Highlights T&P 2015 ENG

8/16/2019 Highlights T&P 2015 ENG

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TRIFIRÒ & PARTNERS AVVOCATI

HIGHLIGHTS 2015


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Highlights T&P 2015

Salvatore Trifirò and the Editorial Committee: Francesco Autelitano, Stefano Beretta,

Antonio Cazzella, Teresa Cofano, Luca D’Arco, Diego Meucci, Jacopo Moretti, Damiana

Lesce, Luca Peron, Claudio Ponari, Vittorio Provera, Tommaso Targa, Marina Tona,

Stefano Trifirò and Giovanna Vaglio Bianco

H I G H L I G H T S T & P


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LABOUR LAWCIVIL ANDCOMMERCIAL LAWINSURANCE LAW


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EDITORIAL

2015 was the year of the Jobs Act. Asoccurred in the 1970s with the passing of

the Workers’ Statute, Italy's new labour lawcomes as part of a groundbreaking reform.

Bui l t on the foundat ions of the

Constitutional Charter of 1947, until today

it rested mainly on two fundamental pieces

of legislation: the 1966 law on just cause of

dismissal and the 1970 Workers’ Statute.

On this basis jurisprudence fashioned“living law”: an independent legal category

representing the ius receptum or received

wisdom, with the vital contribution of the

legal profession, and shaped into

applicable rules by the judiciary, of which

this Studio, as early as the 1960s, was one

of the key architects.

Once again in the age of the Jobs Act, the Studio is at the

forefront of developments. With publications which, following theintroduction of the enacting legislation, examine the new law

from a practical standpoint, giving clear answers on what to do

and how to behave, bringing the living law up to date. With

conferences on the matter aimed at clients and legal

professionals. And with our everyday work, providing consulting

and legal assistance in the early applications of the new law.

We therefore closed 2015 with the publication, for Corriere

Economia of Il JOBS ACT in 100 domande (The JOBS ACT in

100 questions). A complete guide in question and answer form. An easily readable explanation of the new rights and

responsibilities of employees and employers, with a glance at

the de jure condendo for the future, where business (as we can

see on the Internet) is increasingly becoming virtual. Where

labour, freed from the constraints of subordination - with the

unravelling of a inextricable tangle of employment laws, decrees

and regulations - can finally see the way forward to a single

category: that of self-employment, even if organized within a

company, with profit sharing, meritocracy and reward, which

celebrates the dignity of work.

Salvatore Trifirò


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LABOUR LAWWHAT IS NEW IN THE LEGISLATION by Stefano Beretta and Luca D’Arco

2015 saw the enactment of the provisions of Law no. 183 of 10 December 2014, the so-called

“Jobs Act” (published in Official Journal no. 290 of 15 December 2014 which came into force on 16

December 2014) regarding:

a) reorganization of the law on welfare benefits (during and after the period of employment);

b) reorganization of the law on unemployment and job seeker services;c) simplification and rationalization of the rules and obligations of citizens and businesses;

d) a unified simplified text on regulations, types of contracts and labour relationships;

e) revision and updating of measures to protect maternity and work-life balance.

Legislative decrees no. 22 and no. 23 of 4 March 2015, both published in Official Journal no. 54 of

6 March 2015, introduces new rules respectively on welfare benefits in the event of involuntary

dismissal and employment under open-ended contracts, with effect from 7 March 2015, covering

termination of the employment relationship and the sanctions regime.

Specifically, decree no. 22/2015 establishes the so-called NASPI benefit for employees

involuntarily made unemployed after 5 May 2015 and DISCOLL for non-employed workers who

lose their position after the same date.


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The new law - which is discussed in our newsletter of March 2015 - replaces the former ASPI and

Mini ASPI with an allowance linked to contributions (over the last 4 years of the labour relationship)

which fall over time, and which from 2017 will also replace mobility allowance.

Decree no. 23/2015 – discussed in our newsletter of February 2015 – instead, introduces the"rising protection" open-ended employment contract.

Under this legislation, for workers hired after 7 March 2015, the consequences set forth in article

18 of the Workers’ Statute (as amended by the Fornero Act) in cases of unlawful dismissal will no

longer apply. Instead, with certain exceptions, they will receive benefits that rise in proportion to

the number of years worked in the company: 2 for every year of service, from a minimum of 4 to a

maximum of 24 month's salary.

Legislative decrees nos. 80 and 81 of 24 June 2015, both published in Ordinary Supplement no.

34 of Official Journal no. 144 of 24 June 2015, respectively introduces new measures to protect

maternity and work-life balance and a more complete regulation of labour contracts.

Specifically, enacting decree no. 81/2015 - discussed in our newsletters of June and August 2015 -

represents a sort of consolidation act for the various types of labour contract (non-employed

workers, fixed-term contracts, part-time work, supply contracts, apprenticeships and intermittent

work). The new law also revokes with effect from 25 June 2015 the pre-existing law on project

work and self-employed work (so called VAT workers).

An important amendment contained in decree 81/2015 is to article 2103 of the Civil Code -

discussed in our newsletter of July 2015 - which determined the limits of the principle of

equivalence of jobs and established the employer's faculty to alter them in certain circumstances

to impose heavier duties than those previously performed.

Finally, 4 legislative decrees, all of 24 September 2015 and published in Ordinary Supplement no.

