N° 52 October 2011

Trifirò & Partners Law Firm

As October's newsletter contains a wealth of information and breaking news my editorial will be short and succinct. The Focus feature of the Employment Law section deals with the publication in the Official Gazette, on October 10, of the Omnibus Act on apprenticeship. This issue is of significant relevance. The article examines the import of the new provisions, approved on July 28, and points out the innovative elements. A must read. The same focus also provides the link to access circular n° 24, 12 September 2011, of the Ministry of Labour, dealing with qualifying period pursuant to Legislative Decree #138/2011. The “Firm Cases” section opens up with the Ruling of the Month, dedicated to the issue of collective dismissal procedure. The Court of Appeal of Milan overturns a ruling of the Tribunal by revoking an anti-union decree (pursuant to art. 28 Act #300/1970) and finds without grounds the alleged anti-union conduct of the company, regarding a complex and farreaching case. The Other Rulings section features decisions obtained by the firm on issues like contracting, unjustified dismissal of an executive, no competition accord and, lastly, the questioning of the amount of accrued salary termination indemnity. The Civil Law section opens up with a Focus on a highly topical issue, namely, the debt rescheduling of cash-starved companies. The article, which is part of a dossier compiled by the firm and which is reported in the Publications section, stresses the divers aspects of the current provisions applicable to ailing businesses and the remedies provided for such companies. Our “Information Brief” regards the proposed regulations of the Stock Exchange watchdog (Consob) with respect to the remuneration of directors and senior managers of listed companies. We trust, you'll find the reading enriching and we'll meet again next month. Stefano Beretta and the editorial staff: Stefano Trifirò, Marina Tona, Francesco Autelitano, Luca DʼArco, Teresa Cofano, Claudio Ponari,Tommaso Targa and Diego Meucci

• Employment Law • Focus 2 • Firm Cases 4 • Civil Law, Commercial, Insurance • Focus 7 • Information brief 7 • Contacts 8

N°52 October 2011

Employment Law
The new Act on Apprenticeship
By Luca D’Arco

The Omnibus Act on apprenticeship (Legislative Decree #167, 14 September 2011) was published on the Official Gazette n° 236, 10 October 2011. The objective of lawmakers was to streamline and liberalize the system from a series of bureaucratic and legal hurdles that, to this day, had hobbled the procedure. The new system maintains the already existing division into vocational qualification, professional training and higher training and research. The main innovation regards the attribution of apprenticeship regulations to the sole and exclusive responsibility of collective bargain agreements, provided they remain within the bounds of the principles laid down in the Omnibus Act (such as, for instance, the written form, the ban on piecework retribution, the possibility to rank the worker to two levels below the position deserved, or as alternative to fix retribution on a sliding scale in respect to seniority, the presence of a company tutor/reference, the ban to discontinue the contract during the qualifying period absent just cause or justified motive, the transformation into permanent contract where at the end of the qualifying period the right to terminate – with notice - the contract is not exercised). The number of trainees may not exceed 100% of the qualified and skilled workforce employed by the employer. Where the employer does not have a personal qualified workforce or has less than 3 persons in his employ, he may hire up to 3 apprentices. In some cases where peculiar standards and systems apply, the number of apprentices under contract is not subject to a limitation of numbers, save where collective agreements provide otherwise. Apprentices are subjected to a reduced contribution rate of 10% which may be applied also to the year following the termination of the qualifying period, where the contract becomes a permanent employment contract. Coming down to the different categories of apprenticeship we find:

for vocational qualification and diploma

This category may be applied to all branches of business where to obtain a qualification or a diploma by persons aged between 15 and 25. The duration of the apprenticeship is fixed on the basis of the qualification or diploma to be reached and, in any event, may not exceed 3 years (4 years in the case of 4-year regional diplomas). The regulation of the vocational training programs for qualification and diploma are under the cognizance of the regions.


This category may be applied to all branches of business, private or governmental, where to obtain a professional qualification with a view to employment contract by persons aged between 18 (17 for persons who already possess a professional qualification) and 29.

