(a) Yes. There is a law applicable to all self-employed relationships (including those of contingent workers) under which the provisions on subordinate employment will apply to self-employed workers. Their work must be performed on an ongoing and coordinated basis, in a mostly personal and continuous manner, and organized by the client/principal. This includes work done through digital platforms (i.e., contingent workers).
Moreover, there is a set of rules specifically governing the work performed by riders (providing them with certain entitlements concerning compensation, insurance against accidents at work, etc.).
The general provision on self-employment relationship law (as described above) can be applied (and has been applied in recent case law) as an alternative to the above rules governing riders' relationships when contingent workers' (in the case law — riders) activity is coordinated by the client/principal as per the above.
(b) No. Generally, contingent workers are self-employed individuals subject to self-employed individuals' social security (where two-thirds of the contributions are paid by the principal/client). However, should the workers' activity be coordinated by the client/principal, social security rules applicable to subordinate employment will apply. Social security rules applicable to subordinate employment will also apply if the relationship with a self-employed contingent worker is reclassified by the labor authorities as subordinate employment (in such case, sanctions for unpaid contributions may apply).
(c) No. See above (however, please note that in the case of a self-employment relationship being reclassified into an employment relationship, differences in social security contributions may be claimed retrospectively).
(a) Yes. The rules on subordinate employment mentioned above may not apply to relationships explicitly regulated by a national collective bargaining agreement providing a specific economic and regulatory treatment, due to the particular production and organizational needs of the relevant sector.
(b) Yes. See point (a) above.
(c) Yes. See point (a) above.
Yes. From 3 November 2020, the rules specifically governing the work performed by riders are in force. This includes specific rules on riders' remuneration. These rules provide that criteria for the riders' remuneration will be provided by the collective bargaining agreements. Just one national collective bargaining agreement (NCBA) has been issued so far and it was undersigned by Assodelivery and UGL Rider. The NCBA entered into force on 3 November 2020. However, several court decisions have stated that this NCBA is not valid due to lack of representativeness of the UGL union, with the consequence that courts have decided for the application of a different NCBA entered into by major unions. In these cases, the NCBA generally identified as most appropriate for riders is the NCBA for employees of the logistic sector.
In the absence of a collective bargaining agreement, the riders cannot be remunerated based on deliveries made, but they will be guaranteed (i) a minimum hourly pay based on minimum tables established by collective bargaining agreements in similar or equivalent sectors and (ii) supplementary indemnity for working at night, during public holidays or inclement weather (the amount of this indemnity will be determined by collective bargaining or — lacking an NCBA — by the Ministry of Labor, but, in any case, will be no less than 10%).
The EU directive on platform workers, which was adopted by the EU Parliament in early 2024, seeks to improve the working conditions of individuals performing work for a digital labor platform. Broadly, the directive provides that an individual working for a digital labor platform will be presumed to be its employee where facts indicating control and direction are present. For more information, please see our client alert here.
Further, from 14 April 2022, principals using contingent workers through digital platforms are obliged to notify the Ministry of Labor by the 20th day of the month following the establishment of the relationship. They must also submit the data of the workers engaged through the digital platform, the principal's personal details, the date and time of the start and end of the service, the contractual classification and the expected duration of the work to be performed. Failure to comply with such obligation may result in an administrative sanction ranging between EUR 100 and EUR 500 for each contingent worker concerned.
The main employment law risk is the application of the provisions governing subordinate employment instead of those specifically governing the riders' relationship. The rules on subordinate employment will apply to those self-employed workers whose work is performed on an ongoing and coordinated basis, in a mostly personal and continuous manner, and organized by the client/principal.
In this case, (i) the worker is entitled to protections granted to permanent employees by law and by the applicable national collective agreement (e.g., minimum wage, time limits, statutory end-of-service benefit, health and safety protection and prevention), and (ii) the principal may have to pay (among other things) social security contributions at the higher rates for employees and penalties for not having previously paid these contributions, should a noncompliance with social security provisions be detected.