53 of Official Journal no. 221 of 23 September 2015 - discussed in our newsletter of September

2015 - concluded (at least the first phase) of enactment of the delegated law.

Specifically decree no. 148/2015 finally reorganizes the (fragmented) legislation on welfare

benefits during the employment relationship, establishing new rules for ordinary and extraordinary

redundancy benefit, as well as for solidarity contracts.

Decree no. 149/2015 simplified and reorganized inspectorate activities, establishing among other

things, a new body (the national labour inspectorate) unifying the labour inspectorates, INPS and

INAIL. Meanwhile decree no. 150/2015 reorganizes the law on unemployment and job seekerservices with the creation of a National Unemployment Policy Agency (ANPAL), responsible for

managing unemployment services and policies and benefits for involuntary unemployment.

Decree no. 151/2015 instead introduces a series of simplifications regarding the disabled -

discussed in our newsletter of November 2015 – company- or territory-wide collective agreements;

employment paperwork and communications with official bodies and authorities; job placement;

occupational health and safety; accidents at work (removing the employer's reporting obligation);

sanctions on underground employment (including a new definition), as well as a revision to the law

on equal opportunities. The aforementioned decree no. 151/2015 also foresees the possibility for

workers to cede holiday time, although to be implemented this will require collective bargaining

regulation.

Decree no. 151/2015 also makes significant changes to article 4 of the Workers’ Statute,

establishing new rules on distance control - discussed in our newsletter of September 2015 - aswell as newly considering voluntary resignation and termination by common consent. This last rule,

which eliminates the procedure and costs introduced by the Fornero Reform in 2012, has however

still not come into force because to date the enacting legislation has not been passed.


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2015 closed with the so-called Stability Act (law no. 208/2015) published in Ordinary Supplement

no. 70 of Official Journal no. 302 of 30 December 2015 which, in line with the legislator's wish to

encourage open-ended contracts, renewed (at a lower level) tax relief on employers' contributions.

In particular, the law retains the pre-existing subjective conditions for newly hired workers (not

employed by that employer in the previous six months), as well as contracts giving benefits (either

to new employees or through the conversion of fixed-term contracts). However, the total

contribution exemption (maximum annual contribution of 8,050 euros, for a period of 3 years), isreplaced by a 40% reduction in the employer's overall pension contributions, excluding INAIL

premiums and contributions, up to a maximum annual 3,250 euros, for a maximum 24 months.


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LABOUR JURISPRUDENCE 2015 By Tommaso Targa, Beatrice Ghiani and Veronica Rigoni

INDIVIDUAL DISMISSALS

LAWFUL DISMISSAL OF EMPLOYEE CAUGHT BY THE COMPANY USING FACEBOOK

DURING OFFICE HOURS

The way the employee was discovered was also lawful. The company created a fictitious

Facebook profile of a woman who asked to "be a friend". This measure was deemed necessary to

prevent damage to corporate assets with a view to the normal functioning and security of the plant,

thus excluding a violation of article 4 of the Workers’ Statute (Cass. 27.5.15 no. 10955).

DISMISSAL OF EMPLOYEE WHO, ON SICK LEAVE, WAS FOUND TO HAVE PAINTED THE

WALLS OF A HOUSE USING OUTDOOR SCAFFOLDINGThe worker complained of knee pain following an accident at work. This conduct violated the

contractual obligations of probity and good faith which require workers to look after themselves

and not to delay recovery (Cass. 7.7.2015, no. 13955).

TRADE UNION LAW

LABOUR LAW

EMPLOYMENT TRIBUNAL LAW

2015 LABOUR

JURISPRUDENCE


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A PLEA BARGAIN JUDGEMENT ALSO WARRANTS DISMISSAL WITHOUT PRIOR NOTICE

If the CCNL (National Collective Bargaining Agreement - NCBA) foresees dismissal in the event of

“criminal conviction of the employee”, this also stands in the presence of a “plea bargain”

judgement; the parties are deemed to be in common agreement that the plea bargain is equivalent

to an admission of responsibility (Cass. 9.12.2015, no. 24828. Similar rulings: Cass. 30.01.2013

no. 2168; Cass. 18.02.2013 no. 3912).

DISMISSAL IS UNLAWFUL IF THE WORKER IS DENIED A HEARING BECAUSE THEY ASK TO

BE HEARD AFTER THE 5 DAY TIME-PERIOD HAS EXPIRED

Unless the company has already exercised its disciplinary power, the employee is still entitled to

ask to defend him/herself verbally, even if 5 days have passed since notification of the allegation.

Even if the request for a hearing is late, therefore, it cannot be denied, on pain of unlawful

dismissal (Cass. 12.11.2015 no. 23140).

MANAGERS MUST ALSO CHALLENGE DISMISSAL WITHIN 60 DAYS, ON PAIN OFFORFEITURE

The twin time-limit foreseen by the Collegato Lavoro (60 days for an out of court challenge and asubsequent 180 days for the presentation of an appeal) applies in all cases of unlawful dismissal,

regardless of the employee's position or the nature of the appeal (null, unlawful, ineffective,

unjustified) (Cass. 5.11.2015 no. 22627).

