COVID-19 and Employment contracts

Human resources in times of crisis

In many countries, labour laws usually protect employees. In this period of crisis, different kinds of problems arise: some companies face an obligation to stop or reduce their activity, while others need to carry on (or even produce more) in a complex sanitary framework.

How should an employer react when employees cannot go to the office (for sanitary or childcare reason)? Can an employer stop paying an employee if there is a diminution of work? Are there restrictions to redundancy plans during the crisis ?

Our experts give an overview of the financial support measures provided by the governments during the pandemic and of those restricting the possibility to terminate employment contracts.

They also present the leverages offered to employers to adapt working conditions during the emergency period.

Check out the FAQs of the country of your interest and get in touch with our experts for more information.

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Italy

How to deal with a reduction of business during the COVID-19 pandemic? Can I impose a reduction of working time on my employees? Is there any help from the State to cope with short-time work?

In general terms, an employer cannot force any employee to accept a reduction in his working hours and the corresponding salary; it could be done just by an individual or collective agreement.

By the way, the Italian Social Security System offers different tools to cope with temporary crisis situation. In particular, in Italy has long been possible to activate a short-time working system called ‘Cassa Integrazione’ (CIG, CIGO, CIGS CIGD, FIS).

Through that system, the employer may reduce its employees’ work for a certain period of time. When they are not working, employees receive 80% of their salary, with a maximum set for 2020 of  € 1,124.04 net per month, paid by social security agency (generally INPS).

According to the usual rules, access to the short-time working system could only be granted under the following conditions:

  • the employer have to work in specific business sectors (oil & gas, buildings and constructions etc);
  • the employer must have more than 5 employees;
  • each concerned worker must have been employed for at least 90 days;
  • the employer must not have hired fixed terms contract workers in recent times;
  • the employer must specify his reasons to access the system within a close number (e.g. natural events / shortage of raw materials / crisis or corporate reorganization ‘certified’)
  • the employer must sign an agreement with trade unions representatives;
  • the employer must pay an admission fee to the social security agency (INPS);
  • the employer has generally to pay the short-time allowance to his workers and can therefore compensate it with the payments due to the social security agency;
  • the employer can access to the system for different periods of time depending on the reasons of the application and the business sector.

For the Covid-19 emergency, access to the short-time working system has been significantly expanded and the necessary requirements have been deeply simplified (DL n.18/2020).

  • employers in all sectors can access;
  • employers can access even if they have less than 5 employees;
  • no seniority of workers’ service is required;
  • the employer can access regardless of whether he has employees with fixed term contracts;
  • a general reason, ‘Covid 19 emergency’, is accepted for all employers;
  • there is no need for a union agreement, a simple consultation is enough;
  • no admission fee is due;
  • the allowance can be paid by the social security agency directly to the workers;
  • the emergency intervention (following the DL 34/2020) can last for a maximum period of 18 weeks between March and October (but it can be added to ‘ordinary’ interventions ).

Foreign companies can apply for short-time work allowance as long as their employees in Italy are subject to Italian social security.

The Italian Government passed many other measures to assist companies facing the COVID-19 crisis such as tax delays and loans on favourable terms. Specific measures has been set for independent contractors, start-ups, agricultural sector and cultural sector companies.

What if I had just hired someone? Can I take my employment offer back?

No special rule has been adopted for this case, to which general rules must apply despite the Covid-19 emergency.

If the job offer is not classified as ‘firm’ and has not yet been accepted by the worker, the employer may withdraw it unless bad faith is proved; which seems difficult considering the emergency.

If the offer has been accepted, the contract is binding.

However, if a probation period has been provided in writing, the employer could terminate the contract by the end of that period and the termination would probably be considered legitimate (cf. Cass. 1762/2000).

In general terms, the employer could also terminate the contract on economic reasons, but the dismissal would be suspended at least until 17th of August (see infra, question n. 6)

Finally, it’s always possible to postpone amicably the start of the employment.

