The ban of dismissals in Italy as a consequence of Covid-19 pandemic
In order to contain the social effects of the ongoing health emergency due to the spread of the COVID-19 pandemic, the Italian Government has introduced the prohibition, for all companies, regardless of the number of their employees, to dismiss employees for economic reasons.
The ban, initially introduced with art. 46 of Decree Law no. 18 of 17 March 2020 (so-called Decree “Cura Italia” i.e. “Cure Italy”) and repeatedly extended by the following Decrees enacted by the Italian Government, lastly has been extended by Law no. 178 of 30 December 2020 (so-called “Legge di Bilancio” i.e. “Budget Law”) until 31 March 2021.
So far, according to the statements made by the Minister of Labour, Andrea Orlando, the ban could be extended until 30 June 2021.
Despite the general ban to terminate employment relationships for economic reasons, there are some exceptions which allow companies to terminate legitimately the working relationships, also during this period of pandemic.
As a matter of fact, the ban does not include: 1) dismissals for “disciplinary” reasons; 2) dismissals ordered during or at the end of the probationary period and apprenticeship period; 3) dismissals for exceeding the protected period; 4) dismissals for reaching retirement age; 5) dismissals of domestic workers and executives.
And, in addition to the above, pursuant to Article 1, paragraph 311, of the abovementioned “Budget Law”, the ban does not include: 1) dismissals ordered after the permanent closure of the business activity, and 2) dismissals ordered as a consequence of bankruptcy.
According to the emergency rules, the companies have also the chance to terminate the redundant employments agreements if a general agreement of, so called, Incentivo all’Esodo – i.e. an agreement with which the companies involved declare that the employees that will accept the termination of their employment relationships will receive an economical incentive to leave – with the most representative confederations at a national level is reached.
This kind of agreement will be effective regarding the employees who will expressly declare to join it.
The provision regarding the Incentivo all’Esodo is an “exceptional” provision and has a “temporary” validity, since it is linked to the emergency situation. Therefore, so far, it will be effective until 31 March 2021 (in case of an extension of the ban of dismissals until 30 June 2021, probably, also the provision regarding Incentivo all’Esodo shall be confirmed).
Another “exceptional” provision regards the employees who expressly declare to join the general agreement: they will be granted with the unemployment allowance (the so-called “NASPI”).
From a technical point of view, it is necessary that the general agreement contains the indication of the specific amount (possibly related to the classification and length of service of each employee) to be paid to the employees, together with the method of calculation used to define it, as well as the indication of a deadline by which the employees will have to join the agreement.
To this end, it is advisable that employees communicate their intention to adhere in writing.
It is discussed also whether, to avoid the risk of afterthought, it is necessary to enter into an individual settlement agreement between each employee and the company. In our opinion, this fulfilment shall be considered essential to ensure a total closure in relation to all the aspects related to the working relationship.