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Workforce Flexibility and Government Incentives in times of Covid-19 - Italy

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

The Collective Bargaining Agreements applied by the employer at national, territorial and/or company level, might provide special flexibility measures, such as bank hours and multi-period working hours that, depending on the case, might be unilaterally activated by the employer, or prior unions consultation or approval. These treatments do not benefit for the moment of state subsidies.

Furthermore, the Government “encouraged” the utilization by the employers and employees of accrued holidays and permits. It is not clear if the employer can impose the employees to use also holidays and permits not yet accrued, or only holidays and permits already accrued but not used by the employees. At the moment, also these measures do not benefit of state subsidies.

Finally, with the Law Decree 18/2020 dated March 17, 2020, an additional parental leave has been granted for private sector employees, for public sector employees and for certain self-employed workers, parents of children aged not more than 12 years or of disabled children. The parental leave provide the possibility for such workers to refrain temporarily from work, for a continuous or split period of 15 days, with the right to receive an indemnity equal to 50 per cent of their salary. The same Law Decree also provided an extra amount of 12 days of paid leave for the care of disabled family members, to be used in March and April 2020.

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

As far as concerns legal arrangements provided by the Collective Agreements, special unions procedures might be requested therein.Special parental leave do not require specific procedures to be granted to the employees.

As far as concerns the additional paid leave for the care of disabled family members, in case such treatment is requested by healthcare workers, the leave can be authorized only after verification of compatibility with the needs of medical facilities.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

Special temporary wage guarantee funds, connected to the health emergency, have been implemented by the Italian Government in the last weeks, in order to integrate the salaries of the employees in case of temporary contractions of the activities and/or shutdown of the companies due to the risk of contagion. In particular:

  1. New “Ordinary” Temporary Wage Guarantee Fund;
  2. New “Ordinary” Temporary Wage Guarantee Fund for companies already benefiting of an extraordinary temporary wage guarantee fund;
  3. New Temporary Wage Guarantee Fund “In Derogation”;
  4. “Extraordinary” Temporary Wage Guarantee Fund for the “Red Zone”

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

  1. New “Ordinary” Temporary Wage Guarantee Fund:
    • Companies: industrial companies (manufacturing, transport, building and others), production and employment cooperatives which carry out activity similar to industrial companies and to craft firms in the building sector.
    • Employees: the persons employed on the date of entry into force of Law Decree 23 February 2020, n. 6, even if they have not yet performed 90 days of work
  2. New “Ordinary” Temporary Wage Guarantee Fund for companies already benefiting of an extraordinary temporary wage guarantee fund:
    • Companies: companies that, at the date of entry into force of Legislative Decree 23 February 2020, no. 6, were benefiting of an extraordinary temporary wage guarantee fund treatment; companies that are benefiting of a solidarity subsidy.
    • Employees: employees already benefiting of an extraordinary temporary wage guarantee fund treatment.
  3. New Temporary Wage Guarantee Fund “In Derogation”:
    • Companies: companies operating in the private sector (including agricultural, fisheries and non-profit sector, including religious organizations, and regardless of the number of employees), for which the treatments provided for by the current provisions regarding safety treatments are not applicable
  4. “Extraordinary” Temporary Wage Guarantee Fund for the “Red Zone” and “Yellow Zone”:
    • Companies: companies falling within the municipalities of the so-called "Red zone" and the “Yellow Zone” regions of Lombardy, Veneto and Emilia-Romagna
    • Employees: if the companies are not located in the "Red Zone" or in the "Yellow Zone", the subsidy can be requested limited to the employees resident and/or domiciled in the Red or Yellow Zone

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

  1. New “Ordinary” Temporary Wage Guarantee Fund: the Law Decree 18/2020 provided for a simplified trade union consultation procedure in case of request of the treatment, which can also take place after the request of intervention and trough telematic means. The union agreement is not requested. The duration of the temporary wage guarantee fund will not be computed in the maximum overall duration provided by the normal provisions, and the treatment is exempted from the additional contribution.
  2. New “Ordinary” Temporary Wage Guarantee Fund for companies already benefiting of an extraordinary temporary wage guarantee fund: the granting of “Ordinary” treatment is subject to the prior suspension of the effects of the previously authorized extraordinary intervention. The simplified procedure should be the same provided for the New “Ordinary” Temporary Wage Guarantee Fund.
  3. New Temporary Wage Guarantee Fund “In Derogation”: except for companies with no more than 5 employees, this treatment requires a prior union agreement with the more representative trade unions, which can also be concluded electronically. The intervention is authorized by decree of the concerned Italian Regions and the Italian Autonomous Provinces, to be sent electronically to INPS within 48 hours from its adoption, along with the list of beneficiaries.
  4. “Extraordinary” Temporary Wage Guarantee Fund for the “Red Zone” and “Yellow Zone”: According to art. 15 and 17 of the Law Decree 9/2020, still applicable even after the Law Decree 18/2020, the simplified procedure this treatment requires a prior union agreement with the more representative trade unions, and the intervention is authorized by decree of the concerned Italian Regions (Lombardia, Veneto, and Emilia Romagna), to be sent electronically to INPS within 48 hours from its adoption, along with the list of beneficiaries

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 09 April 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.