DOWNGRADING PACT TO PREVENT TRANSFER OF THE EMPLOYEE 150 KM FROM HOME

LAWFUL

An agreed downgrade is lawful if this is the only way to prevent a transfer. According to the

Supreme Court, the principles of legitimate downgrade are applicable in this case to prevent

dismissal (Cass. 6.10.15 no. 19930).

FORNERO: THE JUSTICE AT THE INTERIM STAGE MAY BE THE SAME AS THE JUSTICE ATTHE APPEAL STAGE

Confirming the guidance already given by the United Sections (Cass., U.S., 18.9.14, no. 19674),

the Court of Cassation ruled that it is admissible for the magistrate at the appeal stage to be the

same as already ruled at the interim stage: an appeal is a continuation of the normal and non-

urgent judgement of the court of first instance, i.e., the same level of judgement (Cass. 17.2.15 no.

3136). This view was subsequently also confirmed by the Constitutional Court (Cost. Court 13.5.15

no. 78).

DOWNGRADING

AN EMPLOYEE REQUESTS DAMAGES FOR HARASSMENT AND OBTAINS THE CONVICTIONOF THE EMPLOYER WHO IS REQUIRED TO PAY PERSONAL INJURY DAMAGES AND

PROFESSIONAL DAMAGES FOR DOWNGRADING

According to the Court of Cassation, the request for damages for alleged harassment includes the

minor and less serious damages for professional downgrading. There is no breach of the non ultra

petita rule, since defining the employer's action as downgrading does not constitute a new request,

but simply a reclassification of the legal fact (Cass. 5.11.2015 no. 22635).


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COLLECTIVE DISMISSALS AND WELFARE BENEFITS

WHEN GIVING NOTICE OF THE INITIATION OF A COLLECTIVE DISMISSAL PROCEDURE, THE

FIRM IS ONLY REQUIRED TO INDICATE THE OVERALL NUMBER OF REDUNDANCIES

In considering the content of the preliminary notice pursuant to article 4, para. 3, Law 223/91, theCourt of Cassation, confirming an earlier ruling (see Cass. 11.3.11, no. 5884), which was

nevertheless contradicted more recently (see Cass. 22.6.12, no. 10424) ruled that, where a firmintends to downsize the entire workforce to reduce labour costs, the owner may simply indicate thenumber of redundancies by the functional areas specified in the contractual classification, withoutdetailing the precise overstaffing in the individual offices or departments (Cass. 10.11.15 no. 22914).

A DIFFERENCE BETWEEN THE COMPANY'S SITUATION DESCRIBED IN THE PRELIMINARYNOTICE AND THE FINAL SITUATION AT THE OUTCOME OF THE PROCEDURE DOES NOT

CONSTITUTE A VIOLATION OF THE LAW

In the preliminary notice the company cited the closure of the facility as the reason for the

redundancies. During the negotiations with the trade unions the company decided not to close the

site and changed the motive to company reorganization, laying off only a portion of the workforce.The Supreme Court ruled that the company did not violate the law, in that there was no intent to

circumvent the trade unions' powers. (Cass. 20.10.15 no. 21231).

AN EMPLOYER MAY NOT LIMIT THE DECISION TO LAY OFF WORKERS ONLY TO THOSE

EMPLOYEES IN A DEPARTMENT WHERE OVERSTAFFING HAS BEEN IDENTIFIED

The Court of Cassation has ruled several times on the ability to limit lay offs to the department or

sector undergoing restructuring, reaching different conclusions in different cases. Some rulings

found that the company may not take into account only its objective needs, but must also consider

the suitability of the workers made redundant, for their experience and the type of worked

performed in other departments, to occupy the positions of colleagues working in survivingdepartments (Cass. 16.10.15 no. 21015; Cass. 7.7.15 no. 13953; Cass. 12.1.15 no. 205). In

another case, the Court of Cassation ruled instead that, where the restructuring programme

concerns only one production unit, the company's needs pursuant to article 5, para. 1, Law 223/91,

may prevail as the exclusive criterion in deciding which workers to lay off, providing the company

indicates in the preliminary notice of dismissal the reasons why layoffs are limited to that unit, and

the reasons why it believes it cannot avoid the lay offs by transferring the workers to a nearby

facility (Cass. 9.3.15 no. 4678).

FAILURE TO ANNOUNCE THE PROCESS CANNOT BE REMEDIED BY AGREEMENT WITH

THE TRADE UNIONSIn one case where the company had not even begun the collective dismissal process, the

Supreme Court ruled that it was impossible to remedy the situation with a trade union agreement

by which workers would be laid off purely on the basis of the number of contributions, stating that

such an omission compromises the individual employee's fundamental interest in a transparent

redundancy process (Cass. 26.6.15 no. 13277). On the other hand, with specific reference to

technicalities in the process notice, the Court of Cassation - in line with a recent provision of the

legislator in article 1, para. 45, Law 92/12 - ruled that where a trade union agreement is reached at

the end of discussions pursuant to article 4, Law 223/91, this shall be deemed fair and sufficient.

(Cass. 14.4.15, no. 7490).


