian] Decree-Law no. 19/2024 – with the increase from 20% to 30% of the amounts of the so-called maxi-sanction for ‘off the books’ work – thereby confirming the effectiveness of the 20% increase already provided for in relation to the cases referred to in Article 18 of [Italian] Legislative Decree no. 276/2003”.
This increase must also be applied to the new fines provided for by Italian Decree-Law no. 19/2024.
By way of example, in relating to carrying on unlawfulstaff supply work “punished by imprisonment for up to one month or a fine of EUR 60 for each worker employed and for each day of work” of five workers for 20 working days each, the fine is calculated as follows:
In these operational guidelines the INL also deals with repeat offences, for which a series of increased sanctions are provided for, as well as in the case of aggravating circumstances in the case of exploitation of minors.
Other related insights:
With judgment no. 7190 of 18 March 2024, the Italian Court of Cassation addressed the issue of the validity of a resignation submitted by an employee under threat of dismissal by the employer.
The employee initiated legal proceedings to have his resignation declared null and, in the alternative, void and to obtain a finding that the employment relationship had continued without interruption, with the right to the salaries accrued in the meantime. This was on the grounds that he had been forced to submit a letter of resignation completed under the duress from two company managers, who threatened him with prejudicial consequences. The Italian Court of Cassation ruled that if an employer was not entitled to dismiss an employee due to the non-existence of the alleged breach, the resignation tendered by the employee under threat of dismissal can be annulled on the grounds of moral unfairness. In this case, the worker’s resignation is based on intimidating and objectively unfair conduct, which constitutes psychological coercion and revokes consent.
