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Employment Terms and Conditions

Italy - Employment Terms and Conditions

Italy was hit hard by the economic recession of 2007–11, but it still ranks as the 8th largest economy worldwide and the 4th largest in the European Union. GDP growth is expected to continue to rise steadily over the next 3 years. Italy is also regarded as the safest of Europe’s struggling economies as most of the public debt is owned by national subjects.

Employees in Italy are well paid and enjoy a high standard of living. Working hours and work days can vary greatly depending on one’s career, the employer and the sector. On an average however employees in Italy follow the 40 hours a week rule, working 8 hours a day, for 5 days a week. Saturday’s and Sunday’s are off days and workers are also entitled to a one hour lunch break during their 8 hour day. Although overtime is permitted, it is restricted to two hours a day and in such cases requires the authorization of the company’s human resources department. Employers must also compensate employees by paying higher overtime rates. Employers are also required to pay a wage penalty which goes towards the national security system. This penalty amount will also increase as the hours of overtime increase.

The exact number of days of paid leave can vary depending on the contract details, and in some cases an employee is guaranteed up to 26 days of paid leaves. All employees in Italy are entitled to a minimum of twenty days of paid annual leave however. An employer cannot make a payment in lieu of annual leave unless the employment contract has been terminated. Unpaid leave entitlements are not regulated by statutory law and will be dependent on a collective bargaining agreement. There are 12 public holidays in Italy and these cannot be included in an employee’s minimum leave entitlement.

Women are entitled to five months of maternity leave, two before childbirth and three after. Women who prefer to avail of four months leave after childbirth and just one month prior to childbirth can do so, on production of a medical certificate. Women who are engaged in occupations that require the lifting or moving of heavy objects can also go on early maternity leave but need to produce a medical certificate and seek authorization from the Employment office. In such a scenario the employer’s consent is not required. A female employee cannot be allocated any tasks that can jeopardize her health through the course of the pregnancy and for seven months following childbirth. Women on maternity leave are also entitled to an allowance from Italy’s National Social Security Body, which is the equivalent of 80% of their salary.

Italy once had one of the most generous public pensions allowing for a relatively early retirement age but the economic crises of 2007 to 2011 has forced Italy to accelerate pension reforms in the face of an unsustainable budget deficit. The retirement age at which employees can avail of seniority pension has undergone changes in recent times starting with pension reforms introduced from 2004. These reforms began to tighten the conditions for early retirement. The age at which employees are entitled to seniority pension has been raised from 57 years to 66 years for men and it is being progressively raised for women as well.

Italy’s pension system comprises mainly of the public pension or first pillar system, occupational schemes and private pension plans. Occupational pension schemes and private pension plans are not very common in Italy because of widespread popularity of the public pension system prior to the reforms introduced from the first decade of this century.

Unions are extremely common Italy and have played a crucial and historic role in the shaping of Italy’s economy and in the labor rights movement. Collective bargaining agreements between unions and employers, also known as CBAs, are in fact very common in all sectors.

Membership in unions is not compulsory, but if you do choose to join a union it is not something that is frowned upon. Employees are protected against any kind of discrimination because of their membership in any union. Employers are strictly prohibited from investigating any employee’s union membership or opinions that are not directly relevant to their professional ability to perform their job. An individual cannot be refused a job or be dismissed because of their membership in a trade union or because they decline membership in trade union.

The notice period for termination of employment can vary depending on the seniority of the employee and the sector. Typically, the minimum notice period is 15 days, but it can even be as much as six months. It is imperative that an employee notifies his/her employer in accordance with the notice period described in the employment contract. In the event that an employee leaves employment without complying with such requirements the employer is legally allowed to retain an indemnity that is proportional to the notice period.

In the event of a dismissal, the notice period is usually longer than in the case of a resignation. These terms are again set out in the CBA. The dismissal must always be served in writing and a disciplinary procedure needs to be followed if the dismissal is on account of the employee's failure to fulfill legal or contractual duties. A dismissal or layoff on the grounds of redundancy must also be justified by a real need to take such steps to address an economic, organizational or production problem.

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