TRIFIRÒ & PARTNERS AVVOCATI MILAN ROME GENOA TURIN TRENTO WWW.TRIFIRO.IT

Editorial The spring issue of our newsletter opens up on a heartfelt homage to the 150th anniversary of the Unity of Italy. Our firm was proud, like so many across the country, to hang out the flag of Italy.Indeed, from the outset the composition of the firm reflected the different regions that came to make up Italy, bringing together talents and skills sharing the same calling. That is also what the flag hanging out our head office in Milan meant to convey.

Coming to the contents of our newsletter, the Focus feature of our Employment Law section rides on top with new insights on the reform of employment legislation. Our previous newsletter had reported on the modifications introduced by the so-called “one-thousand extensions” Decree, designed to modify the statute of limitation to impugn dismissals. However, in trying to modify the statute of limitation to impugn decisions, lawmakers only succeeded in making things more intricate, as explained by our partner Marina Olgiati in the Focus article.

The Firm Rulings section features two interesting cases. “The Ruling of the Month” is one of them and is analyzed by partner Anna Maria Corna and regards a tax-assessment notice from Social Security. An issue that concerns companies at large.

The “Other Rulings” section examines divers forms of employment contract relationships that lead to dismissal (never insult your boss! ...only harbour the thought of doing so), or to termination for justified cause. A case regards, in particular, anti-union practice. Don't miss out on that section!

Our Information Brief, by partner Vittorio Provera, deals with the 10% tax incentive on retribution tied to greater productivity and analyzes art. 1 of Act 220/2010.

Stefano Beretta and the editorial staff: Stefano Trifirò, Marina Tona, Francesco Autelitano, Luca D’Arco, Teresa Cofano, Claudio Ponari, Tommaso Targa and Diego Meucci

This is an abridged and edited version in English of Trifirò & Partners newsletter. If you wish a full-length English translation, please contact Stefano Trifirò: stefano.trifiro@trifiro.it or newsletter@trifiro.it

NEWSLETTER T&P N°45 YEAR V MARCH 2011

NEWSLETTERTrifirò & Partners Avvocati

CONTENTS

✦ EDITORIAL

✦ EMPLOYMENT LAW

✦ FOCUS 2

✦ FIRM CASES 4

✦ CIVIL LAW, COMMERCIAL,INSURANCE

✦ INSURANCE 6

✦ INFORMATION BRIEF 7

✦ CONTACTS 8

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FocusTYPES OF EMPLOYMENT CONTRACTS WHERE EXTENSION OF STATUTE OF LIMITATION TO IMPUGN DISMISSAL IS APPLICABLE, PURSUANT TO ART. 32, §1BIS, AS INTRODUCED BY THE SO-CALLED "ONE-THOUSAND EXTENSIONS" DECREE

By Marina Olgiati

The Act of 26 February 2011 has converted with modifications the Legislative Decree of 29 December 2010 #255, also known as “the one-thousand extensions” decree.

The § 54 of art. 2 of said LD introduces a modification, at art. 32 of the new employment legislation package (Act #183/2010), that stipulates, after §1 and under §1 bis, that “in the first instance of application, the provisions set forth as at art. 6 §1 of Act #604/1966, as modified by the present article, pertaining to the statute of limitation to impugn dismissal, take effect as from 31 December 2011”.

For the record, art. 32 of the employment reform package, which had modified art. 6, §1 and 2 of Act #604, providing that impugnation of dismissal, to be submitted inside 60 days from notification of the causes, loses its efficacy where it is not followed, in the subsequent 270 days, by the filing of a legal recourse or by the request of an attempt at conciliation and arbitration. In addition, as expressly set forth under § 3 and 4 of art. 32, the provisions above mentioned are applicable not only to dismissals flowing from payroll employment contracts, but also to terminations of work relationships flowing from the status of the contract itself (for instance, termination of non-declared and non-documented employment); rescission of on-going work on contract or contracts on project; nullification of termination clause introduced in employment contracts (whether still on-going or already terminated); termination of contract pursuant to art. 2112 of the civil code (through transfer or leasing of undertaking); and other cases where employment is in reality expected to be put under the responsibility of an entity other than the one nominally in charge (as in cases of unlawful sub-contracting).

