The new rules governing merit-based indemnity

Effective 1 April 2017, the new method for the calculation of the merit-based indemnity for sales agents established by article 11 of the Collective bargaining agreement for the industrial sector (Aec Industria) signed by the social partners on 30 July 2014. The new rules, which follow closely the method adopted by the German Commercial Code, introduce a rather complex system based on the calculation of the “difference between the initial commissions and the final ones“. Essentially, a comparison is made between the volume of commission income and any other remuneration received by the agent on the first and the last portion of the relationship. In addition, two new criteria have been introduced to define the calculation: (i) the “assessment period” (periodo di prognosi) subsequent to the termination of the relationship, that is the expected years for which the contracting company will benefit from the work of the agent and (ii) the expected “migration rate” of clients, that is the percentage of annual turnover reduction and/or loss of clients regardless of the activities of the agent. If the merit-based indemnity so calculated exceeds the amount established by art. 1751 of the Civil Code, it shall be equal to that amount. If, instead, it is lower than the statutory amount, only the portion exceeding the value of the Firr (Retirement Bonus Provision) and the provision for supplementary customer allowances (indennità suppletiva di clientela) shall be paid. As anticipated, this calculation system applies only effective from 1 April 2017: this means that for agency agreements already in place at the time of entry into force of the Aec, in order to calculate the merit-based indemnity it will be necessary to apply two different calculations, using respectively the old and the new calculation criteria.