DLP Insights

EXECUTIVES: OUTSIDE FIXED TERM CONTRACTS THRESHOLD (IL SOLE 24 ORE, JUNE 21, 2014, PAGE 19)

Categories: DLP Insights, Legislation

27 Jun 2014
Fixed term contracts entered into with Executives do not account as regards the 20% threshold, introduced by the so-called "Jobs Act". The fact that this rule does not apply to Executives implies, then, that more fixed term employment contracts can be entered into between the Employer and the Executive (subject to the maximum duration of five years), without observing any period of time between one contract and the next and without the Executive being able to request any increase of remuneration in the event of exceeding the maximum duration. Concerning penalties, it is possible to support the exclusion of Executives’ fixed term contracts by the general rule regarding conversion penalty, provided for in Article 5, paragraph 2, but such a contract may be nevertheless deemed converted into an open term contract in accordance with the general principles in judicial proceedings. The right of early termination can always be exercised ante tempus by both parties – i.e. before the natural expiration of the term applied to the contract – in the presence of a just cause. Instead, Executive has the exclusively right to terminate early in case of contracts in excess of three years and provided that at least three years have passed since the beginning of the relationship.

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