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FAILURE TO SEND THE COMMUNICATION PURSUANT TO ARTICLE 4, PARA. 9, LAW 223/91

TO THE REGIONAL COMMISSION DOES NOT RENDER THE LAYOFFS UNLAWFUL IN FIRMS

OUTSIDE CIGS (EXTRAORDINARY REDUNDANCY FUND)

In line with the general principle that the means must be congruent with the goals, the Court of

Cassation ruled that dismissal is lawful if, as part of a properly conducted process, the sole

omission is the communication to the Regional Commission pursuant to article 4, paragraph 9,

Law 223/91 - which, on the basis of article 6 of the same, is responsible for approving the lists ofthe unemployed - and the company initiating the collective dismissal is outside the sphere of

application of the Extraordinary Redundancy Fund whose employees are therefore not entitled to

mobility allowance.

TRADE UNION LAW

IN THE EVENT OF A STRIKE, THE COMPANY MAY ASSIGN WORKERS TO INFERIOR JOBSPROVIDING THEY ARE MARGINAL AND ACCESSORY TO THE JOBS NORMALLY

PERFORMED

When a strike is declared, the employer may try to limit the damage by using remaining personnel

to do inferior jobs, providing they are functionally accessory and complementary to those normally

performed. Should this limit be ignored, thus violating article 2103 of the Civil Code, the company

shall be deemed guilty of anti-trade union conduct, even if the inferior duties are compatible with

those previously performed. In application of this principle, the Supreme Court ruled that a

supermarket using qualified supervisors as routine sales or check-out staff represented anti-trade

union conduct (Cass. 10.7.15 no. 14444).

THE LIMIT ON PAID HOURS FOR HOLDING TRADE UNION MEETINGS APPLIES TO ALL THEWORKERS IN THE PRODUCTION FACILITY AND SHALL BE DISTRIBUTED AMONG THE

TRADE UNION ORGANIZATIONS ACCORDING TO PRECEDENCE OF CONVOCATION Article 20, para. 1, Law 300/70, on the right of workers to hold meetings during office hours, shall

be taken to mean that the ten-hour limit, safeguarding the best conditions established by the

collective agreement, does not apply to the single employee, but to the entire workforce of the

production facility. The total hours are distributed across all the various trade union organizations

and representatives, in application of the criterion of prevention, to avoid interpreting the inter-

confederal agreement of 20 December 1993 (which established seven hours of paid meetings p.a.

to the RSU (workplace representation) and a further three hours to the unions who sign the NCBA

applied to the production facility) as attributing a full ten hours to each individual trade union (Cass,

10.2.15, no. 2548).

FOR EMPLOYEE REPRESENTATION PURSUANT TO ARTICLE 28 OF THE WORKERSSTATUTE, IT IS SUFFICIENT THAT THE UNION PERFORMS EFFECTIVE TRADE UNION ACTIVITY IN LARGE PART OF THE COUNTRY AND NOT THE WHOLE COUNTRY

In line with the previous ruling of the United Sections (Cass. U.S. 21 December 2005, no. 2359),

the Court of Cassation reaffirmed that national trade union associations are recognized as

performing legitimate representation providing the union is active across the country. However, for

this to be recognized, it is sufficient - and necessary - that the trade union carries out effective

action not across the whole of the country, but across a large part of it; it is not necessary for the

union to be member of a confederation, or be more widely representative (Cass. 9.2.15, no. 2375;

Cass. 5.11.15, no. 22617).


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FOR THE PURPOSES OF THE REPRESENTATIVENESS OF THE SIGNATORIES, A

CONTINGENT COLLECTIVE AGREEMENT DOES NOT HAVE THE SAME WEIGHT AS A

REGULATORY AGREEMENT

Signing an "administrative" agreement in relation to a contingent issue (such as mobility or

redundancy procedures), carries less weight than the stipulation of an agreement regulating the

various instruments that govern the employment relationships in a company. On this basis, the

Court of Cassation ruled that the communication pursuant to article 47, Law 428/90 shall be sent

to RSUs, RSAs and trades unions, provided they have stipulated (or participated in the

negotiations for) the regulatory collective agreements applied in the production facility (Cass. 21

October 2015, no. 21430).

THE RSU DECIDING BY MAJORITY HAS THE RIGHT TO CALL A PAID TRADE UNION

MEETING, NOT ITS INDIVIDUAL MEMBERS

On the basis of certain new elements introduced by the inter-confederal agreement of 14 January

2014, the Court of Mantua ruled that the right to call a trade union meeting belongs to the RSU as

a whole which decides by a majority of its members. As a result an employer who denies an

individual RSU member the right to call a paid trade union meeting is not guilty of anti-trade union

conduct. Responding to previous rulings in an opposing direction (see Court of Turin, 2 January

2015), the Court of Mantua claimed that its interpretation does not entail injury to trade union

freedom or democratic principles: while it is the case that application of the majority rule overrides

the power of the minority, it is equally true that the opposing interpretation might entail

prevarication of the minority over the majority (Court of Mantua, 21 October 2015).


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JURISPRUDENCE AND

DEVELOPMENTS INCOMMERCIAL LAWBy Vittorio Provera and Giovanna Vaglio Bianco

Property purchases: the preliminary role of the private purchase agreement

If a private purchase agreement is signed prior to the signing of the actual purchase contract, the

trial judge must ascertain whether this first agreement in itself constitutes a valid preliminary

contract carrying the effects of article 1351 and 2932 of the Civil Code, or only the obligations (but

excluding specific execution in the event of non-fulfilment). He/she will therefore judge that the

private agreement - in which the parties agree to sign a subsequent preliminary contract - has

effect, only if there emerges the interest of the parties in the progressive formation of a contract,

based on different contractual content and if the more restricted area of regulation of the interests

covered in the initial agreement can be identified. The violation of such an agreement, being

contrary to good faith, may give rise to contractual liabilities for failure to conclude the contract,

due to a breach of obligations assumed at the pre-contractual stage.(Cassation, 6 March 2015, no. 4628)


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A resolution deemed invalid must be challenged

If a resolution by the shareholders’ meetings or board of directors is invalid (and not one of the few

cases of nullity contemplated in article 2379 of the Civil Code) and goes unchallenged, it remains

enforceable and binding on the company, on each of the shareholders and before third parties.

