Smart working in Italy

Catrina Smith (Moderator). Welcome to the next instalment of our series of videos looking at SMART working arrangements. Our objective in these videos is to provide you with a basic understanding of the legal framework relating to SMART working in Italy, France, Germany and the Netherlands, where we have strong employment law practices.

I am delighted to introduce you to Attilio Pavone, the head of our employment law team in Italy. Attilio is based in Milan, where he leads a team of four lawyers.

Q: Attilio, tell us about the most commonly used, traditional, working arrangement used in Italy, and the current options for employers and employees who want to enter into flexible, or SMART, working arrangements.

A: Well Catrina, we all know Italy is famous for tradition in many ways, and so it is no surprise that in the work habits of all Italians tradition also runs deep.

The first, tiny, deviation from the old fashioned model of five days-a-week, full-time working, at the premises of the employer, happened in the year 2000. We had the first framework agreement signed by unions in the public sector. This introduced “teleworking”, which allowed employees with technology to perform some of their work, from home, or when they were “on the go”.

This resulted in economic efficiencies for the employer and a happier workforce, since people were no longer chained to their desks all the time. Other important employment law reforms have been introduced in Italy to increase flexibility for employers and employees, and allow for work arrangements that were until then not only unlawful, but also socially unacceptable.

For example, in 2003, “zero-hour contracts”, also known as “jobs on call” became a reality.

One year later, the largest labour union in Italy signed agreements on teleworking with private sector companies in Italy that included the European framework agreement of July 16, 2002. This introduced teleworking agreements in the private sector.

Q: Thank you Attilio, Can you tell us a bit more about these zero hour contracts. How exactly do they work and how popular have they become?

A: The introduction of this type of contract really represented a turning point in the evolution of working arrangements in Italy.

Our current legal framework provides for two different kinds of “zero hour contracts”.

The first kind is an actual contract which places the employee “on call”. If the employee receives a request from his employer to do work, he is obliged to respond and be available to do that work. For this reason the contract is in force even when the performance is not carried out. The salary paid to this employee reflects the fact that the employee is making himself available to work for the employer at specific times (even though it is lower pay), at the request of the employer.

A second type of zero hour contract is the true kind of zero hours contract when the employee is not even obliged to respond and so the employment contract only comes into being - and a salary is only paid – only if, and when,  the employee accepts and performs the relevant work.   As a result, it is common practice for the employer to maintain a pool of potential employees to choose from.

There are some limits to the use of zero hours contracts. For example, age:  The employee must be under 24 years of age or over 55 as a general rule. The age restriction can be waived, but only if allowed under a collective bargaining agreement.

Also, zero hour contracts can never be used in the six months following a mass or collective redundancy procedure and they can never be used to replace employees who are on strike. Apart from these exceptions it is still an extremely powerful tool for flexibility for employers.

Q: Other than “zero hour contracts”, what other types of SMART working solutions does the current legal framework in Italy allow? For example, how common is it to see part-time work contracts in your market?

A: Part-time work contracts are widely used by Italian companies. This part-time work can be a reduction in the hours worked per day, the number of days worked per week, or the months worked per year.

Flexi-time working is another option. It meets the requirements of an employer who may need the employee to work longer hours than the traditional 40 hours a week during some parts of the year, and fewer hours at other times. The advantage is that the working time can be averaged over a period allowing the employer to do this without incurring significant over-time costs. To safeguard the employee, by law, the average duration of working hours may never exceed 48 hours per week, with further laws governing rest breaks.

It is possible to agree on more flexibility on part time, with employers and employees being able to mutually agree to any of these arrangements and change them over time, as the needs of either of the parties changes.

Q: So, after a long history when only the most traditional and rigid work contract was allowed, employers and employees in Italy seem now have many more SMART working solutions. Can we expect further reform in this direction?

A: There is a discussion now in the Italian parliament about introducing a new, more detailed version of teleworking. The actual change in this of this new type of teleworking will be about the way in which the employer can measure the performance of the flexible teleworker. We are used to measuring work by hours.  Now, if this bill is approved we will have work measured on the completion of a task or project.

Conclusion: Very interesting, thank you Attilio for that overview and your insight to the developments in Italy. All in all, I’d say that after a long history when only the most traditional and rigid work contract was allowed, employers and employees in Italy now have many more SMART working solutions.

International companies will certainly find that it is easier today to maintain a flexible workforce in Italy, designed to meet its specific needs, as compared to 10 years ago.