Newsletter

Editorial

N 49 July 2011

Trifir & Partners Law Firm

We are now on the eve of the summer holiday break. The July issue of our newsletter wishes a pleasant holiday to all of you who are going away and hopes that its contents will nonetheless appeal to you and be appreciated, at a time when the mind is definitely inclined to seek leisure and rest. Over the last weeks, two events, in particular, have had an impact on the community of employment and labour lawyers. On June 28, the Conndustria, the CGIL, CISL and UIL, Italy's three main trade unions, signed an agreement regarding the representativeness of unions and the efcacy of company accords. The issue is examined in the Focus feature of the Employment Law section. Yet, another event to which the press gave less prominence is equally worth mentioning, namely, the introduction, within the framework of the urgent measures for nancial stability set forth in by-law #98, 6 July 2011, of a unied contribution, to be paid by whoever takes legal action in an employment dispute at any level of instance. This is a stunning derogation to the principle in force ever since provisions on employment processes were laid down, whereby employment disputes must be free of costs, so as not to render burdensome, to some of the parties involved, the recourse to an employment tribunal. Now, by-law #98, 2011 imposes the payment of a contribution that will affect sensibly the costs of legal disputes and which is to be commensurate to the magnitude of the dispute, regardless of the outcome of the case. Compounding costs, in a legal system notoriously slow in reaching nal decisions, means imposing on companies and employees alike a levy of no small means with no adequate counterpart, to boot. It is to be hoped that the conversion into law of the decree will provide to the removal of this unjustied burden. Going back to the contents of our newsletter, we touch on the breaking news: the underwriting of a collective agreement in industry with regards to the notication of absence on sick leave. Our section on court sentences opens up with the Rulings of the Month, in effect, two decisions on dismissals, the rst illustrating a case of termination for just cause and the second regarding the contribution implications following the declaration of illegitimacy of a dismissal. The Firm Cases section also reports rulings on project contracts and on an ascertainment of superior qualications. The Civil Law section reports on an interesting and very recent decision of the Tribunal of Milan with respect to unfair competition between companies and the resulting compensation for damages. Enjoy your reading till next month! Stefano Beretta and the editorial staff: Stefano Trir, Marina Tona, Francesco Autelitano, Luca DArco, Teresa Cofano, Claudio Ponari, Tommaso Targa and Diego Meucci

Employment Law Focus 2 Firm Cases 5 Civil Law, Commercial, Insurance Focus 7 Contacts 8

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Employment Law

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COLLECTIVE AGREEMENT OF 28 JUNE 2011: A STEP FORWARD ON THE ISSUES OF UNION REPRESENTATIVENESS AND EFFICACY OF COMPANY ACCORDS
By Giacinto Favalli and Valeria De Lucia
The agreement signed on June 28 by the Conndustria, the CGIL, CISL and UIL, Italy's three main trade unions, stems from premises similar to those that inspired the previous agreements in 2009 (framework agreement of 22 January 2009 and actuation agreement of 15 April 2009) - which already expressed the keen interest of social parts to achieve a system of industrial relations that pursues conditions of productivity and of such productivity as to enable the strengthening of the production system, the development of factors conducive to employment and the improvement of real retributions for all workers - but which, compared to those agreements, marks a step forward in many respects. Firstly, social parts agree on the necessity of a structural and lasting reconguration of relations between union, where the accords of 2009 expressly dened themselves as experimental agreements, signed for a 4-year period. True to that declaration of intent, the collective agreement of 2011 lays down the criteria that make negotiation legitimate and ensure recognition of the efcacy of stand-alone company accords, so much so that it has been welcomed by many - arguably with a dose of over optimism - as marking the end of the so-called interim union right (interim in the sense that its nature owed from the failed implementation of the provisions set forth under art. 39 of the Constitution and from the irredeemable doubts on the construction of what such generated in terms of bargaining efcacy and union representativeness). In particular, point 1 provides as requisite to the legitimacy of drafting a trade collective agreement the achievement of a degree of representativeness above 5% of the total of workers employed in that trade of industry subjected to the collective agreement. Such degree is calculated by weighting the number of mandates based on the membership fees collected by each union - to be certied by Social Security and by way of apposite conventions, and thereafter communicated to the National Council of Economy and Labour (CNEL) - against the number of votes obtained at the elections for the College of Unied Unions (RSU). As regards stand-alone company accords, point 4 stipulates that such accords, both in their regulatory and economic aspects, have force and efcacy for all the personnel and are binding for all the unions that were signatory to the collective agreement of 28 June 2011 and present in the company, where approved by the majority of the RSU.
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Where, instead, such accords are signed by the college of the unions of the company (RSA) representing the majority (based on the number of mandates collected), in order to be efcacious such company accord must be subject to approval by the workers by way of a referendum. Doubtless, the fact that the CGIL, Italy's main trade union and notoriously left-wing, accepted to sign the collective agreement after refusing to endorse the agreement of 2009, lends more legal weight to the new agreement. Also, the new agreement sets down that company accords may derogate from national collective bargains (although the term

