Italy: New rules to protect self-employed workers and regulate ICT-based mobile work
Italy’s parliament has approved new legislation giving protection to self-employed workers and regulating ICT-based mobile work. Employer organisations have generally welcomed it, but unions criticise the legislation for its weak wording, the limited leeway left to collective bargaining, and for the lack of financial resources to back it.
On 10 May 2017 the Parliament approved Act No. 81/2017. This came after a long discussion on a bill issued by the government in January 2016. The act features novelties concerning entitlements of non-entrepreneurial self-employed workers and addresses as well employment conditions applying to ‘ICT-mobile based work’. The rationale and features of the act are presented below.
Protection for self-employed workers
The act targets self-employed workers who fall within two groups – 'professionals’ and 'those performing activities coordinated by the client’. The first group comprises workers with a VAT number who perform intellectual tasks. As a rule, registration for a VAT number is compulsory for all those who carry out autonomous work (work performed outside the direction of an employer) on a regular basis. These workers are directly responsible for their income tax and social security contributions, and fall outside the scope of social protection granted to employees. Their social security needs are covered by the funds of their professional associations, such as those for lawyers or architects, or by the National Institute of Social Security (INPS) if there is no professional association for their specific category (such as designers and translators).
The second group comprises self-employed people who have an employment contract entailing coordination by their client for ‘continuous activity’, although workers are autonomous in their work organisation. This category of self-employment is also defined in international literature as ‘dependent self-employment’ and is partly covered by labour rights due to a worker’s weaker position in relation to that of the client.
Over the last 20 years, social and political debate has increasingly focused on these groups’ working conditions and remuneration, particularly in light of cases of ‘bogus self-employment’ and of worsening income prospects for young self-employed people.
The act addresses these concerns by introducing a number of forms of protection. The actual deployment of such measures, summarised below, will be monitored by a tripartite observatory.
The act entitles self-employed workers to ask for a written contract. Such a contract cannot include conditions that allows clients to do any of the following:
- unilaterally modify contractual conditions
- terminate the working relationship without observing a notice period
- impose terms of payments exceeding 60 days from the date of invoice.
Moreover, self-employed workers gained the right to suspend work without risking the termination of the contract in cases of pregnancy, illness or accidents. However, this is only allowed insofar as that it does not affect the client’s interest.
The new provisions also give self-employed workers some social security rights, which differ depending on the worker’s category.
Dependent self-employed workers, as well as professionals insured with INPS, are entitled to a maximum of six months’ parental leave. In addition, they will no longer lose maternity allowance if they continue working during the period covered by the measure.
The act also makes permanent a temporary measure on unemployment support. This benefit, known as DIS-COLL, is a specific unemployment benefit for dependent self-employed workers. The benefit, introduced in 2015 on an experimental basis by the Jobs Act, provides income support for up to six months in case of unemployment, based on social security contributions and earnings. Furthermore, the act mandates the government to extend social security benefits, including unemployment benefits, to members of professional associations, (provided these are funded through increased social security contributions).
Labour market policies
A third set of rights focuses on access to the labour market and career development. This includes:
- the right for non-entrepreneurial professionals to participate in public tenders, possibly also by creating joint ventures
- the reshaping of rules granting income tax relief for training expenses in a way favourable to low earners
- the creation of advice centres by Public Employment Services (PES) and private employment agencies for self-employed workers, which would provide information on job and funding opportunities, possibly in cooperation with professional associations or unions.
Rules on ICT-based mobile work
Act No. 81/2017 introduces the concept of 'smart working' (lavoro agile) as a working modality bound to targets or steps rather than to pre-set working time and space, one that is intended to boost competitiveness and to promote work–life reconciliation.
Such arrangements, often defined in literature as ICT-based mobile work, have been triggered by advances in technology that allow easy access to the web and the use of portable devices (smartphones or tablets) for work. In recent years, several collective agreements or internal regulations have been implemented in large companies, albeit within an unclear legal framework.
Smart working is now legally defined as a working modality, possibly entailing the use of technological devices, in which tasks are performed partially outside a company’s premises and with flexible working time patterns, within the sole limit of the maximum duration of working time, generally 48 hours per week. The act specifies that smart working should be considered as a modality of subordinate employment relationships, therefore preventing employers from considering ‘smart workers’ as self-employed.
Smart working arrangements must be agreed upon through individual agreements that set out the following:
- rules on work performance outside the office
- methods for ensuring control and disciplinary power by the employer
- working tools used by the employee
- measures ensuring rest and the right to disconnect.
The agreement can be permanent or fixed-term and can be terminated by either party provided the notice period is observed, or there is a justifiable reason.
The act entitles smart workers to receive the same wage and to enjoy the same employment conditions as comparable ‘standard’ workers in the relevant company. It also delegates collective agreements to introduce further clauses to promote smart working.
Finally, smart workers are covered by insurance against accidents at work in their chosen place of work and, with some exceptions, during the travel to and from work.
Main concerns from stakeholders
While employer organisations generally appreciated the new rules on self-employment, requesting only minor changes, professional associations and unions have taken a more cautious stance.
Soon after the act came into force, there was a national demonstration organised by a network of professional associations in Rome. Although protesters acknowledged some merits of the law (especially the ability to access public tenders, income tax relief for training expenses, and limits on the introduction of arbitrary clauses in contracts), they complained about the absence of rules on minimum remuneration levels for professionals, which were eliminated by the former Prime Minister Mario Monti’s cabinet in 2012.
Unions also expressed their concerns, criticising a number of items:
- the weak wording of the new labour rights
- the lack of human and financial resources to ensure PES can adequately implement the new assigned tasks
- the inadequacy of social security provisions.
Unions stressed that the benefits would not give much protection to those on low-incomes, especially as they remain strongly insurance-based.
As for smart working, unions want collective bargaining to play a stronger role than individual agreements in setting rules. Unions called as well for :
- further obligations on health and safety at work
- the introduction of a ‘voluntary’ clause, expressly allowing workers to freely resign from the smart working agreement without risking dismissal.
The unions feel that this would reduce the risks of abuse by employers, including excessive workload.
On the other hand, employer organisations argued in favour of a light regulation and are mostly satisfied with the new provisions.