Social safety nets during the employment relationship

Ordinary redundancy fund

Last update : 19/04/2022
What are the prerequisites to apply for the ordinary redundancy fund?

The Ordinary redundancy fund can be requested to cope with a reduction or suspension of the company’s production caused by: (i) temporary events not attributable to the entrepreneur or employees; (ii) temporary market situations. The transitory nature of the company and market situation exists when it is foreseeable that the company will resume normal business activity after applying for the redundancy fund. The company or workers are not responsible for the company’s situation if it is involuntary and not due to the inexperience or negligence of the parties. The employer suspends existing staff (or some of them) from work, or reduces their working hours and reemploys them once the crisis is over.

Last update : 19/04/2022
Who are the workers eligible for the ordinary redundancy fund?

Workers under an employment contract, including apprentices under a professional traineeship contract, are eligible for the ordinary redundancy fund. Managers, home-based workers, those employed under an apprenticeship contract for professional qualification and diploma or workers under a apprenticeship contract for advanced training and research. In addition, workers must have been employed for at least 90 days at the date of application submission. For this purpose, Saturdays (for five-day working weeks) and weekly rest days (Sundays or other weekdays) are to be counted as workdays. This is because these days are included in the normal course of the employment relationship, which continues without interruption.

Last update : 19/04/2022
Which companies can apply for the ordinary redundancy fund?

Under art. 10, paragraph 1 of Legislative Decree no. 148/2015 ordinary wage supplement regulations and the related contribution obligations apply to:

  • industrial manufacturing, transport, mining, plant installation, production and distribution of energy, water and gas companies;
  • production and work cooperatives carrying out work similar to that of workers in industrial companies, except for cooperatives listed in Presidential Decree no. 602/1970;
  • companies in the forestry and tobacco industry;
  • agricultural and livestock cooperatives and their consortia involved in the processing, handling and marketing of their agricultural products for employees with an open-ended contract;
  • companies involved in the rental and distribution of films and in the development and printing of cinematographic film;
  • industrial companies for olive pressing on behalf of third parties;
  • companies producing ready-mixed concrete;
  • companies involved in electrical and telephone installations;
  • companies involved in railway construction;
  • industrial companies of public entities, unless their capital is fully owned by the public authorities;
  • industrial and craft companies in the building trade and similar;
  • industrial companies involved in quarrying or processing of stone material;
  • artisanal companies carrying out quarrying and processing of stone materials, excluding those carrying out this in workshops with structures and organisation separate from the quarrying.
Last update : 19/04/2022
Is it necessary to consult with trade unions to benefit from the ordinary redundancy fund?

If there is a suspension or reduction of production, the company must provide advance notice to the company trade union representatives or to the unitary trade union representative body, and local branches of trade union associations which are comparatively more representative at a national level: (i) the causes of suspension or reduction of working time; (ii) the extent and foreseeable duration and (iii) the number of workers concerned. If requested by one of the parties, it will be necessary to organise with the trade unions a joint examination of the situation concerning the protection of workers’ interests during the company crisis. The procedure must be completed within 25 days from the date of the notification, or 10 days for companies with less than 50 employees. Failure to carry out the trade union information and consultation procedure results in the application inadmissibility. The company must (a) specify trade union procedure information in the appropriate field of the online application and (b) attach, a copy of the notification sent to the trade unions and a copy of the minutes of any consultation, under penalty of application inadmissibility.

Extraordinary wage subsidies

Last update : 19/04/2022
What are the prerequisites to apply for the extraordinary redundancy fund?

The extraordinary redundancy fund can be requested to cope with a reduction or suspension of the company production caused by (i) company reorganisation; (ii) company crisis, with continuation of business activity and (iii) defensive solidarity contracts.

Last update : 19/04/2022
What are the contents of the company reorganisation programme?

The company reorganisation programme must include:

  • an action plan to address inefficiencies in the management or production structure;
  • the investments to be made and any training for workers;
  • a significant recovery in employment of the staff affected by the suspension or reduction in working time.
Last update : 19/04/2022
Which companies can apply for the Extraordinary Redundancy Fund?

