On January 31, 2020, the Council of Ministers of the Italian Government declared, for six months, the State of Emergency as a consequence of the health risk connected to the onset of pathologies deriving from transmissible viral agents.
Summary:
- Introduction
- Employment measures
- Loans and other facilities
- Litigation: hearings postponement and procedural terms suspension
- Alternative dispute resolution (ADR) proceedings
- Handling of company general meetings
Introduction
Since it was clear that the COVID-19 spread was dramatically increasing in Italy causing the health emergency, several measures have been adopted, aimed at limiting the occurrence of significant disruptions to the financial system and cope with the crisis.
The emergency legislation has been released gradually as the Government’s intentions have always been meant to avoid or, at least, to postpone the full lockdown.
In fact, on February 23, 2020, a decree of the President of the Council of Ministers, issued the first restrictive measures, to be adopted in the most affected areas located basically in the Lombardy and Veneto regions.
Such measures were followed by restrictions on school activities and other public events in the affected areas (on February 25, 2020).
With a decree of the President of the Council of Ministers, released on March 1, 2020, a new set of restrictions entered into force for the most affected areas, along with further restrictive measures applicable in the whole territory. Furthermore, schools and other educational institutions shutdown has been extended in the whole territory on March 4, 2020.
On March 9, 2020, individuals‘ movement restrictions, initially enacted within certain most affected areas, were extended to the whole Italian territory.
Except for those relating to the sale of essential goods, retail activities have been imposed to lockdown since March 11, 2020.
In order to face the lockdown consequences, the Law Decree No. 18, issued on March 17, 2020 (“Cura Italia” Decree) set forth the first and most relevant provisions taken to facilitate immediate relief to workers and SMEs, through extension and deployment of existing instruments and complementing measures.
A time extension of the provisions set forth in the “Cura Italia” Decree and further relief actions are supposed to be released in the announced decree expected by April 2020.
We set out below a summary of the main FAQ on the enacted measures so far.
Employment measures
- All companies are supposed to shut down?
No.
The government has ordered the temporary shutdown of most f the companies, until April 3rd, 2020; employees, when possible, will be allowed to keep on working remote (see infra).
The list of companies that will be allowed to keep on their ordinary activity is attached to the Law Decree of March no. 18 of 17th, 2020.
- Are there specific measures to be adopted by employers?
Yes.
Employers are entitled to check their employee’s body temperature before they enter the workplace, in compliance with the provisions on privacy. If the employee’s temperature exceeds 37.5°, he will be prohibited from entering the workplace.
As far as possible, entry/exit times, work shifts and canteen times should be organized in a way that allows avoiding contacts among the employees.
The company is required to ensure the daily cleaning and periodic sanitization of premises, environments, workstations and common/leisure areas; in particular, it is necessary to ensure the cleaning at the end of the shift and the periodic sanitization of keyboards, touch screens, mouse with appropriate detergents. In case of the presence of a person with COVID-19 inside the company premises, the company’s premises shall be cleaned and sanitized according to the provisions of Circular no. 5443 of 22 February 2020 of the Ministry of Health.
The employer shall ensure that the interpersonal distance of one meter is respected and shall also ensure the correct ventilation of the company’s premises; if the kind of activity performed by the employers does not allow to respect such distance, the employer shall provide his employees with masks and other protective devices (gloves, etc.). The masks shall be used following the indications of the World Health Organization.
The employer should also endeavor to reduce as much as possible the opportunities of contact between suppliers/external visitors and staff.
Meetings in attendance are not allowed. Whether such meetings are urgent and cannot be avoided, their participation must be reduced to a minimum and, in any
case, the interpersonal distance of one meter and the adequate cleaning of the premises must be guaranteed; in addition, all internal events and all classroom training activities, even if already organized, are suspended and canceled.
- Is remote working recommended?
Yes.
