ITALY: An Introduction to Employment

Italian Labour Market Overview in Numbers 

According to ISTAT (Italian National Statistics Institute) employment data updated to January 2024, comparing the quarter November 2023 to January 2024 with the previous quarter, the level of employment increased of 0.4%, amounting to a total of 90,000 persons. The employment growth observed in the quarterly comparison is associated with a decrease in the number of job seekers (-3.5%, or -67,000) and stability in the number of persons not actively seeking employment.

The number of employed persons in January 2024 exceeded that of January 2023 by 1.6% (+362,000). The increase involves men, women and all age groups except 35 to 49-year-olds, due to the negative demographic dynamics. Compared to January 2023, there was a decrease in the number of job seekers (-8.1%, equal to -162,000) and the number of persons aged 15 to 64 not actively seeking employment (-1.3%, corresponding to -157,000 individuals).

Legislative Changes 

In 2023 several legislative changes affected Italian Labour Law, which are expected to have a significant impact on the Italian employment market in 2024.

Specifically, the most important variations concern the reform of fixed-term employment contracts, the simplification of the minimum mandatory requirements to be included in employment agreements during the hiring phase introduced in 2022, the implementation of the Directive (EU) 2019/1937 regarding the adoption of whistleblowing reporting channels, the strengthening of the legislation related to diversity and inclusion and health and safety in the workplace.

Fixed-term Employment Contracts 

Law Decree No 48/2023, issued by the Italian Government on 5 May 2023, introduced relevant modifications on several employment law matters. The most innovative change is the amendment of fixed-term employment contracts. It is still possible to enter into fixed-term contracts without any specific reason, only for contracts of up to 12 months duration. After this term, the fixed-term contract may be extended or renewed only up to 24 months and subject to the presence of at least one of the following conditions related to:

- a condition established by collective bargaining agreements (at national, local, or company level);

- technical, organisational and production reasons identified by the employer and employee in the individual employment contract, in the absence of regulation by collective bargaining agreements (this option is granted only until 31 December 2024);

- as a replacement for other employees (as already previously provided by the law).

Moreover, it should be noted that the amendment also provides that fixed-term contracts entered into before 5 May 2023, are not to be considered for the purposes of the 12-month period after which fixed-term contracts are required to indicate a specific reason grounding the fixed term.

Employment Contract Simplification 

In Italy, individual employment contracts must contain minimum requirements. Firstly, according to Article 1 of the Legislative Decree No 152/1997, as amended by the Legislative Decree No 104/2022, implementing Directive (EU) 2019/1152 on transparent and predictable working conditions, the employer must provide the employee with certain specific information at the commencement of employment and prior to the start of the work.

For simplification purposes, the Decree has provided for a reduction and a simplification of some of this information. In particular, Article 26 (1), specifies that some of the information may be provided by merely by making reference to the Law and the collective agreement applied, also at the company level.

Whistleblowing  

Legislative Decree No 24/2023 implements in Italy the European directive (EU) 2019/1937 on the protection of persons who report breaches of European Union law and includes provisions related to the protection of persons who report violations of national laws (“whistleblowers”).

The new rules aim to ensure a more effective legality and transparency control within the company.

The Decree provides that all public and private entities with more than 50 employees, as well as those operating in certain and specific sectors and those adopting organisational and management models pursuant to Legislative Decree No 231/01, irrespective of the number of employees, must have both internal and external reporting channels, ie, systems for receiving and processing information entrusted to independent authorities. The list of violations that can be reported includes all infringements of a criminal, administrative, accounting or civil law nature according to national or EU regulatory provisions that harm the public interest or the integrity of the private entity.

Moreover, the protection offered by the law is no longer provided only towards the whistleblower but also to persons who have "facilitated" the whistleblowing or, again, to those who have made a public disclosure without going through internal or external whistleblowing channels, under certain conditions established by the law. The new obligations came into force on 15 July 2023, for large companies, and on 17 December 2023, for companies in the private sector employing less than 250 employees.

Considering the significant impact of the new regulation, the Italian Anti-corruption Authority (ANAC) issued detailed Guidelines concerning these new whistleblowing measures as set forth by Legislative Decree No 24/2023 in order to provide practical instructions for companies to comply with the new rules.

Diversity and Inclusion 

Italian employment law has recently experienced an acceleration, modernisation and consideration of topics like diversity inclusion, equality, and sustainability, pushing companies to acquire greater awareness of social issues and embrace cultural and organisational change, in order to build more inclusive and equal working environments, in line with goals set by the Next Generation EU and the Italian Recovery and Resilience Plan and also SDGs outlined by the UN.

For this reason, according to Article 46 of Legislative Decree No 198/2006, as amended by Law No 162/2021, all companies with more than 50 employees are now required to submit to the Ministry of Labour a biennial report providing details on their headcount structure (smaller companies may elect to do so). The objective of the report is to provide a "snapshot" of the organisation, with reference to numbers of male and female employees in different positions and hierarchical levels, as well as their respective salary conditions, while at the same time gathering information on actions taken to reduce the gender-pay gap and to ensure equal working conditions. In addition, companies submitting this report can apply for the Gender Equality Certification, according to Article 46-bis of Legislative Decree No 198/2006, as introduced by Law No 162/2021. By ministerial decree of 29 April 2022, the UNI PDR 125 document was implemented as the reference for National Gender Equality Certification. The benefits of obtaining the Gender Equality Certification are significant, not only for reputational reasons, but also because companies can obtain a preferential score in funding applications and public tenders, as well as social security relief.

With the entry into force of the new "Public Contracts Code" (Legislative Decree No 36/2023) contracting authorities indicate in their notices a higher score linked to the possession of gender equality certification. Moreover, with Message No 4614 of 2023, the National Social Insurance Agency (INPS) indicates the application procedure and eligibility requirements for the contribution exemption for private employers who have obtained gender equality certification, as set by Article 5 of L. 162/2021, and obtained it by 31 December 2023. Applications must be submitted by 30 April 2024.

Health and Safety in the Workplace 

The Law Decree No 48/2023, converted into Law No 85/2023, introduced several significant modifications with regard to health and safety at work (Consolidated Safety Legislative Decree No 81/2008 - TUSL):

- the extension of the cases in which the employer is obliged to appoint company doctor and wider obligations of the competent doctor;

- more extensive information, education and training obligations for the employer. If a company uses equipment that requires particular knowledge with reference to its specific risks, the employer must now provide adequate, specific training to ensure the proper and safe use of this equipment. Failure to do so is a criminal offence;

- an increase in inspection activities in order to guide the inspection process and facilitate the acquisition of all the elements useful for defining it. For this reason, public and private bodies are required to share the information they have at their disposal with the INL (National Labor Inspectorate).

Further relevant changes related to health and safety are to be introduced in accordance with the Italian Recovery and Resilience Plan, by the Law-Decree No 19/2024. A "credit licence" (patente a crediti) is to be introduced as of 1 October 2024, for companies and self-employed workers working on temporary or mobile construction sites where construction or civil engineering work is carried out. The licence, issued by the Labour Inspectorate in digital format, will provide for the initial allocation of 30 credits, which may be reduced in the event of violation of the regulations. Below 15 credits, companies and self-employed workers will not be allowed to work on construction sites. In the event of violation, an administrative penalty will be applied. Further operational indications will be issued, as well as possible interventions by the Ministry of Labour, if the licence obligation is extended to other business areas, on the basis of agreements stipulated at national level by employers' and workers' trade unions.