Transfers of business in Italy

A high level outline of business transfers in Italy.

Introduction

Article 2112, paragraphs 1–3, of the Civil Code implement the European Acquired Rights Directive.

Scope of the law

Article 2112, paragraphs 1–3, of the Civil Code applies when a “business is transferred”. The definition of “transfer of a business” is defined very widely and occurs (i) where there is any transaction which results in a change of ownership of an organised economic entity, with or without profit, and (ii) the organised economic entity existed prior to the transfer and maintains its identity afterwards.

Effect of transfer on contracts of employment

On a transfer of a business, contracts of employment are not terminated but have effect as if originally made with the transferee.

Right of objection

Employees can object to the transfer of their contract of employment if the transfer involves a substantial change in their working conditions to their material detriment. In order to object, the employee must terminate their contract within three months of the transfer. For managers, this period may be made longer by an applicable National Collective Agreement (CCNL).

Occupational pension schemes

Pension schemes provided by the National Collective Agreement CCNL, occupational pension scheme obligations transfer to the transferee, provided that the same CCNL applies to both transferor and transferee. With regards to “private” pension schemes (ie not mandatory), this is generally the subject of negotiations.

Recognition and collective agreements

The transferee is obliged to apply the same terms and conditions provided for by the relevant national, regional and company-level collective agreements in force at the date of the transfer, until the date of their expiry.

Employee representatives

There is no provision regarding employee representatives and generally it is a matter for negotiation.

Changing terms and conditions following a transfer

Generally, employees continue to be employed by the transferee on the same terms and conditions on which they were employed by the transferor.

Dismissal because of transfer

Dismissals (whether individual or collective) are not lawful if the reason for the dismissals is a transfer of business.  This means that the transferor cannot carry out collective dismissals in order to reduce the employment costs of the business to be transferred.

Transferor’s obligations to inform transferee

Standard practice is that during negotiations between the transferor and transferee, the transferor provides information such as name of employees, length of service and pending claims brought by employees to be transferred.

Information and consultation requirements

The transferor and/or the transferee must inform and, if so requested by the representative bodies (the trade unions), consult the representative bodies. The duty to inform is mandatory if the transferor employs more than 15 employees (even if the transfer only relates to a part of the business with fewer than 15 employees). The duties to inform and consult are separate duties.

  • The duty to inform is mandatory if the transferor employs more than 15 employees (even if the transfer only relates to a part of the business with fewer than 15 employees) and arises whenever a transfer is proposed.
  • The duty to consult arises only where the trade unions make a request for consultation.
  • Hence, whilst there will always be a duty to inform in connection with a transfer (subject to the size of the workforce) there may not be any duty to consult.

Notifying employees about change of employer

Prior to, or within day one of the transfer of business, the transferor and transferee, separately or jointly, must communicate the change of employer in writing to each transferred employee.

Joint liability

The transferor and transferee are jointly liable for all amounts due to the employees at the time of transfer and for any claims that the employees have at the time of the transfer of business.

Contracting out

Any provision whose purpose is to exclude or limit the application of the law is void.

Registration

Once the transfer has taken place, the transferee must provide written details of the transferred employees to the competent local authority (Centro per l’impiego), within five calendar days of the date of the transfer.

Further detail on business transfers in Italy is available here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.