The Court of Trieste, Employment Section, with order of 21 December 2023, no. 525/2023 has held that so-called “vulnerable” workers’ rights to work remotely cannot be “absolute” but must be balanced with the company’s organisational and production needs as envisaged by the employer.
In the present case, a “vulnerable” employee worked remotely five days a week, under an individual fixed-term agreement. At the end of the agreed term, the employer informed the employee that, due to changed business and organisational needs, she would have to work for three days a week in person and, for the remaining two days, remotely.
In the face of this, the worker complained about the incompatibility of her state of health with in-person work, arguing the the tasks assigned to her were absolutely compatible with remote working – also taking into account that in the last three years she had carried them out entirely remotely – and highlighting the unlawfulness of the employer’s conduct for breach of Article 2087 of the Italian Civil Code.
The employer challenged the application and claimed that it was unfounded for alleged breach of the company’s freedom of organisation, protected by Article 41 of the Italian Constitution. The employer justified the refusal to allow the employee to work entirely remotely on the basis of proven organisational reasons and reiterated the need for her presence in the workplace for at least three days a week.
The Court highlighted that the right to remote working granted to “vulnerable” workers (see Article 90, paragraph 1, of Italian Decree-Law no. 34/2020) is not an absolute right but a right expressly subordinated to the compatibility of the worker’s tasks being carried out remotely.
The Court also acknowledged that the ways in which the employer exercised its power to organise the company appeared real and appropriate and that the possibility of working remotely, albeit partially, was never denied but rather partially granted following a balancing and re-evaluation of the parties’ mutual needs.
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In conclusion, it can be said that the assessment of the compatibility of remote working by vulnerable workers must be carried out on the basis of the organisational and production needs of the concerned organisation, involving, where necessary, an inevitable need to alternate between days in which the worker must work in-person and days when he/she can work remotely. This reading, among others, is consistent with the provisions of Article 18 of Italian Law no. 81/2017 which, in defining remote working, provides for that work should be provided “partly inside company premises and partly outside”.
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In its recent order No. 19023 of 5 July 2023, the Italian Court of Cassation has ruled on geographical jurisdiction under Article 413 of the Italian Code of Civil Procedure. The Court ruled that the worker’s home, from which he performed his work through remote working, could not be classified as a company dependence in the absence of any objective or subjective connection of the place of performance of the service with the company.
The facts of the case
The case originates from a payment order issued by the Court of Rome in favour of a temporary worker. The employer had been ordered to pay the worker compensation arising from the nullity of the temporary employment contract and for the continuation of the activity beyond the expiry of the time-limit, with the consequent transformation of the temporary employment contract into a permanent employment contract.
The company challenged the payment order, asking for a preliminary determination that the Court of Rome did not have geographical jurisdiction over the matter and that, in the alternative, jurisdiction rested with the Court of Genoa, as the worker’s location of operational and effective activity, or the Court of Udine, as the place where the company had its registered office.
In this application the Court of Rome declared its lack of geographical jurisdiction, holding that jurisdiction rested, alternatively, with the Court of Genoa or Udine, as well as the Court of Civitavecchia, as the worker was resident in Civitavecchia and performed his work through remote working from his home.
The appeal to the Italian Court of Cassation and the decision taken by the Court
The company appealed against that judgment by way of a single legal ground, in which it objected to the erroneous interpretation of the law and of the established case-law regarding the determination by the Court of Rome of the jurisdiction of the Court of Civitavecchia.
The company pointed out, in fact, that there was no basis for establishing jurisdiction in the Court of Civitavecchia, since there was no nucleus of assets organised for the exercise of the business at the employee’s home, thus excluding jurisdiction at the place where remote working was carried out.
The order issued by the Italian Court of Cassation starts from an analysis of Article 413 of the Italian Code of Civil Procedure, which states that the employment judge has geographical jurisdiction alternatively in the place where the relationship was established in the place where the company is located, or, finally, in the place where the company dependence to which the employee is attached is located.