In general, therefore, any resolution that is contrary to the law or the articles of association, must

be challenged within 90 days from the date of the resolution (or its recording in the Companies

Register, if so publicized). If not the resolution remains fully effective and its requirements binding.(Cassation, 2 November 2015, no. 22349)

Liability action – effective date of limitation period

Regarding the effective date of the limitation period for bringing a liability action against directors or

auditors pursuant to article 2394 Civil Code, a lawsuit may be brought by the company creditors

(or by the receiver on their behalf), as soon as the insufficiency of the company capital to meet its

obligations becomes evident from any fact that might emerge, (even without direct examination of

the company accounts), and does not necessarily need to emerge from the approved financial

statements. If the said capital insufficiency is prior to the initiation of the lawsuit, it rests with the

director or auditor contesting the limitation period to demonstrate that this was manifest and

evident before the declaration of bankruptcy.(Cassation, 14 December 2015, no. 25178)

Competence of the Specialised Business Courts

The Specialized Courts do not have competence over complaints of so-called "pure" unfair

competition (where the breach of copyright does not, either wholly or in part, entail a breach of fair

competition, which instead requires a specific judgement on the monopolies involved), or in

damage claims relating to alleged abuse of the economic dependence of one firm on another,

pursuant to article 9 of Law no. 192 of 1998. This last case is purely contractual in nature and

therefore stands outside the notion of abuse of dominance, under the terms of article 3 of Law no.

287 of 1990. It does not concern the protection of competition and markets, and therefore lies

outside the remit of the Specialized Courts.

(Cassation, 4 November 2015, no. 22584)

Validity of shareholder agreements

The Court of Rome ruled that a shareholder agreement with which the shareholders promise not

bring a liability action against a third party, outgoing shareholder and former sole administrator of

the company is valid.

This ruling partly contradicts those of the Supreme Court (no. 10215/2010 and no. 7030/1994),which state that: “a pact with which the shareholders of a limited company promise not to takeaction against a third party, outgoing shareholder and former sole administrator, is null and void ”,because the agreement would entail a conflict of interest between the company and theshareholders.The Court ruled that the principle of law embodied in the Cassation ruling only applies to

shareholder agreements which rule out the possibility of future action regarding conduct

subsequent to the signing of the shareholder agreement.(Court of Rome, 29 September 2015, no.19193)


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Liquidation of damages following a liability action pursuant to article 146 of the Bankruptcy Law. In

a liability action brought by the receiver pursuant to article 146, paragraph 2, of the Bankruptcy

Law, the failure to keep proper accounts, even when attributable to the defendant, does not mean

that damages are determined and paid on the basis of the difference between the actual losses

and the assets liquidated at bankruptcy. This criterion can only be used as a parameter in an

equitable liquidation under certain conditions. In addition, such a criterion, based on the concrete

circumstances of the case, must be logically plausible and, in any case, the plaintiff must produce

evidence of non-compliance by the director which at least in theory caused the alleged damage,giving the reasons why the director was unable to determine the damage specifically caused.(Cassation, U.S., 6 May 2015, no. 9100)

Improper commercial practice and consumer law

If a company sends its clients an SMS informing them of the forthcoming activation of a service,

giving a deadline by which, unless the consumer expressly communicates their refusal in an SMS

containing specific information, the service will be activated at their expense, such conduct shall

be considered aggressive commercial practice and in particular unsolicited supply, pursuant to

article 26, letter f) of the Consumer Law.

(Competition Authority, 3 March 2015, no. 25330)

Obligations assumed by the PattiChiari Banking Consortium

The acquisition by an investor of financial instruments listed by a PattiChiari bank as guaranteed

securities (low risk and low yield) represents an intent by the said investor to invest their funds

safely. The PattiChiari statements on the reliability of the said securities are such as to place an

obligation on the Consortium, in the form of a promise to investors (pursuant to article 1989 of the

Civil Code) who choose to invest in the securities named on the list, and expressly referred to in

each investment order. In other words, such statements by the Consortium constitute an ongoing

responsibility during the period of investment, in terms of information, but also in terms of specific

measures to keep the list up-to-date and inform investors of any increase in risk.(Court of Padua, 23 April 2015)

Price sensitive information

The financial market and the stock exchange are highly sensitive and susceptible to the

continuous flow of information which can provoke huge variations in stock prices and facilitate very

large speculative transactions. Against this background comes an interesting decision by the Court

of Appeal of Milan on precisely when the issuer is obliged to publish inside or price sensitive

information. After outlining the notion of inside information (any information which may facilitate a

considered financial investment decision) the Court ruled that the issuer has an obligation to

immediately disclose such information, without waiting for a Board of Directors resolution, statingthe sanctions for late disclosure (pursuant to article 114 TUF).