The Government has strongly recommended to all companies to allow their employees to work from remote, as long as it is possible. Remote working is generally regulated by law 81/2017 but, until July 31, 2020, some of its provisions are suspended. In particular:
- there is no need of an individual agreement for the smart working with the employees, which means that employers can unilaterally decide to make their employees working from remote; they are only required, within 5 days from the moment the employee starts working from remote, to communicate their decision to the Ministry of Labor by filling online a form on the website “clicklavoro”;
- employers are now required to submit for their employees the so-called RLS (i.e. workers’ representative for safety) a form containing information on safety at work that can be downloaded on the INAIL’s website;
Employers cannot refuse to allow the remote working to those employees having children with serious disabilities who are hosted by rehabilitation centers that have been closed by the last government’s decrees, as long as the employee’s tasks can be performed working from remote.
- Is there any bonus for employees who keep on working on the company’s premises?
Yes.
Employees with a gross annual income not exceeding € 40,000 who continue to work at their ordinary place of work during the COVID 19 health emergency, will be entitled to receive a one-off bonus worth € 100 in March 2020.
The bonus does not contribute to the formation of the employee’s tax base, for direct taxation, and is calculated based on the days worked in the company’s premises.
The bonus is paid, automatically, by the employer, which pays it, if possible, with the pay-slip of April.
- Is there any temporary suspension of the payment of withholding taxes, social security contributions, mandatory insurance premium, VAT?
Yes.
For most companies, the terms for paying i) withholding taxes and ii) social security contributions and mandatory insurance premiums are suspended until April 30, 2020.
The terms for paying the VAT expiring in May 2020 are suspended too.
The abovementioned taxes shall be paid (with no sanctions nor interests)
- In a single payment by May 31, 2020
- Through a payment schedule (up to 5 monthly installments of the same value) as from May 2020.
- Is there any incentive for the sanitization of the company’s premises and work instruments?
Yes.
For the tax period 2020, employers are entitled to a tax credit equal to the 50% of the cost incurred for the sanitization of the company’s premises and work instruments, within a maximum limit of € 20,000.00
- Has been provided any extraordinary wage guarantee fund?
Yes.
“Cassa integrazione” (i.e. wage guarantee fund) is a measure aimed at reducing the personnel cost for employers in case of suspension/reduction of the company’s activities due to exceptional circumstances (e.g. the health emergency
caused by the spreading of the COVID-19). Currently, companies can apply for 2 different types of Cassa Integrazione: the so-called “Cassa Integrazione Ordinaria” (CIGO) and the so-called “Cassa Integrazione in Deroga” (CIGD) based on the company’s field of activity and others very specific parameters.
Moreover, companies that do not meet the requirements for the CIGO nor the CIGD can apply for the “Assegno Ordinario”, another measure aimed at supporting companies during the health emergency.
The regulation of the abovementioned measure is now provided by Law Decree no. 18 of March 17, 2020.
“Cassa integrazione Ordinaria” (CIGO)
Companies entitled to apply for the CIGO are:
- enterprises working in the industrial manufacturing, transport, mining, system installation, production and distribution of energy, water and gas fields;
- production and work cooperatives that carry out work activities similar to those of workers in industrial enterprises, except for cooperatives listed in Presidential Decree no. 602 of 30 April 1970;
- enterprises working in the forest, forestry and tobacco industry;
- agricultural cooperatives, zootechnics and their consortia that carry out the processing, handling and marketing activities of their agricultural products only for their employees with permanent employment contracts;
- film rental and distribution companies and film development and printing companies;
- industrial companies for the pressing of olives;
- companies producing ready-mixed concrete;
- electrical and telephone companies;
- railway equipment companies;
- industrial enterprises of public entities;
- industrial and craft enterprises operating in the building industry and related sectors;
- industrial enterprises engaged in the excavation and/or processing of stone material;
- craft enterprises engaged in the excavation and processing of stone materials, except for those which carry out such activity in laboratories with facilities and organizations separate from the excavation activity.
The CIGO can last for a maximum of 9 weeks, up to August 31, 2020; during such period, the INPS (i.e. national social welfare institution) pays to the employees hired before February 23, 2020, a wage supplement for non-worked hours equal to 80% of their ordinary salary (but, in any case, the wage supplement cannot be higher than a monthly ceiling established by the government). The CIGO is a retroactive measure, which implies that the wage supplement can be paid as of February 23, 2020.
The CIGO is managed directly by INPS and, from a general point of view, can be activated by sending a request (containing the number of employees affected by the suspension) that shall be filed online on the INPS website.
