Italy: A Guide to Prevent Collapse During Coronavirus

Erez Greenberg March 19, 2020

We have gathered information on what measures you can take as an employer in Italy to help preserve your employees while keeping your business intact. As more information comes in, we will update this post.

If you have any questions on the impact of Coronavirus on labor laws, visit our Linkedin AMA post and leave us your questions in the comment section and we will reply.

[AMA] Impact of Coronavirus on Labor Laws

Updated: March 22, 2020 

The Italian government has announced that for the next two months, unless there is just cause, an employer is barred from terminating their employees.

Self-employed persons who need to take care of their children due to school closures will receive parental leave, which will amount to 50% of their monthly wages.

Taxes has been suspended for employees in professions that have been defined as the most vulnerable and hard hit, including cooks, trick drivers, hotel workers, and clerks.

Updated: March 19, 2020

Paid Leave

The first measure is to encourage employees to take paid leave and to use all of their accrued vacation days. Employees cannot be forced to go on unpaid leave and will need to consent to this.

The “COVID-19 emergency” decree (dated 8th & 11th March 2020) recommends that employers grant employees the maximum leave possible. Furthermore, although Employers are generally entitled to unilaterally determine the period during which their employees may take holidays, employers are encouraged to collaborate with work councils and trade unions collective agreements at a company level specifically outlining the use of holidays and leave permits throughout the COVID-19 emergency period.

In addition, the creation of an ad hoc collective agreement at a company level could allow companies to meet employees’ needs during the emergency period and grant them additional leave, special parental leave, or special measures for working mothers.

 Redundancy

Employers can make redundancies due to the reason of ‘decrease of work’ demand. Severance will need to be paid to:

  • Employees with continuous service of under 1 year. Severance will consist of the notice period plus 3 months’ salary.
  • Employees with over 1-year continuous service. Severance amount will vary depending on the employee’s salary and length of service, but it will be equal to 8% of the annual gross salary per each year of employment plus notice period, outstanding holidays, and 13th & 14th salaries where applicable.

Applying for Additional Funding

Employers whose operations are suspended due to a decrease in work can apply directly for the Cassa Integrazione Guadagni Ordinaria without informing and consulting works council/trade unions in advance.

As of 23rd February 2020, employers operating in market sectors which do not fall under the cover of Cassa Integrazione Guadagni Ordinaria are entitled to apply for a special public scheme for integration of the salary (“Cassa Integrazione in deroga”) for a maximum duration of 3 months. Under this scenario, employees may be required to immediately take all of their remaining leave entitlement in advance of the public scheme being applied.

The regions of Emilia-Romagna, Lombardy, and Veneto are not covered by Cassa Integrazione Guadagni Ordinaria or Cassa Integrazione Guadagni Straordinaria. Employers with businesses in these regions are instead entitled to apply for the Cassa Integrazione in deroga in cases where they are seriously affected by “COVID-19,” providing that they are able to reach an agreement with the company’s works council or trade union. In such an event, integration of the salary may be granted for a period no longer than 1 month.

Employer and Employee Rights & Obligations Q&A

Source: Baker McKenzie

1. Are employees obliged to disclose themselves as a “risk-factor” to the employer?

  • Yes, employees who have cold or flu symptoms must inform their employer through the HR manager. In addition to this, anyone who has been to an area that has been declared as at risk for COVID-19 by the WHO or has been in contact with other individuals who have tested positive are also obliged to disclose this information to their employer as well as to public authorities.
  • All individuals present in Italy are subject to very strict restrictions on mobility. Mobility is limited to cases justified by: i. reasons of work ii. necessity iii. health to reach one’s domicile if they were outside the country before March 8, 2020
  • Police and Public Officers will ask people moving around to justify the reason why they are doing so, also by means of a self-certification to be signed in front of the Officer.
  • Anyone in Italy who has cold or flu symptoms are confined to their domicile until they are tested for COVID-19; they need to inform their employer and the local Sanitary Authorities.
  • Anyone in Italy who has tested positive to COVID-19 is mandatorily confined to their domicile.
  • Criminal sanctions apply in case of violation of the above provisions.

2. Can the employer demand employees to disclose themselves as being a “risk-factor”?

  • Employees have an obligation to inform their employer if they have cold or flu symptoms. In addition to this, anyone who has been to an area that has been declared as at risk for COVID-19 by the WHO or has been in contact with other individuals who have tested positive are also obliged to disclose this information to their employer as well as to public authorities.
  • Recent legislation entitles employers to take employees’ temperature upon entering the workplace.
  • Employers must inform employees, as well as anyone else who enters the workplace, that access shall be denied to those who, in the last 14 days, have had contact with individuals who have tested positive for COVID-19 or who have travelled to a risk area as per indications of the WHO.
  • Processing of personal data caused by the above measures requires the employer to provide information on the treatment of personal data even verbally, by making reference to the prevention measures introduced to fight the spread of COVID-19. Further limitations on data processing apply in relation to the purpose of processing, data sharing and data retention.