(Court of Appeal of Milan, 11 December 2014, decree no. 4896)

NEWS

New law on rent to buy contracts

Legislative Decree no. 133, article 23 of 12.09.2014, , converted into Law no. 164 of 11.11.2014

introduces new rules on “rent to buy” contracts. The law has become widely used in practice to

allow buyers of real estate to postpone the final effects of the purchase, allowing: (i) the potential

buyer to occupy the property immediately and destine the rent to payment of all or part of thepurchase price; and (ii) the potential vendor to earn income from the property while they find a

buyer.


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The new contract is based on the following fundamental elements: (i) prior to purchase, the tenant

has full use of the property with all the ensuing consequences; (ii) the tenant has the exclusive

entitlement to purchase the property within a specific time-limit (though without an obligation to

buy); (iii) an agreement which states how much of the rent is to count as partial payment for any

future transfer of ownership; (iv) a clause stating that - in the event of a failure to exercise of the

aforesaid right to purchase - a part of the rent counting to the future purchase price shall be

returned to the tenant (therefore with the grantor entitled to withhold the remaining quota destined

to payment even in the absence of the transfer of ownership). A specific conversion deed is necessary to complete the property sale and the transfer of

ownership.

The tenant is also aware that if he/she does not exercise the right to purchase the property, not

only will he/she lose the rent foreseen for mere occupation, but also a portion of the rent paid as

purchase price, which will remain to the grantor.

In conclusion the new law introduces a facsimile contact, unlike any other contract (in particular

unlike any other rental contract), intended to stimulate the real estate sector in a market where

access to credit remains difficult.

New Bank of Italy rules on remuneration and incentives policy and practice

by Francesco Autelitano and Jacopo Moretti

With Circular no. 285 of 17 December 2013 - Update no. 7 of 18 November 2014 the Bank of Italy,

enacting the European CRD IV directive, introduces new Supervisory rules on remuneration and

incentives policy and practice which amends and replaces those of the 30 March 2011.

The Circular requires Italian banks, parent companies of banking groups, brokerages, brokerage

groups and, where compatible, Italian branches of non-EU banks, to apply the new rules in allcontracts stipulated from 1 July 2015, and to revise all ongoing contracts by 31 December 2015.

The Circular sets forth the following general principles:

1. All forms of performance-related incentives must be coherent with the risk appetite framework

(RAF) and with governance and risk management policy. They must take into account the

capital and the liquidity required to cover the company’s undertakings and be structured so as

not to produce incentives in conflict with its long-term interests;

2. The remuneration and incentive systems, especially with regard to the bank's internal and

external networks, must not be based on commercial targets alone, but must adhere to the

principles of fairness in customer relationships, containment of legal and reputational risk,

protection and loyalty of customers, respect for the corporate governance code where

applicable, and respect for the supervisory rules on banking transparency and fair relations

between intermediaries and customers, as well as the anti-money laundering regulations.

The Circular goes on to establish the following rules for the variable salary component, which

apply to all personnel:

1. Variable remuneration is linked to performance indicators which are measured net of risk and

coherent with the risk management measures; performance must be assessed at least once a

year taking into account the capital and liquidity resources required to cover the firm’s

undertakings;


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2. Total variable remuneration (bonus pool) must be based on effective and lasting results, taking

into account qualitative targets and must be sustainable based on the banks' financial

situation; capital reinforcement requirements may lead to a reduction of the bonus pool and/or

the application of ex-post corrective mechanisms;

3. The variable component must take into account the risks and results of the bank or the group

overall, the individual business units and, where possible, the individual banks; the risk

measurement criteria must be coherent with the decision-making level of the individual bank;

4. The variable component is subject to specific ex-post corrective agreements (malus and claw

back) designed to reflect performance net of risks and assets, and take into account the

behaviour of individuals;

5. These corrective mechanisms may lead to a reduction or zeroing of variable remuneration,

especially in the event of results significantly below target;

6. At minimum the following cases are subject to claw back: a) behaviour leading to significant

losses for the bank; b) breach of the obligations under the terms of article 26 (loss of requisites

of professionalism, integrity and independence) or, if the subject is the interested party, of

article 53, para 4 et seq., of the Consolidated Law on Banking (assumption of bank risk by

subjects exercising an influence on its management) or the remuneration and incentives

obligations; c) fraudulent practice or serious misconduct at the expense of the bank;

7. Malus mechanisms are applied to take into account the performance net of risk and the trend

in financial position and liquidity;

8. Variable remuneration may not be guaranteed; in exceptional circumstances it may be

permitted for one year for new hirings;

9. Retention bonuses are equally subject to the rules on variable remuneration.

The Circular also sets forth more detailed rules, in addition to the above, for ‘Identified Staff’ - in

broad terms personnel whose professional activities have, or may have, a significant impact on the

bank's risk profile. These rules - whose actual application generally depends on the criterion of

proportionality and the size of the bank - foresee the following:

1. The ratio of the variable to the fixed component of the individual's remuneration must normally

be 1:1;

2. Payment of the variable salary component must be divided into a portion (normally 50%), of: i.

shares, or equity-linked securities or, for non-listed banks, instruments whose value reflects the

bank's business value; and ii. where possible, a) additional class 1 capital instruments; b) class

2 capital instruments; c) other convertible instruments;

3. The variable component is subject, in part (normally at least 40%), to deferred payments for aperiod usually not less than 3-5 years, so as to take into account the performance over time of

the risks assumed by the bank (so-called malus mechanisms);

4. ‘Golden parachutes’, i.e. compensation negotiated with a view to, or on the occasion of, early

termination of the employment relationship (in whatever form awarded, including compensation

for non-competition clauses), are: a) linked to the performance achieved and risks assumed by

the person and the bank; b) negotiated in line with criteria established by the shareholders,

bearing in mind among other things the duration of the relationship; c) subject to the rules on

variable remuneration, including claw back and malus the mechanisms;

5. Golden parachutes also include: i) payouts based on a non-competition pact; ii) loss of notice

compensation in excess of the amounts required by law.