To access to the CIGO, companies shall file a request on the INPS’ website (www.inps.it), indicating i) the name and number of employees affected by the suspension; ii) the duration of the suspension; iii) how many hours the employees will keep on working (which also might be 0 hours).
The application shall be submitted by the end of the fourth month after the one in which the suspension or reduction of the company’s working activity began. Within three days from the submission of the application for the CIGO, the Company shall have a meeting with the Trade Unions (also via Skype or similar apps), to inform them of the measures required to the INPS.
“Assegno ordinario”
Companies that do not meet the abovementioned requirements for the CIGO but pay contributions to the FIS (“Fondo di integrazione salariale”, i.e. “fund for the integration of the remuneration”) or the “Fondi di Solidarietà Bilaterali” (i.e. “bilateral solidarity funds”) and have more than 5 employees can access to the “Assegno ordinario”, another wage guarantee fund similar to the CIGO.
The “Assegno Ordinario” can last for a maximum of 9 weeks, up to August 31, 2020; during such period, the INPS (i.e. national social welfare institution) pays to the employees hired before February 23, 2020, a wage supplement for non-worked hours equal to 80% of their ordinary salary (but, in any case, the wage supplement cannot be higher than a monthly ceiling established by the government). The “Assegno Ordinario” is a retroactive measure, which implies that the wage supplement can be paid as from February 23, 2020.
The application for the “Assegno Ordinario” shall be submitted by the end of the fourth month after the one in which the suspension or reduction of the company’s working activity began. The application shall be submitted by the employer exclusively online on the website www.inps.it, using the services for “Companies, consultants and professionals”, under “Services for companies and consultants”, the option “CIG and Solidarity Funds”, selecting the causal “COVID-19 national emergency”. The Company shall indicate i) the name and number of employees affected by the suspension; ii) the duration of the suspension; iii) how many hours the employees will keep on working (which also might be 0 hours). Within three days from the submission of the application for the “Assegno Ordinario”, the Company shall have a meeting with the Trade Unions (also via Skype or similar apps), to inform them of the measures required to the INPS. Such a step is not necessary for companies employing less than 5 workers.
Cassa integrazione in deroga
Companies that do not meet the abovementioned requirements for the CIGO and the Assegno Ordinario can send an application for the CIGD.
The CIGD can last for a maximum of 9 weeks, up to August 31, 2020; during such period, the INPS (i.e. national social welfare institution) pays to the employees hired before February 23, 2020, a wage supplement for non-worked hours equal to 80% of their ordinary salary (but, in any case, the wage supplement cannot be higher than a monthly ceiling established by the government). The CIGD is a retroactive measure, which implies that the wage supplement can be paid as of February 23, 2020.
The CIGD is generally managed by the single Italian Regions: in general, the company shall send a formal application to the Region, following the procedure indicated on the Region’s website. However, companies operating in more than 5 regions shall send their application to the Italian Ministry of Labour.
The application shall be submitted by the end of the fourth month after the one in which the suspension or reduction of the company’s working activity began. The company shall indicate i) the name and number of employees affected by the suspension; ii) the duration of the suspension; iii) how many hours the employees will keep on working (which also might be 0 hours).
Within three days from the submission of the application for the CIGO, the company shall have a meeting with the Trade Unions (also via Skype or similar
apps), in order to inform them of the measures required to the INPS. Such a step is not necessary for companies employing less than 5 workers.
- Does wage guarantee fund work for any kind of employee?
No.
Only operai (i.e. blue collars workers), impiegati (i.e. white collars workers) and quadri (i.e. middle managers) are entitled to receive the abovementioned wage supplement, as dirigenti (i.e. executives) are excluded from the CIGO.
- Are employers allowed to dismiss employees for economic reasons?
No.
For a period of 60 days (from March 17th, 2020 up to May 15th, 2020) all dismissals for “justified objective reasons” (i.e. dismissals for economic reasons under law 604/1996), including collective dismissals, are prohibited.
Moreover, redundancy procedures started before February 23rd, 2020, are suspended until May 15th, 2020.
- Can workers with children get special paid leaves?
Yes.