The new §1 bis of art. 32 of the new employment regulation package crafted by lawmakers raises not a few problems of interpretation.

The original intent of lawmakers in moving down the statute of limitation was to facilitate the gradual application of the new terms set for such impugnation of dismissals as had been somewhat bungled and, in particular, for fix-term contracts. The intent was also to set new deadlines, which had expired on 23 January 2011 (60 days from the coming into force of the set of new employment provisions), for those who had failed to impugn dismissal.

Yet, it would appear that §1 bis, interpreted literally, only designs to move down the provisions that provide for impugnation within 60 days of the termination of the payroll employment contract, for ehich, instead, the deadline fixed is in force since 1966.

With regards to such permanent employment contracts, the suspension of the efficacy of impugnation provisions could only bear some import on cases where it had never been applied (for instance, invalid dismissal-mother with child or woman worker getting married - or extension of the grace period).

NEWSLETTER T&P N°45 YEAR V PAGE 2

Employment Law

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NEWSLETTER T&P N°45 YEAR V PAGE 3

Thus, if the provision here examined, interpreted literally, does not apply to recent cases for which the obligation to impugn the dismissal has been extended, the situation for all such cases and, in particular, for fix-term contracts, would be as follows:

✦those who have impugned the dismissal inside the 60 days from the taking effect of the new provisions, or before 23 January 2011 if discontinued before 24 November 2010, or who, discontinued after said date, have impugned before 27 February 2011 – date of coming into effect of Act #10/2011 – must act within the subsequent period of 270 days, or their right to impugnation shall lapse;

✦those who did not do so, though qualifying to the conditions to impugn dismissal, may no longer seek remedy owing to lapse of statute.

Employees on permanent employment contracts, to whom the obligation to impugn dismissal has always been subject to the 60-day rule, instead, might wait until 31 December 2011, because the coming into force of art. 6 §1, for them, has been moved down to the end of the year. Moreover, the unions are pushing for a different interpretation whereby, without prejudice to the set term of 270 days for dismissals and terminations already impugned inside the 60 days, dismissals and termination impugned after the taking effect of the "one-thousand extensions" decree and until 31 December 2011 would be subject to the old 60-day rule pursuant to §6 of Act #604, as applied before the new employment provision package and which provided for a 5-year term to take legal action.

Lastly, for fix-term and/or precarious contracts underwritten before 24 November 2010 and not impugned, impugnation might be possible inside the new set term fixed by the “one-thousand extensions” decree. True to say, to satisfy to the intent to postdate the efficacy of the terms for such impugnation as applicable to the new types of contracts, lawmakers, under §1 bis of Act #10/2011, should have expressly referred to §3 and 4 of art. 32 of the new employment provisions.

The difficulty of interpretation of the provisions, of which lawmakers are keenly aware, has prompted the Lower Chamber to table the issue and to ask the government to clarify the issue. The saga continues.

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Firm CasesNEWSLETTER T&P N°45 YEAR V PAGE 4

RULING OF THE MONTHTAX-ASSESSMENT NOTICE – SOCIAL SECURITY CREDIT AND JOINT OBLIGATION OF EMPLOYER, PURSUANT TO LEGISLATIVE DECREE #276/2003, ART. 29(Tribunal of Milan, 28 January 2011)