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The Circular also contains specific rules - which for reasons of brevity we will only summarily

outline here - on the roles and responsibilities of the shareholders' meeting and company boards in

implementing the remuneration and incentives policies; the remuneration of non-executive

directors, members of the controlling boards and members of the corporate control functions;

compensation of financial agents, insurance agents and financial advisors.

We should mention, finally, that the Bank of Italy rules must be observed on pain of nullity of anyindividual pacts that contravene them. Legislative Decree no. 72 of 12 May 2015 amended article

53 of Legislative Decree no. 385 of 1 September 1993 (Consolidated Law on Banking), adding a

new paragraph 4-sexies, which states that “any pact or clause that does not comply with the rules

on remuneration and incentives under paragraph 1, letter d) (i.e. issued by the Bank of Italy), or

contained in directly applicable articles of the European Union is null. Nullity of the clause does not

entail nullity of the pact. The provisions contained in the null clauses shall be replaced by the law,

where possible, with the parameters indicated in the aforesaid rules closest to the originally agreed

amounts”.


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INSURANCE LAWby Bonaventura Minutolo and Teresa Cofano

JURISPRUDENCE

Agencies - obligation of fairness and good faith

In the agency relationship the principal is obliged, pursuant to article 1749 of the Civil Code, to

treat the agent with fairness and good faith; violation of this contractual obligation may provide

grounds, depending on the severity of the circumstances, for just cause in winding up the agency

relationship, in application of the related article 2119 of the Civil Code, with the result that the

agent is entitled to indemnity for termination of relationship as set forth in article 1751 of the Civil

Code. While there may be concrete evidence of violation of the obligation, the principal

nevertheless has no obligation to protect the interests of the agent with rules to preserve thecontracts procured to guarantee the interests (and reputation) of the firm which helped procure

them, there being no obligation to protect an employee's professionalism as in an employment

relationship.(Civil Cassation, Labour Section, 29/09/2015, no. 19300)

Liability for agent crime under article 2049 of the Civil Code

In deciding the liability of an insurance company, under article 2426 of the Civil Code, for unlawful

conduct by one of its agents who sells a fictitious insurance product and appropriates the amount

paid, the judge, having ascertained the agent's responsibility, must verify the existence of a link of

'necessary occasion' between the agent's activities and the commission of the offence, in that this

was facilitated or made possible by the duties entrusted to the agent; it is not necessary for the

injured party to prove criminal intent or malice on the part of the insurance company, or that it has

verified the real existence or origin of the product sold.(Civil Cassation, Section III, 24/09/2015, no. 18860)

Agencies - company transfer

INSURANCE

PROPERTY RENTAL LIABILITY

2015 INSURANCE LAW


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Liability for agent crime under article 2049 of the Civil Code

In deciding the liability of an insurance company, under article 2426 of the Civil Code, for unlawful

conduct by one of its agents who sells a fictitious insurance product and appropriates the amount

paid, the judge, having ascertained the agent's responsibility, must verify the existence of a link of

'necessary occasion' between the agent's activities and the commission of the offence, in that this

was facilitated or made possible by the duties entrusted to the agent; it is not necessary for the

injured party to prove criminal intent or malice on the part of the insurance company, or that it has

verified the real existence or origin of the product sold.(Civil Cassation, Section III, 24/09/2015, no. 18860)

Agencies - company transfer

Article 2112 of the Civil Code may apply to the activities of a free insurance agent, if the company

transfer takes place in two related phases, consisting in the revocation of the mandate by the

principal and the latter's withdrawal of the company assets used to manage the agency, and the

subsequent transfer of it by the principal to new agents, where the pre-existing business retains its

identity and the company continues to be run uninterrupted by the new owners with the same

employees as before the transfer. (In the case in question, the Cassation confirmed the challenged

judgement, which had excluded a company transfer because the new agent did not take over theassets and premises of the previous agent, do not use the existing staff and, in addition, there was

no reference in the agent's mandate to the previous relationship).(Civil Cassation, Labour Section, 21/08/2015, no. 17063)

Compensation pursuant to article 1751 bis of the Civil Code

With regard to agency contracts, article 1751-bis, paragraph 2 of the Civil Code, introduced by

article 23 of Law no. 422 of 29 December 2000, which states that the signing of a non-competition

clause entails payment to the agent of a non-commission fee on the termination of the relationship,

does not apply to pacts signed before the law came into force, even if the agency contracts to

which it refers were sold subsequently.(Civil Cassation, Labour Section, 11.06.2015 no. 12127)