According to the ruling of the Italian Court of Cassation under comment, with specific reference to ‘company dependence’, reference must be made to the place where the employer has located a nucleus, albeit modest, of assets organised for the exercise of the business (Italian Court of Cassation No. 14449/2019; Italian Court of Cassation No. 4767/2017).
Where, on the other hand, as in the case in question, the remote working takes the form, according to the employee, solely of the place where the service is carried out, without any other related aspect that in any way characterises the home as a company dependence, then this criterion cannot be taken into consideration for the purposes of identifying geographical jurisdiction. Consequently, the only criteria which remain applicable are represented by the place where the contract was concluded or the place where the employee was employed.
As a result, the Italian Court of Cassation upheld the Company’s application on the question of jurisdiction, declaring the alternative geographical jurisdiction to be exclusively the courts of Udine and Genoa but not the court of Civitavecchia.
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The ‘Employment Decree’ (Italian Decree Law No. 48/2023) was converted into Italian Law No. 85 of 3 July 2023, which introduced important innovations for employers.
Below is an analysis of the main changes introduced in the field of: (i) forward contracts; (ii) staff-leasing contracts; (iii) the right to ‘remote’ working.
As regards fixed-term contracts, the converting law confirms the new grounds that employers shall be required to use in the event that the duration of a fixed-term contract exceeds 12 months (also as a result of extensions or renewals). The new grounds concern:
The converting law also provides for more flexibility regarding renewals. In particular, without prejudice to the maximum time limit for fixed-term contracts (i.e., 24 months), a fixed-term contract can be renewed ‘freely’ within the first 12 months of the relationship’s duration (thus, de facto equating the rules on renewals with those on extensions).
Lastly, it is clarified that only contracts entered into after 5 May 2023 are to be taken into account for the purpose of calculating the twelve months.
Other new features concern the regulation of open-ended staff leasing, for which the converting law of the ‘Employment Decree’ provides for workers hired by the staff-leasing agency with apprenticeship contracts and ‘disadvantaged’ jobs to be excluded from the 20% quantitative limit.
Finally, on the subject of ‘remote working’, the converting law further extends the right to ‘remote working’ for certain categories of workers and, in particular:
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DID YOU KNOW THAT… On 5 May 2023 the so-called ‘Employment Decree’ came into force?
By Law converting, with amendments, Decree-Law no. 48/2023 – (the ‘Employment Decree’ (‘Decreto Lavoro’)) containing ‘Urgent measures for social inclusion and access to the workplace’ – which has been approved by the Italian parliament and is currently scheduled to be published in the Italian Official Gazette (“Conversion Law“) – the right to remote working will be extended:
It should be noted that the above-mentioned Decree of the Minister of Health, February 4th, 2022 – converted, with amendments, by Law no. 11 of February 18th, 2022 – identifies the conditions of the subject and the chronic pathologies with low clinical compensation and with a particular connotation of seriousness under which the employee’s primary care physician certifies the situation of vulnerability for the purposes of the application of certain transitional rules of favor (Please refer to Article 28-bis of the Conversion Law).
(Please refer to Article 42, 3-ter, of the Conversion Law).
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Contribution and tax relief introduced by the budget law and extension of remote working for vulnerable persons
DID YOU KNOW THAT… On 5 May 2023 the so-called ‘Employment Decree’ came into force?
Italian Law of 24 February 2023, No 14 converted into law, with some modifications, Italian Decree-law of 29 December 2022, No 198, containing ‘urgent provisions regarding legislative deadlines. Extension of deadlines for the exercise of legislative powers’ (the so-called Milleproroghe Decree) published in the Italian Official Gazette No 49 of 27 February 2023:
Public and private employees are considered ‘vulnerable’ if they are affected by sicknesses and conditions identified by the decree of the Minister of Health referred to in Article 17, paragraph 2, of Italian Decree-law of 24 December 2021, No 221, converted into law, with amendments, by Italian Law of 18 February 2022, No 11. This right must be guaranteed including, if necessary, through assignment to a different job without any reduction of the salary and without prejudice to the application of any more favourable provisions set out in the relevant national collective bargaining agreement (contratto collettivo nazionale di lavoro, ‘CCNL’).