The case concerns a company who received a tax-assessment notice from Social Security, as supplier of services to other companies which, in their turn, had supplied said services to a co-operative and, as obliged jointly pursuant to art. 29, Legislative Decree #276/2003, whereby “In case of supply of works or of services the principal entrepreneur or the employer is obliged jointly with the contractor and with each of such sub-contractors as there may be inside the limit of two years after termination of the contract of supply, to duly pay the workers the retributions and the social security contributions”. The tax-assessment notice amounted to about €450,000, half of which for “additional sums” and “interests on default”, on the sole ground of an inspection statement which requested the company to pay its share of the joint obligation, namely about €260,000, partly for non-payment of contributions, pursuant to the Ministerial Decree #10, and partly as “collection for undue mobility”. The company paid solely the amount that corresponded to the non-payment of contributions and took action against the outstanding claimed, pointing out that it was not held to pay for a third party, absent a final decision of Social Security, and for a charge of “collection for undue mobility” that made no sense, regardless of the fact that the company was not held, as jointly obliged, to pay such sanctions, and that, in any event, as far as it was concerned, she had done nothing whatsoever as might fall under Act #388/2000, at art. 116, §8, letter a) or b).The Tribunal of Milan found illegitimate the credit requested by Social Security for the part regarding the title “collection for undue mobility” and stressed that art. 12 of Presidential Decree #602/1973 - as revamped under art. 8 of Legislative Decree #32/2001, and applicable, pursuant to Legislative Decree #46/99, also to contribution subject matters - prescribes that an indication, succinct as it might be, must report the reasons for the credit, which were non-existent in the case at hand. The sentence also revoked the tax-assessment notice for all the sanctions, inclusive of those related to the sum paid, pointing out that the company as principal contractor had had no relationship with those who had followed up on the contracting and sub-contracting, and that it had been in no position to oversee the works of the latter, so that the payment upon issuance of the social security tax assessment was to be viewed as reckless, and excluding also cases as provided for by Act #388/2000, at art. 116, §8, letter a) or b).

(Counsel: Anna Maria Corna)

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DISMISSAL FOR JUST CAUSE – INSULTING PHRASES(Tribunal of Rome, 10 January 2011)

You'd better keep your thoughts to yourself when you want to tell your immediate superior "f--- off". An employee thought better of it and, in the course of a heated argument with co-workers, turned to his superior, who had stepped in to try and calm things down, and told twice to the unhappy peace maker to “f-off”. The employee was dismissed for just cause. The Judge of the Employment Tribunal of Rome upheld the dismissal and found proportionate to the offence. In particular, the Judge found it inadmissible for an employee to even address abusive phrases to a co-worker, as reported earlier, holding also as an aggravating circumstance the fact that the victim of the abuse was a superior who had intervened to calm things down and that, in addition, the abusive words had been hurled at him twice and in the presence of other co-workers, and despite the superior's attempts to cool things off.(Counsels: Angelo Di Gioia and Paolo Zucchinali)

DISMISSAL – SUPPRESSION OF THE POSITION(Tribunal of Rome, 15 March 2011)

In a case where the employee had impugned termination caused by suppression of the position, the Tribunal of Rome rejected the claim of the employee on the grounds following below. After reminding the inalienable right of a company to organize its going concern as it wishes, the Judge held that the company was perfectly legitimate to ascribe the responsibility of a managerial area to the executive of a branch, thereafter dismissed upon suppression of said area, for which the employee had worked.As regards re-assignment, the judge said that the employee may not limit himself to generic complaints. Lastly, the Tribunal held that the offer made before termination to the worker to be assigned to other tasks and also in another branch, made superfluous the evaluation of possible alternative positions in other branches of the company. Still with a view to delineating the contours of an area suitable for the re-assignment of the worker, the Tribunal held as insufficient the generic allegations of the latter with regards to the so-called corporate connections between different legal entities with the consequence that such evaluation must be circumscribed to the company with which the employment contract was underwritten. (Counsels: Giacinto Favalli, Marina Tona and Paolo Zucchinali)

QUALIFICATIONS AS AT ART. 28 OF THE STATUTE OF WORKERS(Tribunal of Civitavecchia, 10 February 2011)

A trade union took action pursuant to art. 28, Act #300/70, claiming anti-union practice by the employer. The company challenged the claim and argued that said union was legitimately representative. In line with a consolidated court practice in similar cases, the tribunal held that the “nationwide” nature which a trade union should prove, so as to lend due weight to its local branch to act pursuant to art. 28, does not imply merely a form of territorial and geographical extension across the country, but must also translate into such practical activities by said branch as shows the pursuit of national goals that somehow transcend local affairs. The union is therefore expected to show that, through the achievement of some objectives - such as, for instance, the underwriting of a collective agreement, the joining of a national collective accord underwritten by other unions or the carrying out of contractual bargains, co-ordinations and such activities as follow the national policy of the trade union of affiliation - it effectively represents collective interests and aims for the protection of a large number of workers.(Counsels: Giorgio Molteni and Claudio Ponari)