For the year 2020, from March 5th, 2020, during the period of suspension of childcare services and educational activities in schools of all levels, parents of children up to 12 years old (or children of any age with serious illnesses, certified according to the disposition of Law 104/1992) will be able to take a leave of absence, for a continuous or fractioned period not exceeding 15 days, during which they will be guaranteed an allowance equal to 50 percent of their salary. The allowance will be paid by the INPS (the modalities will be specified in the upcoming days).
Parents of children between 12 and 16 years old will be entitled to an unpaid leave of absence (continuous or fractionated) of fifteen days. In both cases, the 15 days of leave of absence shall be divided between both parents. Parent workers will be entitled to take such leave of absence as long as the other parent
in the household i) does not receive any income support (for the suspension or cessation of his/her employment) or; ii) is not unemployed.
The leave of absence is an alternative to the so-called “babysitter bonus” that can be required by the employee to the INPS.
- Is there any special measure for workers providing care to relatives with disabilities?
Yes.
Workers entitled to the so-called “104 paid leaves” (i.e. 3 days of paid leaves each month for providing care to relatives with disabilities) will be allowed to take 12 additional days of paid leaves, to be taken between March and April 2020.
- Shall the period that workers spent in quarantine included in the illness protected period?
No.
The absence of those workers who have been quarantined (because: i) they have been in contact in the last 14 days with someone who was infected by the COVID-19, ii) they are coming back to Italy from abroad; please consider that some southern regions, e.g. Apulia, have issued specific ordinances on quarantines, providing for ad hoc rules) shall be considered as sick leave and it shall not be included in the illness protected period.
- Are holidays and paid leaves encouraged?
Yes.
The Italian Government, through the Decree of the President of the Council of Minister of May 8th, 2020, has highly recommended to all employers to allow their employees to take holidays and paid leaves; therefore, adhering to the interpretation of such provision shared by most of the scholars, we deem that the employer can legitimately ask his employees to take holiday leaves, as long as the restrictive measures adopted by the Government due to the spreading of the COVID-19 last.
- Can employees legitimately refuse to keep on working on the company’s premises if safety measures have been adopted by the company?
No.
Employees who are afraid of being contaminated and do not want to work in the company’s premises can ask to take holiday/paid leaves (in consideration of the abovementioned new Government’s dispositions, we strongly recommend you to allow them to take such leaves); however, if the employees do not have any holiday/paid leave left (or they do not want to take them), the company might decide (but there is no legal obligation in this sense) to grant them an unpaid leave of absence; however, in this case, the company shall keep on paying the employee’s social security contributions.
In any case, if the company has adopted all the necessary measures to avoid potential contamination within the company’s premises, employees are not allowed to simply refuse to go to work without taking one of the abovementioned leaves; therefore, their refusal shall be considered unmotivated and they can receive disciplinary sanctions.
Loans and other facilities
- Are there specific provisions to micro, small and medium enterprises?
Yes.
As COVID-19 outbrake has been formally recognized as an extraordinary and serious disturbance event for the economy, companies whose debts are not qualified as impaired exposure and past due can benefit from the following measures:
a) credit facilities and loans granted against receivable advances existing on February 29, 2020, cannot be revoked until 30 September 2020;
b) loans with single reimbursement expiring before September 30, 2020, are extended until September 30, 2020, at same conditions;
c) loans and other facilities to be reimbursed in installments, the payment of installments or leasing rentals expiring before September 30, 2020, is suspended
until 30 September 2020 and the reimbursement plan is deferred so to ensure that no further charges apply to both parties.
- Is there a specific process to access such benefits?
Yes.
Applications to banks, financial intermediaries and other entities authorized to grant credit must be accompanied by a company self-declaration aimed at certifying having temporarily suffered liquidity shortages as a direct consequence of the widespread outbreak of the virus COVID-19.
- May activities mainly affected by the emergency suspend payments of withholdings, social security and welfare contributions and premiums for compulsory insurance’
Yes.
Companies entitled to benefit from the suspension are those in the entertainment, sports, and restaurants. Withholding payments, social security, and welfare contributions and premiums for compulsory insurance are suspended.
Payments will be due – without the application of penalties and interest – by 31 May 2020 or split into five equal monthly payments starting from the same date.
- Is there any tax fulfillment suspension?
Yes.
