The new Italian procedure to contrast offshoring and related dismissals

Hogan Lovells

Hogan Lovells

The 2022 Italian Budget Law (law no. 234/2021) has introduced a new three-stages procedure in case of redundancies caused by the closing of activities, with the aim to discourage the so-called offshoring, meaning the relocation of a performing business (e.g. not in crisis) in a different Country in order to achieve competitive benefits (as lower labour costs and/or resources).

The 2022 Budget Law has introduced a new procedure in case of redundancies, with the aim to discourage the so-called offshoring.

In particular, companies who:

  • employed at least 250 individuals in the previous year (including apprentices and executives); and

  • intend to make redundant at least 50 employees due to the closure of a plant, branch or local office located in Italy with the permanent cessation of the activity;

  • must follow an additional and preliminary consultation process (the “Preventive Procedure”).

The Preventive Procedure consists of three stages, according to which the employer:

  • at least 90 days before starting the “ordinary” collective dismissal procedure (pursuant to Law no. 223/1991), must notify to the works council/Trade Unions, the Labour Authorities and the Ministry of Labour (the “Parties”) its intention to close its activity, details and reasons for redundancies, the timing thereof and the related social impacts;
  • within 60 days from such communication, must present to the Parties a plan to safeguard employment levels and/or reduce the social impacts. If the plan is not submitted, or does not meet the legal requirements, the employer is subject to increased costs for the regular redundancy procedure;
  • within 30 days from its submission, must discuss the plan with the works council/Trade Unions.

The procedure can be concluded with:

  • the execution of a union agreement: the employer will implement the agreed plan, which will be monitored on a monthly basis. In case of non-compliance with the plan, the increased costs for the regular redundancy procedure apply;
  • failure to reach an agreement: the employer may initiate the “ordinary” collective dismissal procedure, skipping the first phase of consultation with the Unions and directly starting the so-called "administrative" phase lasting 30 days. Also in this case, the employer is subject to increased costs for the regular redundancy procedure.

Failure to initiate the Preventive Procedure or dismissal of the employees before the 90 days term elapsed results in the nullity of the dismissals subsequently adopted.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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