NEWSLETTER T&P N°45 YEAR V PAGE 5

OTHER RULINGS

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Civil, Commercial and Insurance Law

NEWSLETTER T&P N°45 YEAR V PAGE 6

InsuranceBy Bonaventura Minutolo and Teresa Cofano

InsuranceBy Bonaventura Minutolo and Teresa Cofano

EQUAL TREATMENT -

DETERMINATION OF

INSURANCE PREMIUM

Art. 5, n° 2 of the directive of the European Council dated 13 December

2004/113/EC, which introduces a derogation to the principle of equal

treatment between men and women to determine premiums and

performance in the branch of insurance, is invalid with effect as from 21

December 2012.(EC Grand Section Court of Justice, 1 March 2011, #236)

RCA - RECOURSE AND

ACTION FOR

RECOVERY

Premises of gas stations for users fall inside the notion of such public areas

as roads for vehicular traffic, whereby, even though such premises be private

property, the notion of public area implies that they are open to an unspecified number of persons. For such motive, the injured party in a road accident that

happened inside an area qualifying as gas station has direct action against

the insurer of the injuring party.

(Court of Cassation, 3 March 2011, #5111)

RISK INSURANCE

In insurance policies against damages, the fact establishing the right of the

insured party to be indemnified consists in such damage as occurs and is

depending from a risk insured, and within the spatial and temporal

dimensions in which the guarantee operates, so that the onus is on the

insured party to prove that such a risk occurred as is covered by the

insurance guarantee and that said risk caused the damage for which

indemnity is claimed; the same evidentiary onus falls on the insured party with

regards to the spatial and temporal dimensions of the insurance policy.

(Tribunal of Teramo, 19 January 2011, #25)

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NEWSLETTER T&P N°45 YEAR V PAGE 7

Information briefBy Vittorio Provera

Circular 3/E of 14/02/2011 issued by the Internal Revenue Service

Lawmakers had introduced with the Legislative Decree 27/05/2008, #93 a fiscal incentive for the year 2008 whereby a substitution tax of 10% (within overall annual gross revenues of €3.000,00) was given employees for overtime performance, additional time within the ambit of part-time contracts and premiums linked to higher productivity, innovation and organizational efficiency.

At the time, the Revenue Service had specified that such sums needed not be inserted in collective bargain agreements and could even be left to the better judgement of the employer when it came to valuating higher productivity, innovation and efficiency. This incentive had been extended to 2009 and 2010, though restricted to premiums for higher productivity.

Now, and with regards to the tax year 2011 Act #220/2010, art. 1. §47 - in actuation of art, 53, §1 of Legislative Decree #78/2010 - provides for the application of the system of the substitute 10% tax (inside overall revenues of €6.000,00) in case of retributions in actuation of territorial collective agreements or accords or company accords, and for increases in productivity, quality, organizational efficiency in relation to goals calibrated to economic conjuncture, profits of the company or other such relevant criteria as may inprove company competitiveness.

In other words, the new provisions (also in light of Circular 3/E of 14/02/2011 issued by the Internal Revenue Service) subjects the incentive for the year to end to the condition that premium retributions shall be issued in actuation of territorial, collective or corporate accords or contracts, thus excluding from the incentive such emoluments based on on national collective bargain agreements or individual accords between employee and employer.

On that score, it should be noted that tax de-rating on premiums, making up the incentive aimed at improving corporate negotiations and increasing productivity, rests also on the assumption that territorial or corporate accords provide for the type of such work organization as, in the views of employers, best ensures higher productivity and competitiveness, without it being necessary to underline formally and expressly that premium retributions be tied to increase in productivity.

The fiscal incentive applies to revenues amounting to a maximum of €40.000,00, inclusive of all retributions received during the year 2011 for salaried employment, pension benefits, cheques that amount in effect to pension benefits (as in the case of an employee with several part-time contracts in different companies).

In such a context, a protocol dated 8 March 2011 was signed by the Employers' Association (Confindustria) and the unions (CGIL, CISL, UIL) to introduce a framework of territorial accord that may be used as a basis for territorial accords that enable the actuation of the goals set by the new provisions and with regards to the application of the substitute 10% tax to the ancillary components of the retribution tied to increase in productivity.

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