Member News

New Italian Flexible Work Law Enacted

By AEM Carnelutti

«Balancing, innovating and competing. These are the three seemingly conflicting objectives of flexible working, a new approach to corporate organization where individual employees’ needs fit in with the needs of the company in a complementary manner».

The above quotation was taken from the first paragraph of the Italian Labor Ministry’s website (www.cliclavoro.gov.it) on the Flexible Work Law governed by Law no. 81 dated 22 May 2017 (“FL”), “measures aimed to support flexible organization of work time and place in subordinated employment”. The following brief summary focuses on the essential elements of such new law, which among other things includes specific references to remote monitoring of workers (art. 4, Law no. 300 of 20 May 1970, as replaced by art. 23, para. 1, of Leg. Dec. no. 151 of 14 September 2015).

FL can bring a significant development to Italian employment relationships, increasing their flexibility and improving life-work balance for the employee. The FL offers a clear example of practical measures aimed at reducing physical and time constraints linked to workstation jobs through technological tools.

  1. Formal requirements.

An agreement governing “flex work” employment must be in writing. The FL does not limit its coverage to a certain type of employment agreement, which term can be either fixed or indefinite . Also, there is no specific requirement regarding termination of employment, although the general duty of prior notice pursuant to the Italian labor law still applies.

The “flex work” employment agreement must identify, among other things:

  • – Rules on work performed outside the company’s premises, including employer’s management power and tools used by the employees;
  • – Employees’ time off and measures aimed at ensuring disconnection from technological working tools;
  • – Employee’s conduct in the context of assignments performed outside of the company’s premises that trigger the application of disciplinary sanctions.
  • – Employer’s power to monitor “smart work” employees

Flex work employees’ control and safety.

“Flex work” implies that an employee is absent from the company’s premises. Such absence raises two problems: one is related to the employee’s monitor procedures, and the second problem is assuring compliance with appropriate health safety standards.

Since the employee is outside of the company’s premises, traditional methods to monitor employees cannot be used. Technological methods are also out of the question, as under the Italian Law they are too likely to breach the employee’s privacy. From a legal standpoint, a best practice is to impose on a “flex work” employee with periodic reporting duties. Such duties need to be carefully drafted in order to allow an employer to evaluate employees’ performances outside the workplace. Therefore, employers should carefully consider the guidelines below and report periodically to ensure an effective performance.

With regard to health safety issue, Italian labor law generally requires employers to protect employees whose employment takes place outside of the company’s premises. Flex work agreements may include specific disclosure duties so as to keep employees informed of risks assessed for certain types of performances. Furthermore, it should be noted that the Italian Workplace Safety Institute (INAIL) already provides specific coverage programs for work activities taking place outside the workplace, as long as they are reasonably related to the job duties in question.

Confidential Information

Certain types of business data, company strategies, and other information available in the workplace is most of the times confidential. Many companies adopt personnel policies that require employees to treat such information on a confidential basis and forbid sharing such information with any unauthorized recipient. When employees perform their work remotely, there is a significant risk that the confidentiality will be compromised. Companies should endeavor to maintain the level of confidentiality of “flex work” employees as they rendered their performance at the company’s workplace.

Equal treatment

In an effort to avoid discrimination of employees who do not work at the company’s physical premises, FL specifically grants equal treatment to employees that perform their tasks under a “flex work” agreement. Such protection takes into consideration two parameters:

  • individual parameter: employees who perform the same duties of the “flex work” employee within the company’s premises;
  • material parameter: flex work employees must be granted a treatment not lower than the one globally applied to “internal” employees under national collective bargaining agreements (specifically, Art. 51, of Leg. Dec. no. 81 of June 15, 2015). It should be noted that both national bargaining agreements and second-level (local and/or company) bargaining agreements must be considered to determine this parameter.

The exclusion of flex work employees from overtime, paid leave, time off in lieu and lunch vouchers, are quite controversial, since such work arrangements are not subject to strict working hours and to the need of a predefined workplace. The remote employees manage their time and needs with greater freedom than traditional employees. To determine the lawfulness of these provisions, the actual degree of independence of smart workers in planning their work under an agile mechanism needs to be considered.

Although the main feature of flex work employment is the absence of working hours’ constraints, FL places nonetheless an unsurmountable fence to the time extension of smart work employees where it establishes that “work services are performed […] with the restriction of maximum daily and weekly working hours set out in the law and collective bargaining”. The actual quantity of these maximum (daily and weekly) thresholds may be reasonably identified in the provisions of Leg. Dec. no. 66 dated 8 April 2003, on working hours, according to which, in principle:

  • 1) daily limit: employees are entitled to “eleven hours of consecutive time off every twenty-four hours” (art. 7, par. 1);
  • 2) weekly limit: “the average duration of working hours shall in no case exceed, in each period of seven days, forty-eight hours, overtime included” (art. 4, par. 2).

Therefore, in planning flex work the employment agreement must necessarily comply with such limits.

Flex work falls within the broader category of subordinate employment agreement between the parties and consequently, as stated by FL, work services are rendered “partly within the company’s premises and partly outside with no fixed workstation”. As a result, not all working hours can be flex work for employees, who have to combine a (possibly) self-managed fraction of worktime with a fraction within the company’s premises, based on scheduled shifts. Therefore, we recommend that the written agreement regulating smart work identifies the number of hours that may be worked outside the company with reference to maximum daily hours and allocation within the week, month and year. Hence, the period of time when employees will work remotely (with no constraint of time and place), combined with the number of hours that will be worked on company premises, will be jointly comply with the aforesaid limits. Under this scenario, it may be useful to include the option of changing the agreed upon initial plan between the parties by including terms and conditions (notice, reasons, etc.) that modify the traditional hourly regime – including the right for the company to call smart workers back to the company’s premises.

Right to time off and disconnection

The FL entitles flex work employees to the “right to disconnect”. This right is designed to afford such employees the possibility to disconnect from their technological equipment – namely that free time employees have such as lunch periods, rest periods or before and after work. The organizational standards aimed at ensuring this right should be set forth in the employment agreement. As to specific contractual provisions regulating such right to disconnect, they should specify that “flex” work services are rendered, for each full day, over a timeframe that allows 11 consecutive hours of time off (for instance from 9:00 a.m. to 9:00 p.m.), as required by applicable legislation on working hours. We normally recommend to also explicitly prohibit employees from using the internet for work purposes and from using their corporate email accounts after a certain time, and also to include the obligation to refrain from turning on corporate devices before a given time.

Although “flex work” employment should be considered a positive development in working conditions for employees, it should be addressed with particular caution, since its rules tend to be rather complex. Any company intending to implement flex work procedures should definitely draft the relationship with “flex work” employees with careful consideration in employment agreements.

Compliments of AEM Carnelutti , a member of the EACCNY