No severancy indemnity pay in case of contiguous agency contracts

In Judgment no. 1672/2017, the Milan Court of Appeal has ruled again on the severance indemnity pay set out in Article 1751, Italian Civil Code. In particular, the Court has clarified that the expiration of an agency contract which is followed, without interruption, by a second agency contract with the same principal does not give rise to the right of the agent to receive the severance indemnity set out in Article 1751, Italian Civil Code, or the indemnities set out in collective bargaining agreements. Moreover, the Court further ruled, if the new contract no longer provides for non-competition obligations, the agent shall receive no non-competition indemnity. This judgment stresses in particular the undeniable element of the non-termination of the contract in the event of stipulation of a new contract without interruption, which is why the severance indemnity pay cannot be allowed. In the same way, unless otherwise agreed by the parties, if the new contract sets out nothing on the prohibition to engage in competitive activities once the contract is terminated, the agent shall be entitled to no indemnity, even though he was entitled thereto under the previous contract.