The rules on extraordinary wage subsidies and the relevant contribution obligations apply to the following companies which, in the six months preceding the application date, employed on average more than 15 employees, including apprentices and managers:

  • industrial companies, including construction and related companies;
  • craft companies that suspend workers due to suspensions or reductions in work of the company that has the main management;
  • canteen or catering contractors, who undergo a business reduction due to difficult situations in the contracting company, which led it to use the ordinary or extraordinary redundancy fund;
  • cleaning contractors, even if they are cooperatives, who suffer a business reduction due to a reduction in the contracting company activities, which led it to use the extraordinary redundancy fund;
  • companies in the rail services auxiliary sectors, i.e. the production and maintenance of rolling stock;
  • cooperative companies for the processing of agricultural products and their consortia;
  • security companies.

The extraordinary redundancy fund and the relevant contribution obligations can be requested by the following companies which, in the six months preceding the application submission date, employed on average more than 50 employees, including trainees and managers:

  • companies engaged in commercial activities, including logistics;
  • travel and tourism agencies, including tour operators;
  • cooperatives and their consortia marketing agricultural products.

The extraordinary redundancy fund may be requested, regardless of the number of employees, by:

  • air transport and airport management companies and companies derived from them, and airport system companies;

political parties and movements and their local branches and sections (with expenditure limits).

Last update : 19/04/2022
Can the Extraordinary Redundancy Fund be paid directly by the institution to the workers?

To make the direct payment, the authorisation of the Ministry of Labour and Social Policies is required, to be requested at the same time as the wage supplement measure. The direct payment is subject to documented proof of the company’s financial difficulties. This is without prejudice to a later revocation if the relevant service verifies the absence of financial difficulties.

Bilateral solidarity funds

Last update : 19/04/2022
What are the wage subsidies for companies which do not benefit from ordinary and extraordinary redundancy funds or bilateral solidarity funds?

The Wage Supplement Fund (FIS) guarantees wage supplements to employees of companies belonging to sectors that are excluded by law. On a residual basis, it covers workers of companies operating in sectors for which no specific bilateral solidarity funds have been established. A company, (i) in the presence of a bilateral fund (including alternative) in the sector, must join if the employment threshold of five employees is exceeded (as specified below); if not, it must contribute to the Wage Supplement Fund.

Last update : 19/04/2022
Which companies can apply for the Wage Supplement Fund (FIS)?

Employers, including non-entrepreneurs, employing on average more than five employees (including trainees), belonging to sectors, types of employers and size classes that do not fall within the scope of application of the legislation on Redundancy Funds, for which no agreements have been entered into to activate a bilateral solidarity fund or an alternative bilateral model.

Last update : 19/04/2022
Who are the workers who can benefit from the Salary Supplement Fund (FIS)?

The Wage Supplement Fund applies to employees, including professional trainees, with at least 90 days of seniority in the production unit. Executives and home-based workers, blue-collar workers and workers employed by direct farmers cannot benefit from the Wage Supplement Fund.

Last update : 19/04/2022
What type of benefits do the bilateral solidarity funds provide?

In addition to ordinary benefits linked to the financing of professional retraining or income support due to activity suspension, the bilateral solidarity funds provide extraordinary benefits due to surplus staff, identified through criteria agreed at the trade union level, or through voluntary redundancy of the personnel concerned. The extraordinary benefit is financed by the employer, while the extraordinary allowance is paid by INPS, which manages the relevant Fund until retirement.

Last update : 19/04/2022
What are the alternative solidarity funds?

The alternative bilateral solidarity funds, governed by art. 27, paragraph 1, of Legislative Decree no. 148/2015, are the Alternative Bilateral Solidarity Fund for Craftsmen and the Alternative Bilateral Solidarity Fund for staff leasing workers.

The alternative funds ensure at least one of the following benefits:

  • an allowance of a duration and size equal to the ordinary allowance;
  • solidarity allowance, possibly limiting the maximum period but providing for a maximum period of not less than 26 weeks in a two-year period.
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