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The significant change is the exclusion of any limit of age whatsoever to recruiting idled workers for apprenticeship. The accords between management and unions and the collective agreements set forth on the basis of the age and of the type of contractual qualification to be reached the length of the apprenticeship which, in any event, may not exceed 3 years (5 years for artisans). training and research

This category may be applied to all branches of research activity or to obtain a diploma or degree from a high school or a college, for post-graduate qualifications or doctorates, or where a training period is required prior to accessing divers professions (barristers, tax consultants, public notaries, etc) for persons aged between 18 (17 for persons who already possess a professional qualification) and 29. The regulation and the duration of the qualifying period is under the cognizance of the regions, in accord with the organizing agencies and the trade associations.

The circular n° 24, 12 September 2011, issued by the Ministry of Labour, provides important clarifications with regard to art. 11 of Legislative Decree #138/2011, which sets down the essential contours of the protection of trainees, with a clear view to reminding the objective of apprenticeship, namely, the training and orientation of the young. The circular, in particular, makes clear that the new provisions are not retroactive and do not apply to qualifying periods started or approved prior to 13 August last.

N°52 October 2011


Employment Law
Ruling of the Month

COLLECTIVE DISMISSAL PURSUANT TO ACT #223/1991. UNDER ART. 4, §9, WHERE RETIREMENT ELIGIBILITY IS THE CRITERION, ONLY THE VIOLATION OF SAID CRITERION MAY BE ENVISAGED AND NOT THE FAILED COMMUNICATION OF THE MODES OF APPLICATION OF SAID CRITERION (Court of Appeal of Milan, 20 September 2011) The Court of Appeal of Milan overturned the sentence of the Tribunal, and thus revoked the decree in pursuance of art. 28 Act #300/1970 under which the conduct of a company had been declared in breach of anti-union practice standards. The case arose from a collective dismissal procedure, under art. 4 §9 of Act #223/1991 ("Once reached a union accord or exhausted the procedure as at §6, 7 and 8, the enterprise may idle the redundant clerks, workers and managers, notifying the termination in writing to each one of them, in due respect of the notice period. Concurrently, the list of the idled workers, bearing the indication for each one of them the name, place of residence, qualification, corporate grade, age, family position, as well as specific indications of the modes whereby the tests of selection were applied in pursuance of art. 5, §1, must be communicated in writing to the Regional Employment Bureau of competence, to the Regional Employment Commission and to the trade associations as at §2"). In particular, in the procedure that led to the action for anti-union practices, the company and the unions had underwritten the minutes of an accord whereby, with a view to selecting the workers to be idled, the parties agreed to the application of the test of the requisites for retirement at the time of the communication of the termination of employment contract, and to the possibility of reaching said requisites inside the maximum period of enjoyment of indemnity benefits for idle workers. Thereafter, another union who was not signatory to the minutes of the accord, impugned the procedure and asked, in a move alleging anti-union practice and designed to obtain the reintegration of two of the workers dismissed (the others, affiliated to other unions, had agreed to the accord), claimed that the communication, pursuant to art. 4, §9, Act #223/1991, failed to mention the modes whereby the tests of selection had been applied, and this despite the fact that the two workers for whom the union asked reintegration met the requisites laid down in the accord. The Tribunal accepted the claim of anti-union practice and asked that the two workers be reinstated. The Tribunal censured the communication sent by the company under and pursuant to art. 4, §9, Act #223/1991, stating that said company had failed “to mention the modes of application of the tests of selection” and that although the test (eligibility to retirement) had been agreed upon “a specification of the practical modes of application was nonetheless possible and would have permitted to verify the propriety of the application of the test proper", and that the company “could and should have notified the data to all the single employees envisaged and not only to those effectively dismissed, specifying the seniority in contributions”. The Court of Appeal overturned the ruling and stated in its preamble that not every breach of the procedure crafted by lawmakers and regarding collective dismissal qualified as anti-union practice.