For taxpayers carrying out a business, art or professional activity, which achieved a total amount of revenues or a turnover not exceeding 2 million Euro in the previous fiscal year, withholding taxes, VAT, social security and welfare contributions and premiums for compulsory insurance are postponed.
Payments will be due – without the application of
penalties and interest – by 31 May 2020 or split into five equal monthly
payments starting from the same date.
- Are there particular benefits for retailers?
Yes.
Except for the activities of trade in food and basic necessities, a tax credit equal to 60% of the amount of real estate rental expenses paid in March 2020 is established (for the properties included in the cadastral category C/1) in favor of retailers.
Such a benefit is not applicable in case of a business lease.
Litigation: hearings postponement and procedural terms suspension
- Have civil proceedings been affected by the outbreak of the virus COVID-19?
Yes.
All the hearings of the civil and criminal proceedings pending have been postponed ex officio after April 15, 2020.
At the same time, all procedural terms have been suspended for the same period (until April 15, 2020).
Each term beginning in the suspension period shall be postponed to the end of the said period. When the term is counted backward and falls in whole or in part in the suspension period, the hearing or the activity from which the term starts is deferred to meet the deadline.
Therefore, until April 15, 2020, it will not be possible to commence or to continue any new lawsuit in Italy.
- Is it possible to start an urgent proceeding aimed at avoiding serious and irreparable damage (or indifferent proof must be taken)?
Yes.
All proceedings whose delayed treatment can cause serious harm to the parties can be introduced and decided, despite the suspension of the Court’s activity.
In such a case, declaration of urgent treatment of the case is made by the head of the judicial office or by his delegate at the bottom of the summons or appeal, with a not challengeable decree and, for the cases already started, with a ruling by the investigating judge or the chairman of the college, also not challengeable.
- Are criteria to determine urgency the usual ones?
No.
Certainly, there are urgent causes or decisions in the absence of which a party can suffer serious and irreparable damage or very serious reasons exist.
However, the ordinary urgency, that is the one identified for the interim proceedings already provided for by the civil procedure code, would not seem sufficient: the urgency at the time of the Coronavirus must have a quid pluris; a “super urgency” that must be recognized by the head of the judicial office.
- Are there specific measures to be adopted for proceedings held until June 30?
Yes.
Until June 30, 2020, all hearings (those urgent until April 15, 2020, or ordinary hearings treated until June 30, 2020) not requiring the presence of subjects other than the defenders and the parties, can be handled through remote connections (i.e. through videoconference hearings). Nevertheless, even in remotely held hearings, contradictory and effective participation of the parties must be granted.
However, if the hearings are supposed to be attended by lawyers only (without the presence of parties, witnesses, technical consultants, etc.) they can also be replaced by the exchange and filing in electronic form of written notes containing requests and conclusions, with the subsequent adoption of the judge’s ruling outside the hearing.
- Is it possible to file a request for an injunction order?
No.
During the emergency period, it is not possible to request an injunction, as it is not possible to introduce a lawsuit to obtain payment of sums; but if the payment of sums is necessary for the survival of the creditor company, maybe it will be possible to request an urgent decision measure emergency.
- I have won a case, but counterparty does not want to pay: does the suspension of the activity affect my rights?
Yes.
All judicial activity is suspended, therefore, also all the activities necessary to enforce an already obtained measure are suspended until April 15, 2020.
Alternative dispute resolution (ADR) proceedings
- Have ADR proceedings been affected by the outbreak of the virus COVID-19?
Yes.
From March 9, 2020, to April 15, 2020, the terms for carrying out any activity related to mediation proceedings and assisted negotiation, as well as for all the out-of-court dispute resolution procedures governed by the provisions in force, are suspended.
Furthermore, the aforementioned proceedings commenced by 9 March 2020 are suspended, when they are mandatory to carry on the judicial claim as well as proceeding duration terms.
- I started a mediation against my heirs before March 9 to obtain the judicial division of inheritance. What happens in this period? Is the process blocked?
Yes.
The matter falls within the category of the ones for which the attempt to mediate ante causam is mandatory. Therefore, the procedure is subject to the aforementioned suspension of terms.
However, since the suspension is not for the procedure itself, but it is related to the terms for carrying out the activities, mediation bodies which able to grant the meetings to be held electronically can avoid suspending the proceeding.