Additionally, it is not possible to completely exclude the risk that the self-employment relationship entered into with the contingent worker will be reclassified by the labor authorities into subordinate employment, with the consequent application of several provisions governing subordinate employment relationships only (e.g., rules on fair termination of the employment) and conviction to pay missing social security contributions, plus sanctions and interests.
Furthermore, according to recent case law, contingent workers who are considered to be subordinate employees are also counted for the purposes of collective redundancies. Consequently, if the statutory threshold (five terminations over 120 days) is exceeded, the employer must start an information and consultation procedure with the relevant trade unions. Failure to comply with the rules on collective redundancies/information and consultation may result in anti-union behavior.
In a decision issued on 9 January 2023, the Italian Supreme Court confirmed that for the purpose of assessing whether a self-employment relationship should be reclassified as an employment relationship, the content of the (self-)employment agreement executed by the parties has a minor role. Regardless of the qualification of the relationship by the parties, the existence of an employment relationship depends on the actual circumstances between the parties (e.g., if the worker is subject to many orders/directions from the principal, thus creating a subordinate position — this may be considered by the court to determine if there is an employment relationship).
In addition, the Court of Milan has recently reclassified the relationship between a food delivery company and a rider as that of employment. The court found that although the parties entered into a self-employment agreement, the rider (i) was actually subject to the company's directions, (ii) did not make any autonomous decisions and (iii) did not assume business organizational measures/risks typical in self-employed workers, given the entrepreneurial nature of self-employment.
For this reason, the court declared the existence of an employment relationship from the start of the self-employment agreement and, therefore, mandatory application of law provisions for employees, as well as the provisions of the NCBA for employees of the trade sector (which was deemed the most appropriate NCBA by the court (Note, in other cases, the NCBA for employees of the logistics sector was declared applicable to riders)).
The application to contingent workers of protections granted to permanent employees would result in higher costs for the employer and more restrictions on managing the relationship. In addition to this, the reclassification of the relationship into a subordinate employment relationship (if any) may result in potential reputational risk, as well as the application of the provisions governing termination of subordinate employees and the requirement to pay missing social security contributions and applicable sanctions and interest.
The main risk is misclassification. It is possible that in case of reclassification of the employment relationship, the Revenue Agency might challenge the omitted withholding on the amount paid to the workers and order the employer to pay for any deficiency.
The penalties are 90% on the amount due for the filing of an unfaithful tax return and 20% on the amount due for the withholding taxes not applied.
The application to contingent workers of protections granted to permanent employees implies that the principal may have to pay (among other things) social security contributions at higher rates for employees and penalties for not having previously paid these contributions.
The penalties are 100% on the amount due plus interest.
From a pension standpoint, the risk is that the client/principal may be deemed liable for the missing social security contributions. In such case, should social security contributions be time-barred (i.e., the Italian Social Security agency is prevented from collecting the relevant amount), the worker may be granted an award in court for pension-related damages that the client/principal could be required to pay.
It must also be noted that from a health and safety perspective, contingent workers must be covered by specific insurance against accidents at work within the National Agency for Industrial Accidents, and a number of health and safety provisions must apply (e.g., clients/principals must provide protective equipment to the drivers, including masks during the pandemic). Fines and criminal sanctions may apply for failure to comply with health and safety regulations.
If, as a result of misclassification of the contingent worker, the company is found to be in breach of its duties to pay social security contributions at the higher rate for employees, the following penalties could apply in addition to payment of unpaid social security contributions and relevant interests (the penalties depend on the amount of unpaid contributions):
- Fine of between EUR 10,000 and EUR 50,000 for up to EUR 10,000 worth of unpaid contributions
- Three years' imprisonment and EUR 1,032 fine for unpaid contributions exceeding EUR 10,000
No, from a tax perspective, there are no precedents in this area involving criminal liabilities.
The employer could be deemed criminally liable if the amount of unpaid contributions exceeds EUR 10,000.
Moreover, the employer could be deemed criminally liable if it causes the worker's death or serious injuries by negligence, or as a consequence of the failure to comply with the health and safety rules applicable at the workplace.