Italy: New law streamlines labour inspection
A National Labour Inspectorate is to be set up under Italy’s new Jobs Act which will carry out all inspections, including those currently carried out by other bodies. The Council of Ministers has also given the inspectorate some responsibilities in tackling undeclared work, such as analysing the phenomenon and risk-mapping.
Inspection services and undeclared work
The law known as the Jobs Law (law no. 183/2014) is intended to simplify the current system under which labour inspections are carried out by different bodies. Employers’ associations welcome the new National Labour Inspectorate, which they hope will reduce the number of inspections. Companies are currently visited often, sometimes for the same purpose and sometimes resulting in different assessments. However, unions have criticised the fact that no extra funds will be available for the inspectorate.
Currently, inspections are mainly carried out by the Ministry of Labour and Social Policies, the National Institute of Social Security (INPS), and the National Institute for the Insurance against Accidents at Work (INAIL). These are coordinated by the Directorate General for the Co-ordination of Inspection Activities, part of the Ministry, and are implemented by Territorial Labour Offices (DTL). The main tasks of DTL are to:
- ensure the correct application of the law and of collective agreements;
- protect employment relationships.
Inspectors of INPS and INAIL mainly ensure compliance with social security rules, and promote training. They also tackle undeclared work and try to ensure that workers are legally contracted. Historically more widespread in southern regions, undeclared work often involves migrants and younger workers – especially in the care services, construction, and agriculture sectors. There are two types of policies to counter this:
- sanctions and enforcement procedures;
- incentives to transform undeclared work into regular employment.
The Government framed the Jobs Act to cover dismissal procedures, the system of unemployment schemes, and the governance and functioning of labour market policies. The Act was approved by the Italian Parliament in December 2014. Four of its proposals have already been turned into law. These are the:
- dismissals regime (Legislative Decree 4 March 2015, No. 23, ‘JAEC’);
- unemployment schemes in case of termination (Legislative Decree 4 March 2015, No. 22, ‘JAUE’);
- labour contracts code (Legislative Decree 15 June 2015, No. 81, ‘JACode’);
- work–life balance (Legislative Decree 15 June 2015, No. 80, ‘JABalance’).
Four proposals remain, including the one on labour inspection. Parliament is entitled to deliver its non-binding opinion on them within 30 days of their submission, and then the Italian Government will finalise their adoption. These are on:
- labour market reform (Senate Draft Law no. 177/2015, ‘JALM’);
- labour inspection (Senate Draft Law no. 178/2015 ‘JALI’);
- simplification (Senate Draft Law no. 176/2015 ‘JAS’);
- unemployment scheme for temporary crisis (Senate Draft Law No. 179/2015 ‘JATC’).
Labour inspection is simplified under Article 1, paragraph 7, Letter l of the Jobs Act. This is to be provided for by: 'enhancing coordination measures or by creating a unique labour inspection authority through the integration into a single structure of the inspection services of the Ministry of Labour and Social Policies, INPS, and INAIL, providing tools and forms of cooperation with the inspection services of Local Health Authorities (ASL) and Regional Agencies for Environmental Protection (ARPA).'
Although the Council of Ministers provisionally adopted the JALI draft legislative decree in June 2015, which establishes the NLI, further acts have to be adopted to give full force to the new rules. These include the NLI Statute and the resolution of human resources, budget, and management issues.
Main features of the new system
The core function of the NLI is the overall coordination of inspection activities covering employment, social contributions, obligatory insurance, and health and safety at work. This is done through the following:
- planning inspection activities;
- defining inspection procedures and tools and developing guidelines and operational directives for all the personnel involved;
- proposing qualitative and quantitative targets, and monitoring their achievement;
- planning training activities for inspectors;
- seeking coordination with other relevant bodies such as the inspection services of ASL or ARPA.
The NLI is also in charge of analysing undeclared work and of developing the risk-mapping to be used when planning inspections that focus on this kind of employment. It is also in charge of raising awareness of undeclared work among relevant stakeholders and companies.
The NLI will report to the Ministry of Labour and Social Policies and will be run by:
- the Director General, who will be the legal representative and assume overall management responsibility;
- the board of directors;
- the board of auditors.
It will also be supported by an ad hoc committee (Central Commission for Coordination of Monitoring) of representatives from INAIL, INPS, the Carabinieri (military police), the Finance Police , trade unions, and employers’ associations. The committee will formulate the strategic objectives of the NLI.
The NLI will be based in Rome and have a maximum of 80 local offices, while the overall staff will not exceed 6,357 posts. INAIL, INPS, and the Income Revenue Authority will provide access to all relevant data and information, including its own IT databases.
Reaction from social partners
Trade unions have criticised the fact that the role of the new office is merely to coordinate activities. They say it is unlikely to be effective since it has no extra cash and a smaller staff. Some trade unions have added that the inspectorate will have difficulty fulfilling its additional duties, especially those related to the analysis of informal and irregular employment.
Although employers welcome the more coordinated approach, they criticise the JALI draft legislative decree for proposing that administrative disputes can be heard by ordinary tribunals but not territorial labour offices. They say this will make the process longer and put an excessive financial and administrative burden on employers. Employers also feel that sanctions for non-compliance place too heavy a burden on them.
For a complete overview of the Jobs Act reform, please see our articles addressing: the new dismissal regime, the reform of unemployment benefits and of temporary unemployment benefits, the reshaping of employment relationships, the reorganisation of active labour market policies, the new rules on job tasks, measures targeting economically dependent self-employed work.