- I started a mediation process to change my child’s maintenance conditions. Does the process continue?
Yes, with the factual limitations just mentioned.
Unlike the previous case, mediation in this matter is not mandatory. Consequently, since this procedure is not affected by the suspension of the terms, it should be able to continue its course, provided that the health of the parties is adequately protected.
- Can I apply for mediation during this period?
Yes.
However, given the suspension of deadlines, meetings for mandatory matters during this period are often not immediately fixed by the bodies.
- Can my counterpart legitimately not adhere to the mediation request within the deadline set by the body?
Yes, given the exceptional nature of the period.
Normally, in case of mandatory mediation, the party called in mediation is obliged to join and attend the first meeting set by the body within the established deadline. However, if the meeting’s date falls during the aforementioned period of suspension, the party may be entitled to refrain from attending the meeting.
- I am supposed to commence an assisted negotiation as a prerequisite to go before a court for a claim related to damage compensation after a road accident: can I proceed with the invitation to negotiation?
Yes.
Nevertheless, such an invitation may result quite useless during this period since counterparty will probably ignore it, as the terms are suspended in the case of mandatory assisted negotiation. After April 15, unless further limitations
extension, counterparty shall be obliged to respond to the invitation to avoid the consequences provided for by the legislation.
- I invited counterparty to assisted negotiation before March 9th. Is the inertia to react to my invitation legitimate?
Yes.
The counterparty will be able to wait beyond the 30-day deadline set by law to respond to the invitation to the assisted negotiation, given the suspension of the expiry of the terms.
- An assisted negotiation proceeding is in progress and counterparty has accepted my invitation. Are the proceedings suspended?
Since the procedure is ongoing and is based on cooperation in good faith and loyalty, parties are supposed to continue to reach an agreement.
- Modification of the divorce conditions has been set as a result of an assisted negotiation. Can I enforce the payment of my child’s maintenance?
Yes.
It is your right to request the payment of maintenance based on the enforcement order, obtained at the end of the assisted negotiation proceeding.
In this case, there is no suspension of the terms since it is a matter of maintenance obligations.
Handling of company general meetings
- The administrative body of a limited liability company is unable to prepare the draft of the balance sheet by the end of March, nor by the end of April. A resolution of the board of directors must be adopted for this purpose to acknowledge that the company will take advantage of the 180-days long term provided by the civil code following the particular requirements
relating to the structure or object of the company referred to in article 2478 bis?
No.
The resolution of the board of directors concerning the postponement of the date of approval of the balance sheet is not necessary, as the ordinary term for the approval of the balance sheet has been extended to 180 days from the closure of the social exercise.
- The administrative body prepared the balance sheet within the term of 90 days from the closing date of the financial year, but shareholders are located in different cities in Italy and abroad and cannot hold the meeting at the registered office, as they have done in previous years. Furthermore, bylaws do not provide for the possibility of holding the meeting in tele-audio / conference. Is it necessary to use the 180-day deadline?
No.
It is not necessary to use the 180-days deadline to approve the balance sheet.
In fact, capital companies are now allowed to hold the members’ meeting also by teleconference or video conference, provided that identification of the participants, their participation and the exercise of the right to vote are granted.
Such an option is available even if there is not a specific clause in the articles of association.
- According to bylaws of a limited liability company, members’ meetings can be held remotely, provided that the secretary and the President are in the same place. Due to restrictions on the movement of individuals, the President and the secretary can participate in the meeting but cannot be in the same place. Is it still possible to hold the members’ meetings?
Yes.
During the emergency, members’ meetings held remotely with audiovisual or telephone means of communication are valid even if the President and the Secretary are not in the same place.
- Is it possible to approve the draft of the balance sheet through a written consultation act of the members in the absence of a statutory clause governing this form of approval?
Yes.
Limited liability companies are now allowed to use such an option to approve the balance sheet draft.
- Shall the aforementioned exceptions be valid indefinitely?
No.
Exceptions to the ordinary regulation for the approval of the balance sheet draft will be valid until July 31, 2020 (the date by which the meeting must be called – and therefore not necessarily held) or until the end of the health emergency relating to Covid-19, if later than that date.