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With respect to art. 4, §9, Act #223/1991, the judges of the Court of Appeal stated that the test of eligibility to retirement or proximity to said eligibility did not leave any room for the employer to use discretionary power as the scheme was based on a rating system. As a result, “in all likelihood a failed communication of the of the modes of application of the sole test selected was highly improbable, though what could have been possible was a violation of the very test, since the data used for the test selected where in the knowledge of each of the workers as they were instrumental to the very application of said test”. (Counsels: Giacinto Favalli and Damiana Lesce)

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Other Rulings

JUST CAUSE DISMISSAL - ABSENT JUST CAUSE AND TITLE TO INDEMNITY ABSENT NOTICE AND TO MAXIMUM ADDITIONAL INDEMNITY - WORKPLACE BULLYING (Tribunal of Bergamo, 7 July 2011) The labour judge of the Tribunal of Bergamo ascertained the illegitimacy and absence of justified motive of the dismissal of a senior executive of a big corporation who, after a first disciplinary sanction, had received a second grievance that had led to his being dismissed for just cause. The tribunal pointed out, in particular, that the grievances were mere pretence and groundless and that the dismissal was “only the final touch to an attempt that had long since been set up to segregate and void of his powers the claimant, found disturbing for a number of reasons, also maybe for the obstinacy of his character”. So much so that the company had addressed a first sanction that, beyond being groundless, was in any event unlawful insofar as it was not provided for in the collective agreement for industry senior executives applicable to employment relationships. The company was condemned to pay the indemnity for absence of notice and recognized the right of the executive to the maximum of the additional indemnity. The Tribunal also ascertained the existence of workplace bullying on the basis of the evidence submitted, such as the fact that in the space of a sole month after 30 years of faultless service the executive had been subjected to 3 grievance procedures, that he had been clearly quarantined and also shorn of many powers and responsibilities. (Counsels: Angelo Di Gioia and Giacinto Favalli) NO COMPETITION PACT - REQUISITES - REDUCED FINE (Tribunal of Bergamo, 30 September 2011) A company brought action against an ex employee for breach of the no competition pact and sued him for the payment of the quantum of money provided for in case of breach and for an additional pecuniary sanction. At the time of recruitment, the company, operating in the branch of chemicals, had underwritten with the employee a pact of no competition for a five year period which provided for the payment of a fine of 100 million Lire (€42,962.42) in case of breach. When the employment contract was discontinued, the company discovered that the ex employee had been immediately hired by two competitors and employed as commercial director in the same branches (textile and cosmetics) where he had worked previously. The judge first examined whether the no competition pact was lawful and held that - without prejudice to the geographical extension and the duration of the pact as originally agreed - the fact that the ex employee had found shortly after the termination of his contract a new job at two companies operating in the same branch of industry and situated in the same province where his former employer was situated, made the no competition pact operative (for which, moreover, a substantial retribution had been paid for 4 years). An expertise had also ascertained that the two new employers had commercialized products similar to those of the company the ex employee had signed the pact with, and in the same branches of industry. The judge condemned the ex employee to payment of the penalty agreed upon in the pact and to a reduced pecuniary sanction in equity, in view of the fact that the penalty was already substantial and that, in any event, the non performance would have caused limited damage on the market of the former employer. (Counsels: Vittorio Provera and Marta Filadoro)

N°52 October 2011


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Civil, Commercial, Insurance Law
By Francesco Autelitano

The current legal system is aimed at preventing the winding up of insolvent companies and at encouraging the financial recovery of temporarily struggling and ailing businesses, with a view to keeping them on the market. Companies facing bankruptcy procedure may resort to the following schemes:

recovery plan (art. 67, §3, d, Financial Act) ✦accord on debt rescheduling (art. 182 bis, Financial Act) ✦preventive administration (art. 160 ff, Financial Act) ✦out-of-court accords with the single creditors

By Vittorio Provera and Francesco Cristiano

As mentioned in the May issue of our newsletter, legislative Decree 30 December 2010 #259 (published in the Official Gazette on 7 February 2011), incorporates the recommendations 2004/913/EC and 2009/385/EC with respect to the remuneration of boards of management and of control, of managing directors and directors holding key positions in listed companies. The new law provides that, at least 21 days before convocation of the general meeting for the approval of the financial report, listed companies should issue to the shareholders and the public a "Report on remunerations", under art. 123-ter of Legislative Decree 24 February 1998, #58 (Comprehensive Financial Act). After consultations with the Bank of Italy, the Stock Exchange watchdog (Consob) was appointed to issue the regulations for the implementation of the disclosures to be contained in the Report on remunerations, specifying, in particular, the degree of details such information shall have to contain. On October 10, 2011, the Consob posted on its website a consultation document listing the proposed modifications to the regulations.
N°52 October 2011 7

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N°52 October 2011


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