3. Can the employer issue an instruction (or a policy) requiring employees to report co-workers with flu symptoms (i.e., fever, cough, difficulty breathing, pain in the muscles, tiredness) to the employer?

  • Yes. Given the exceptional circumstances currently occurring in Italy, anyone who is aware of an individual who has flu symptoms and who has not received assistance, should immediately report the case to the appropriate Health and Regional Authorities. This extends also to employees and employers: employees who fear that a colleague is ill should inform their employer, who in turn should contact the company doctor and Health and Regional Authorities.
  • Employees who become ill at work must be isolated from other workforce, while the employer informs local health authorities and receives instructions on what to do.

4. Can employees refuse to come to work?

  • Business activity is subject to strict regulations in all parts of Italy, especially on mobility of employees mentioned in 1 above.
  • Smart-working must be done everywhere in Italy and whenever possible.
  • Meetings should take place via audio-video systems unless meeting in person is absolutely necessary and in this case a minimum distance of at least 1 meter between participants must be complied with.
  • Employees can only

5. Can employees refuse to attend meetings or to travel?

  • Business activity is subject to strict regulations in all parts of Italy, especially on mobility of employees mentioned in 1 above. Movement for work-related reasons is permitted but must be proven via a self-certification statement to be signed by the employee when asked by the police / public authority.
  • Meetings should take place via audio-video systems unless meeting in person is absolutely necessary and in this case a minimum distance of at least 1 meter between participants must be complied with.
  • On the entire territory of Italy, conferences and business events are suspended.

6. Can the employer send employees on suspension from work?

  • If an employee is absent because he/she has been infected by Coronavirus, rules governing sick leave apply and the employee is mandatorily confined to his/her domicile.
  • If an employee is not sick but in quarantine as a result of an order of the public authorities, this is considered sick leave and treated as such. The period of quarantine is not considered for the purpose of calculating the maximum term of sick leave an employee is entitled to in any given year.
  • Smart-working must be done everywhere in Italy and whenever possible.
  • If smart-working is not possible and the employee is unable to normally perform his/her working activity, the employee should encourage the employee to use vacations or agree on a period of paid or unpaid leave linked to the occurrence of uncommon events.
  • Certain social shock absorbers will be made available to qualifying companies in case of partial or total suspension of working activity linked to the COVID-19 outbreak.

7. When is the employer forced to shut down its operations?

  • Business activity is subject to strict regulations in all parts of Italy, especially on mobility of employees mentioned in question no. 1 above.
  • A business may be shut down when there are COVID-19 cases among workforce, pending mandatory sanitization of the premises. This decision would have to be made after informing and in consultation with local Health and Regional Authorities. Social shock absorbers will be made available for these exceptional cases.

8. Does the employer have the obligation to report infections occurring in the business to the health authorities?

  • Yes. This information needs to be immediately disclosed to the company doctor as well as to local health and regional authorities.

9. Can the employer require an employee to see a doctor?

  • If an employee has cold or flu symptoms, he/she must contact his/her doctor. The employer can check to ensure that the employee has complied with this obligation and ask him/her to leave the workplace. The employee has to also immediately report his state of illness to local health authorities via a phone number made available in each region.

10. If employees are sent on suspension from work, or refuse to come to work or if an operation is being shut down, do the employees still need to be paid?

  • In case a company is forced to close by order of a public authority and there are no other means (like smart-working) or measures that the employer may use to minimize consequences for workforce, this would be considered impossibility of performance or force majeure. Consequently, both the employee and the employer are freed from their respective obligations — the employee from performing working activity and the employer from the obligation to pay remuneration.
  • Note that smart-working should be done everywhere in Italy and whenever possible. If an employee continues to refuse to come to work, in the absence of a legitimate reason (for example, in the absence of confirmed cases of COVID-19 or other risk factors) and smart-working or use of holidays / leaves is not possible, this could be considered an unjustified absence, something that is relevant from a disciplinary point of view and can lead to disciplinary termination in certain cases.

11. If kindergartens and schools are being closed and employees need to stay home and cannot work, does the employer need to pay them and – if so – for how long?

  • All schools in Italy, from kindergarten to universities, are closed until 3 April 2020. Further extensions are highly probable.
  • The Government enacted a decree on March 16, 2020 that will go into force soon and that provides for the following: i. parents with children younger than 12, who are not on smart-working or benefitting from other form of salary support measures, are entitled to 15 working days of parental leave (paid at 50% by INPS – national social security authority). The 15 days are for both parents (not 15 days each) and can be used in a fractionated manner. ii. parents with children aged 12 to 16 can take an unpaid leave for the whole period in which schools will remain closed.
  • Parents may also use holidays, paid time off, parental leave or other forms of leave that may be available under the applicable CBA or agreed with the employer.

For more details see our complete payroll & benefits guide to Italy