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COLLECTIVE AGREEMENT OF 28 JUNE 2011

derogate is not expressly used in the agreement) by authorizing such company accords to lay down rules designed to adhere to the exigencies of the specic production contexts by way of specic covenants that modify the national bargain agreement.

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Breaking News
An agreement between the Confindustria, the CGIL, CISL and UIL, Italy's three main trade unions, signed in the wake of the circular of 18 March 2011 of the President of the Council, now enables employees on sick leave to ask their doctors the identification protocols of the medical certificates sent by computer so as to communicate said certificates by e-mail or even by messaging to their employers within the time prescribed by collective agreements for communication of leaves of absence.

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COLLECTIVE AGREEMENT OF 20 JULY 2011 Circular 18 March 2011

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FIRM CASES
Rulings of the Month

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DISMISSAL WITH CAUSE - UNTRUTHFUL CERTIFICATIONS OF PRESENCE AT WORKPLACE AND FAILURE TO VERIFY FAIR CERTIFICATIONS OF PRESENCE OF OTHER EMPLOYEES (Tribunal of Milan, 26 april 2011) A manager responsible for the control of the book of presence at the workplace brought action against his employer seeking the nullication and/or illegitimacy of a for-cause dismissal notied him and claimed that such dismissal was groundless, and also unduly belated and retaliatory. The company counterclaimed and pointed out the seriousness of the grievances addressed to the employee, who had certied on presence forms performances superior to those effectively discharged, both by him and by other employees, and who had also repeatedly and untruthfully resorted to self-certication of his work hours and had even certied his presence at the workplace, which were disproved by the informatics system. Such circumstances were viewed as highly relevant by the company, owing to the very remit of the manager, which included, among other things, the monitoring of presence at the workplace. The Tribunal of Milan found the dismissal legitimate and pointed out that the misconduct of the manager qualied for dismissal with cause, insofar as his conduct qualied not only as negligence, but also as malicious and deceitful, to the point of irremediable breach of the bond of trust between employer and employee. Compounded by the reiteration of the misconduct and the intensity of the psychological element, and aggravated by the position of manager, the wrongdoing could but fall within the bounds of dismissal for just cause. (Counsels: Giorgio Molteni and Claudio Ponari) CONTRIBUTION OBLIGATIONS WHERE DISMISSAL IS FOUND ILLEGITIMATE AND SENTENCING TO PAY IN LIEU TERMINATION INDEMNITY (Tribunal of Milan, 27 may 2011) The Tribunal of Milan ruled on a recourse against a tax assessment by Social Security with respect to default on sanctions and interests upon belated payment of the contributions due on indemnity in lieu of notice, made only after the employment termination had been declared illegitimate and the company had been condemned to payment of indemnity in lieu of notice. The Tribunal of Milan found in favour of the recourse and annulled the tax assessment and, citing the Court of Cassation, reafrmed that a dismissal without cause or justied motive is a voidable transaction that produces its effects (termination of relationship) only until such sentence is passed as nds in favour of the employee and nullies said transaction (Court of Cassation, 9 March 2006, #5125). It follows that until the dismissal is annulled there is no way for the employer to pay contributions, nor for social security to collect them. Consequently, no wrongdoing may be ascribed the employer with regards to payment of contributions during the period that spans from the employment termination and the sentence of illegitimacy, It follows that no default on payment occurred and no interest or sanctions may be demanded for the alleged delayed payment (which social security claims to be due from the time of employment termination). (Counsels: Giacinto Favalli and Marina Tona)