Agencies - revaluation of credits

With regard to the nature of the credits deriving from an agency contract, these amounts may be

automatically revalued only if they derive from a relationship where the agent's activities are

performed personally and with continuity, and therefore excluded if the agent has a corporate

structure.(Civil Cassation, Labour Section, 11.03.2015 no. 4875)

Contributions owed by an insurance company to the agents' pension fund - Sums deposited withthe insurer's fund - Compulsory winding-up of the depository - Pre-emption under article 2751 bis,no. 3, of the Civil Code. - Monies owed to the fund - Exclusion

With regard to the general pre-emption on assets for commissions and compensation deriving

from the agency relationship, article 2751 bis, no. 3, of the Civil Code shall only apply to

relationships between agent and principal; the said pre-emption right does not belong to the

agents' pension fund, a creditor in its own right of the insurance company, in this case placed into

compulsory receivership, for the contributions, deposited with the latter but owed by it to the

former; the credit does not provide grounds for compensation for termination of relationship under

article 1751 of the Civil Code, nor the alternatives foreseen by the collective agreements which

presuppose termination of the agency contract between principal and agent.

(Civil Cassation, Section I, 06/03/2015, no. 4627)


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Property rental - sale of the tenancy agreement

In the event of a sale of a tenancy agreement (together with that of a company) under the terms of

article 36, Law no. 392 of 1978, without the lessor's consent, there exists a subsidiary liability

between the seller and the assignee who then becomes the tenant of the property, characterized

by mere beneficium ordinis, which permits the lessor to seek satisfaction from the seller through

the normal legal channels of the obligations inherent in the aforementioned contract, only once a

breach by the new tenant has been perpetrated.

(Civil Cassation, Section VI, 12/11/2015, no. 23111)

Property rental - alternative use - determination of the rent

Free determination of rent on properties not destined for habitation does permit the parties to

agree incremental rental payments over the duration of the contract, providing the increments are

linked to predetermined contractual conditions which regulate the economic equilibrium of the

relationship, without affecting - or circumventing - the rules on annual variations in the purchasing

power of the currency.

(Civil Cassation, Section III, 30/09/2015, no. 19524)

AMONG OUR JUDGEMENTS

The appeal to (informal) arbitration proposed by an agent under article 18 of the 2003 National

Agents Agreement must be declared inadmissible, due to the complete absence of a joint mandate

by the parties, in the event that the other party contests the existence of a special arbitration

clause in the agency contract calling for an arbitral tribunal to formally resolve the dispute

regarding the interpretation, execution, fulfilment and resolution of the agency contract. The

special clause prevails over a general one in that it expresses the specific wish of the parties. The

collective agreement may prevail, if at all, if the substantive law is more favourable to the worker,

certainly not in the resolution of the dispute between the parties. Regarding agency duties

conferred on corporations or partnerships, intuitu personae remains an unfailing requirement of thecontract, in particular where the corporate structure has changed, either in ownership or

management. The internal structure of the firm on which the insurance company relies and any

changes to it clearly have repercussions for the agency contract and therefore the principal must

give its consent to the variation. In application of this principle, equity sales of over 5% of the share

capital of agent firms without the principal's consent and without even taking steps to solicit such

consent, represents a unilateral decision by the company contrary to the provisions of the agency

contract, entailing the resolution by law of the contract in accordance with the provisions of the

agency contract, as a serious breach of the agent's obligations.

(Court of Milan, 15/12/2015, by Bonaventura Minutolo)

INSURANCE LEGISLATION

Among the principal measures of 2015 we should highlight:

Regulation no. 8 of 3 March 2015 which defines the simplification of procedures and obligations in

contractual relationships between insurance companies, intermediaries and customers, partly in

enactment of article 22, paragraph 15 bis, of Legislative Decree no. 179 of 18 October 2012,

converted into Law no. 221 of 7 December 2012.

The most important features are:

• an obligation on firms and intermediaries listed in Sections A, B and D of the RUI (Register of

Intermediaries) to obtain a certified e-mail address for customers to use in deeds andcorrespondence (article 4);


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• an incentive to use an advanced, digital and graphometric electronic signature with title to sign

insurance policies and contract documentation (article 5);

• the provision of customers, free of charge, with electronic payment tools, including online, to paytheir insurance premiums (article 6);

• the possibility to receive/send precontractual and contractual documentation via e-mail.

It is understood that the customer is free to choose, at any time, how the documentation is

delivered.

Regulation no. 9 of 19 May 2015 governing the claims statement and risk certificate database

pursuant to article 134 of Legislative Decree no. 209 of 7 September 2005- private insurance law - dematerialization of the claims statement. Insurance companies are

obliged to provide digital claims statements online, published in a special area of its web site at

least 30 days prior to expiry of the contract.


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Milan20122 Milano Via San Barnaba, 32Tel.: + 39 02 55 00 11

Rome

00195 Roma

Piazza Giuseppe Mazzini, 2Tel.: + 39 06 3204744;

+ 39 06 37351176

Turin 10121 Torino

Via Raimondo Montecuccoli, 9Tel.: + 39 011 52 10 266

Trento

38122 Trento Via Galileo Galilei, 24Tel.: + 39 0461 26 06 37

Parma 43121 Parma

Strada Petrarca 18 Tel.: + 39 0521 23

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Highlights T&P 2015 ENG

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