Written by Riccardo Maraga, Law Firm of Ughi E Nunziante, Milan, Italy
The #COVID-19 epidemiological emergency has caused a situation of profound crisis in #Italy. Many economic activities have been suspended by provision of the authorities for health reasons. In other cases, although there were no restrictive provisions, the activities suffered a collapse in the demand for goods and services (i.e. the tourism sector, air transport, etc.).
In order to prevent the health emergency from becoming a social emergency, the Italian Government adopted a Decree Law which provides to companies and employees different kinds of social shock absorbers.
Before analyzing the main measures introduced to manage the emergency on the social and labour front, it seems appropriate to offer a general overview of the instruments provided by the Italian legal system to protect employment in the event of a corporate crisis.
In general, a company facing a difficult period from a financial and market point of view has two alternatives: lay off staff in order to reduce the costs or request to the public authorities the intervention of a social shock absorber.
Without going into too much detail, in the Italian legal system there are three types of social shock absorbers:
- ordinary wage integration fund(for companies of the industrial sector);
- extraordinary wage integration fund(for companies of trade, transport and tourism sector);
- wage integration fund(for all companies that do not fall within the two aforementioned instruments).
The prerequisite for obtaining these social shock absorbersis simple: the company is temporarily in crisis but believes it can recover in a short time.
During this period, in order to avoid the dismissal of the staff with the relative social impact, the company can reduce the labour cost by suspending or reducing employee working hours. The wages lost due to the suspension or reduction of the work activity is integrated by the public authorities through the aforementioned instruments.
In “normal” times, in order to access these instruments, long and complex procedures are required and the company must be able to demonstrate the crisis situation and the measures put in place to exit the crisis without making layoffs. Furthermore, before accessing wage integration allowances, trade union information and consultation procedures must be followed.
Asmentioned at the beginning, the Covid-19 emergency is causing a generalized crisis for businesses. The risk of mass layoffs and corporate closures is real. For this reason, the law has introduced social shock absorbers that can be accessed with simplified procedures and shortened timelines.
Law Decree no. 18/2020 introduced a special wage integration allowance for Covid-19 with a fast procedure. In particular, employers who in 2020 suspend or reduce their working activities due to the COVID-19 epidemiological emergency, can apply for the wage integration allowance for Covid-19 for periods starting from 23 February 2020 for a maximum of nine weeks and in any case until the month of August 2020 at the latest.
Employers who submit this application are exempt from the main limitations and conditions generally provided for by the legislation concerning the ordinary social shock absorbers. In particular, the union information and consultation procedure that companies should follow before the request of the allowance to the relevant authorities has been simplified (it can also be carried out electronically within the three days following that of the request).
Parental leave for Covid-19
Due to the Covid-19 emergency, the Italian Government closed the schools of any level and the Universities. In order to allow the parents to have the possibility to take care of their children, the Decree law provides that both parents employed in the private sector with children under 12 (age limit absent in case of handicap) are entitled to a period of paid leave (continuous or fractional) not exceeding fifteen days, paid with an allowance equal to 50% of the normal remuneration earned by the employee.
Furthermore, both parents employed in the private sector with children between 12 and 16 are entitled – taking turns – to unpaid leave – with the right to maintain the place of work – for as long as the schools are closed. Parents can opt for a bonus for resorting to baby-sitting services not exceeding 600 euros.
Increase in paid leave for disabled employees or for the assistance of disabled people
In Italy disabled employees or employees who must assist a disabled member of their family have the right to use 3 days per month of paid leaves. During the Covid-19 emergency the number of days of paid monthly leave have been increased by a further twelve days in total available in March and April 2020.
The period spent in quarantine with active surveillance or in fiduciary home permanence with active surveillance by employees in the private sector amounts to sick leave for the purposes of the economic treatment provided for by the reference legislation. This means that the quarantined employee, during the period of quarantine, may take the sick indemnity normally paid to employees in sick leave.
Extension of unemployment allowance terms
For the events of involuntary termination of the employment relationship occurring between 1 January 2020 and 31 December 2020, the deadline for the submission of the application for unemployment allowances (Naspior Dis-coll) has been extended from sixty-eight to one hundred and twenty-eight days.
According to Italian employment law, “smart working” is a special agreement between employer and employee that provides the possibility of the employee to carry out his working activity out of the employer’s site (e.g. at home or in any other place), without a fixed place of work.
Until 30 April 2020, employees who are disabled or who have a person with a disability in their family are entitled to carry out their work in smart working, unless this is incompatible with the duties performed by the employee.
In addition, employees in the private sector suffering from serious and proven pathologies with reduced working capacity are given priority when accepting requests to work in smart working. Due to the limitations to the freedom to movement, introduced in order to reduce the Covid-19 emergency, this method to perform the working activity is actually very used.
Starting from March 17, 2020, the opening of collective dismissal procedures is precluded for 60 days and pending procedures started after February 23, 2020 are suspended in the same period. Until the expiry of the aforementioned term, employers cannot withdraw from the contract for a justified objective reason.
This means that during the period of prohibition, the employer can dismiss an employee only for disciplinary reasons and not for economic reasons.
It is very probable that these measures will, at least in part, be extended for as long as the emergency continues.
Riccardo Maraga, “Measures enacted in Italy to reduce the social and labor impact of Covid-19” Canadian Law of Work Forum (April 9 2020): https://lawofwork.ca/?p=12254