Finally, with the above-mentioned conversion Law, the right to remote working is renewed for parents who are private sector employees with at least one child under the age of 14, a protection that had last been extended until 31 December 2022.
In the latter case, said right to remote working arises where the following conditions are met:
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On 29 December 2022, Italian Law No 197/2022, entitled ‘State budget for the financial year 2023 and multi-year budget for the three-year period 2023-2025’ (‘Bilancio di previsione dello Stato per l’anno finanziario 2023 e bilancio pluriennale per il triennio 2023-2025’ – hereinafter ‘Budget Law’) was published in the Italian Official Gazette.
The above-mentioned legislation, among the various measures, introduced some contribution exemptions for the year 2023. In particular, employers who in 2023 hire workers under the age of 36 under a permanent employment contract will be able to benefit from total exemption from social security contributions up to a maximum amount of EUR 8,000 for a maximum period of 36 months. This exemption is also granted for fixed-term contracts which are converted into permanent contracts in the same year. The relief in question is granted (and this is new) also in the case of employment of persons who receive ‘citizenship income’ (‘reddito di cittadinanza’).
In addition, the above-mentioned contribution benefit is guaranteed if the permanent contract (or the contract that is converted into a permanent contract) concerns female workers who, regardless of age, have been (i) unemployed for at least 24 months or (ii) unemployed for at least six months if they are resident in ‘disadvantaged’ (‘svantaggiate’) areas.
The reliefs introduced do not only concern social security contributions but also those relating to tax. On this point, in fact, the Budget Law reduces the tax rate on ‘productivity bonuses’ (‘premi di produttività’) which goes from 10% to 5% up to a maximum amount of EUR 3,000. The tax relief therefore applies to performance bonuses of variable amounts whose payment is linked to increases in productivity, profitability, quality, efficiency and innovation, as defined in the context of a corporate or territorial collective agreement. This relief applies to those who in the previous year have earned employee income not exceeding EUR 80,000.
Finally, the Budget Law extended until 31 March 2023 the right for ‘vulnerable’ (‘fragili’) workers to work through remote working. For the other categories of workers, on the other hand, remote working is permitted only after signing an individual agreement between the employer and the employee under Articles 18 et seq. of Italian Law No 81 of 22 May 2017.
The Italian Budget Law 2023 (Italian Law No 197/2022) was published in the Official Journal (Gazzetta Ufficiale) on 29 December 2022 and comes into force on 1 January 2023 and introduces the following important initiatives in the employment law field.
Agile working: as of 1 January 2023, the categories of workers with the right to agile working will be reduced. Until 31 March 2023, only so-called ‘vulnerable’ persons will have this right, workers with children under 14 being excluded.
Parental leave: an extra month of optional, 80% paid parental leave is introduced. The leave may be taken by either parent, alternatively, until the child is six years old.
Recruitment incentives for permanent contracts: for the whole of 2023, there will be incentives for the recruitment of permanent hires with a contribution threshold of up to EUR 8,000 for those who already have a fixed-term contract and in particular for women under 36 and for citizenship income recipients.
Productivity bonuses: as of 2023, the taxation of productivity bonuses will decrease from 10 per cent to 5 per cent. The preferential taxation applies to variable bonuses not exceeding EUR 3,000.
Temporary income: the possibility of using temporary employment services is extended by increasing the maximum limit of remuneration that can be paid by each employer from EUR 5,000 to EUR 10,000 per year. These temporary services may also be used for agricultural activities, as well as by employers with up to ten employees on permanent contracts, instead of five.