Furthermore, as mentioned above, short-time work can be implemented for new employees as well (see supra, question n. 1).

Can I impose my employees to take their remaining vacation days?

Yes, in general terms, in Italy, the exact determination of the holiday period for each worker is up to the employer, but he has to try to fulfill the worker’s requests and cannot refuse arbitrarily to grant holydays in the desired period.

On these basis, at the beginning of the Covid-19 emergency, lacking specific rules, many workers were ‘forced’ to take time off to face the employers’ business activities contraction. That choice has been considered legitimate.

After the approval of the first measures to help companies cope with the crisis (supra, question 1), the employer can force his employees to use vacation days only when every other ‘social security tool’ (“Cassa Integrazione” first) is exhausted.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

In Italy all kind of schools will be probably closed until September. Exception will be granted for nurseries and kindergartens during the summer.

To help workers to take care of their children under the age of 12 (or even disabled people), the “Rilancio” decree has granted:

  1. the right, for one of the two parents, to an extraordinary leave of 30 days with 50% pay covered by the social security agency (INPS);
  2. as an alternative to the leave, a contribution of 1,200 euros, paid by INPS, to purchase babysitting services. The contribution rises to 2,000 euros for health workers.

The contribution can be requested by accessing the institution’s portal (https://www.inps.it/nuovoportaleinps/home.htm) and can also be requested by independent contractors registered and insured by INPS.

In addition to the extraordinary leave, workers can stay home to care for their children without any consequences for keeping their job, but also without any payment.

Anyway, the employer is not required to pay the worker who does not work in order to take care of her/his children.

What should I do if there is still some business to do? How can I anticipate the end of the lockdown?

Throughout the lockdown period, work from home has been always promoted (and allowed) in all business sectors.

Prior to the Covid-19 emergency, an individual written agreement with the employee was needed to switch to so-called smart-working.

In order to deal with the Covid emergency, since the beginning of March, the employer can force his employees to work from home, providing the necessary tools.

On the other hand, disabled or otherwise ‘fragile’ workers can force their employers to allow them to work from home if it is compatible with their job.

In Italy it is not permitted to re-open activities earlier than required by national and, in some cases, regional laws.

All companies that have remained active or have been allowed to re-start after lockdown, must today comply with the protocols for health and safety protection of workers signed by the Government, companies and trade unions.

A first protocol applicable to all business sectors, signed on 14th March, was integrated on 24th  April (http://www.trovanorme.salute.gov.it/norme/dettaglioAtto?id=73916&articolo=16)  and flanked by 2 specific protocols for safety in logistics and transport sector  (http://www.trovanorme.salute.gov.it/norme/dettaglioAtto?id=73916&articolo=18)  and for safety on construction sites (http://www.mit.gov.it/sites/default/files/media/notizia/2020-04/Protocollo%20cantieri%2024%20aprile%2020.40.pdf). These protocols indicate the safety measures to be implemented to ensure a safe working environment (e.g. keeping safe distance and, where not possible, providing alternative protective measures; minimum cleaning and hygiene facilities etc.).

Do I have the right to terminate contracts in this period?

Not in all cases.

The ‘Cura Italia’ Decree (art. 46) suspends any collective redundancy procedure underway until August 17th and prohibits to start any new one; it also prohibits, until the same date, the termination of individual contracts for economic reasons (so called “giustificato motivo oggettivo”).

The following dismissals are still allowed on general rules:

  1. dismissals for disciplinary reasons;
  2. termination of fixed-term contracts upon expiry;
  3. executives’ contracts termination;
  4. termination within the probation period (supra, question n. 2).

This provision, although balanced by those relating to the short-term work system (supra, question n. 1), is much discussed and criticized by companies and scholars. Nevertheless, it has been confirmed by the ‘Rilancio’ Decree and its effects have been extended until mid-August (the original provision were binding until mid-May).