Significant Changes On Employment Disputes

Introduction Main Changes Other Changes Introduction

On March 3 2010 Parliament approved a significant piece of legislation - the Collegato Lavoro - which affects several aspects of employment law, changing certain existing provisions and introducing new regulations.

In particular, the Collegato Lavoro is important from an employer's standpoint because it extends the use of arbitration and thus allows employers to avoid legal proceedings before the labour courts, which are usually oriented in favour of employees.

The Collegato Lavoro has not yet entered into force, as it is subject to presidential review and promulgation and has not yet been published in the Official Journal. However, by the end of 2010 it will introduce significant changes in the field of employment.

Main Changes

The main changes relate to arbitration, preliminary steps in labour litigation and the dismissal appeals procedure.

Arbitration

Under Italian law, except in certain limited cases stipulated in managerial collective agreements, an arbitration clause or covenant that is intended to avoid proceedings before the labour courts is null and void.

The Collegato Lavoro allows parties to chose arbitration in place of litigation where a national collective agreement so provides. Furthermore, the parties to an individual employment contract may include an arbitration clause to apply to potential future disputes, provided that such a clause is certified by a specific commission (as required by Law 276/2003, known as the Biagi Law). However, this option must be recognized in the applicable national collective agreement; if it is not, the Labour Department has 12 months from the rule's entry into force in which to define the process for executing an arbitration clause without trade union review.

An arbitration panel must consist of three members: one appointed by each party and a third appointed jointly by the parties or, if they cannot agree, by the president of the labour court. The arbitration must be completed within 140 days and the losing party has the right to appeal.

Preliminary steps in labour litigation

Article 410 of the Code of Civil Procedure states that a party seeking to sue another party before the labour courts must request a meeting before the local labour office (Direzione Provinciale del Lavoro). The meeting allows the parties to try to settle the dispute without going to court. The procedure was introduced in an attempt to reduce the labour courts' caseload.

...