Vouchers: employment vouchers for temporary services are back, with a limit rising from EUR 5,000 to 10,000, for temporary services used in certain sectors, including agricultural activities, the hotel industry, personal care activities, and domestic work.
Pensions: there is a lot of news on the pensions front. The renewal for 2023 of the Early Pension (Anticipo Pensionistico – ‘APE Sociale’) and the extension of the Woman’s option 2023 (Opzione donna 2023) are confirmed, the latter with some limitations on the prerequisites with respect to the original measure (only for caregivers, women with disabilities and employees of companies in crisis). Introduction of the new ‘Quota 103’ whereby the pension prerequisite is reached at the age of 62 and after 41 years of contributions, but only applies to 2023. Finally, a new pension revaluation system for the years 2023 – 2024 is also in the offing.
Self-employment: the flat-rate regime, which provides for taxation at a rate of 15 per cent, will apply to revenues up to EUR 85,000, instead of the current EUR 65,000.
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Covid-19 and right to the use of parental leave: INPS provides the first indications
Sundar Pichai, CEO of Google, has recently announced that the company intends to permanently integrate remote working into its working practices, albeit with a hybrid approach, e.g. three days in the office and two days remotely.
These statements highlight the growing interest in remote working, a system that many companies were forced to try out for the first time during the lockdown and which has now become a real revolution. In many cases, it has become a structural choice due to its undoubted advantages, from a better work-life balance to reducing the stress of travelling to work.
A NEW NORMALITY
At present, according to INAPP (National Institute for Public Policy Analysis) data, 54% of employees in large companies work wholly or partly on a remote basis; furthermore, according to an analysis conducted by the Milan Polytechnic Observatory and Randstad Research, remote working may involve 3 to 5 million workers in the coming months. The path should be the one traced by the CEO of Google: according to a recent study by Fondirigenti, people will prefer to split the week in two or to alternate days in the office and remote work, so as not to sacrifice social relations and physical interaction with their colleagues. According to Vittorio De Luca, managing partner of the De Luca & Partners law firm, specialised in labour law and GDPR (General Data Protection Regulation), “in the near future, remoteworking policies will become more and more a rule and no longer just an exception”. remoteworking policies have also been promoted by the law: the Riaperture Decree has extended until 31 July the possibility for employers to use this instrument with a unilateral act, i.e. without having to sign an individual agreement. This deadline should be extended until 31 December also for the private sector, thus aligning it with what is already in place for the public administration. “However,” De Luca points out, “at the end of the emergency period it will be appropriate and necessary to regulate the relationship between the parties involved, i.e. employers on the one hand and workers (remote workers) on the other hand.”
THE PROBLEMS TO BE SOLVED
Remote working was first introduced in the Italian system by Law 81/2017. Remote working, says De Luca, is defined in the law “as a new and flexible way of organising employment, with no exact definition of the place and time of work, providing that the activity can take place partly inside the company’s premises and partly outside, without a fixed location, though in compliance with the limits on maximum daily and weekly working time established by law and by the applicable national collective agreement. In order for this to happen”, he adds, “an agreement, strictly in writing (for the purposes of proof and administrative regularity), must be entered into by the company and the worker”. And it is precisely the release from spatial and temporal limits, notes the expert, “which, if not regulated in advance, might have negative consequences for both the employee and the employer, from both a professional/work and a social/personal point of view”.
“Indeed, remote working has made the time profile of the service not essential, placing the objectives and performances of the resources concerned at the centre”, explains De Luca. So that “it is of primary importance for employers to be able to check and assess the results of remote workers”, whilst also determining “the forms of exercise of the employer’s power, paying attention to the manner, purpose and content of the same”. There follows the need, he concludes, to “introduce agreements, accompanied by internal procedures and regulations, which govern these aspects, also instructing the worker on the use of work equipment and on company security and personal data protection”.