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Other Rulings
PROJECT CONTRACTS - REQUISITES (Tribunal of Milan, 15 June 2011)

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Where a contract on project does not contain the specics of the project or a planning of the remit assigned the collaborator, the status of the latter is converted at law into a permanent employment contract and the principal may not submit proof of the modes and/or characteristics of the work relationship in order to prove that the performance was discharged under the scheme of independent employment. the Art. 69 of the Biagi Act, indeed, interpreted literally where it provides for the conversion of contracts on project set up in breach of the law, qualies as a sanction incurred by the principal and does not restrict itself, instead, to a mere legal reversal of the burden of proof. Such interpretation of the Biagi Act does not contrast with the sentence of the Constitutional Court #115/1994 which declared unconstitutional a provision that imposed the independent nature of an employment relationship, without enabling the proof to the contrary in favour of the worker, but which did not provide the same provision also in favour of the principal. Insofar as the conversion of the illegal contract on project must take into account the factual type of contractual negotiation achieved between the parts (art. 69, 2 of the Biagi Act), the employment judge may ascertain the existence of a part-time dependent form of employment relationship, based on the number of work hours effectively performed by the collaborator. (Counsel: Tommaso Targa) ASCERTAINING SUPERIOR QUALIFICATION - TESTS (Tribunal of Milan, 26 April 2011) The Employment Tribunal of Milan rejected the petition of an employee seeking the status of manager on the ground that the claim was couched in such broad and generic terms as to be held inadmissible for a fact nding of said claim. Indeed, the evidence submitted only referred to such terms as executive direction and organizational functions, shorn of any illustration of practical and specic remit other than a generic activity of co-ordination, consultancy, project starting and qualication, not otherwise specied, whilst the ascertainment of the effective performance of superior tasks may be achieved only by way of a procedure that provides as tests the examination of the declaratory statements agreed contractually at collective levels, the description of the activity effectively carried out, the valuation of the correspondence of such activity inside the contours of a position contractually dened. (Counsels: Mariapaola Rovetta and Stefano Trir)

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Civil, Commercial, Insurance Law
UNFAIR COMPETITION
(Tribunal of Milan, 20 June 2011)

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A company that operated in machinery production and commercialization took legal action pursuant to art. 700 and thereafter brought an ordinary petition against two contractor companies to which said company, in absence of its own mechanical body shop for production, commissioned its own products by providing from time to time the blue prints, the technical materials and the drawings, to that effect. The company also brought action against a third company, which employed as collaborators former workers of the plaintiff company (the assistant to engineering design, the engineering ofcer and the sales ofcer), who had at some point resigned in the wake of an interruption of the relationship between the principal and the two contractors. The defendants operated in the same branch of industry as the plaintiff. The latter had requested an investigation into unfair competition practices (essentially, stealing know how and poaching employees) and sued for the sentencing of the counterparts - who, in counter-claim, rejected any claim of wrongdoing to damage compensation. The phases of the process, from interim relief to the merits of the case, showed that the two contractors, after discontinuing the relationship with the principal, had not provided to the complete restitution of the projects and drawings received and were in the possession of the company's know how. Furthermore, and in association with the third company, which relied on the critical collaboration of the employees who had been poached from the plaintiff, they had contacted long-standing customers of the latter who also had pending business transactions with it, offering at a lower price tag the same type of machinery already produced by said plaintiff company. As a consequence, the sales of the latter had signicantly dropped. The Tribunal of Milan, conrming the contents of the earlier interim relief court order, found the three defendant companies guilty of unfair competition and sentenced them to damage compensation in equity. Indeed, the judge held that the defendants, using the facts proven, were able to offer () machinery identical in terms of functionality to those produced by the plaintiff, but at a cost signicantly lower, as their cost did not factor in the engineering projects costs, nor those of research of customers (the clientele being already known by the former employees and the two contractors). Also: in short, the defendants, by poaching employees and using the technical and commercial knowledge acquired over the years by their competitor, had intended to destabilize the corporate organization (of the plaintiff) by appropriating the commercial goodwill of the latter (see Court of Cassation #13424/2008 and Court of Cassation #28215/2008) () in clear breach of the general principle of fairness as at art. 2598, n 3, civil code. (Counsels: Vittorio Provera and Marta Filadoro)

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