Investment in Italy

Investment in ItalyItalian labour law forbids employers from terminating the employment of a pregnant woman fromthe start of pregnancy until the child is one year old. Dismissal is considered void in this period.However, termination of employment during this period is valid in certain exceptionalcircumstances:• proven gross misconduct of the employee, involving immediate termination of theworking relationship without any notice period• closure of the company• expiry date of a fixed-term contract.Leaving indemnityRegardless of the circumstances in which a work relationship ends, the employee isentitled to receive a leaving indemnity (“TFR”), which is approximately equal to his monthlysalary multiplied by the number of years of work (revalued each year according to specificaccounting rules).Therefore, the employer has to set aside a TFR provision each year for the employees.Alternatively, the employee may ask his employer to pay his TFR into a pension fund.7.1.2 Individual and collective termination of employmentagreementsTermination of an individual employment agreement - individualdismissalsEmployeesThe dismissal of an employee is valid only when there is a true and just cause (grossmisconduct of the employee, involving the immediate termination of the working relationshipwithout any notice period) or a justified reason (less serious misconduct of an employee,or business reasons such as the company’s winding-up, reorganization, etc.). In the case ofdismissal for a justified reason a notice period must be given.If the dismissal of an employee is not based on one of the above grounds, and the employeeobtains a declaratory judgment of unlawful dismissal, the economic consequences dependon the size of the employer:• Employers with more than 15 employees working in the production unit, or 60employees nationwide, are obliged to take back the employee and pay him theremuneration that he would have earned from the date of dismissal to the date that hegoes back and, in any case, not less than five months’ pay. If the employee does notwish to go back, he is entitled to ask the employer to pay an indemnity equivalent to 15monthly salaries instead (plus his remuneration from the date of dismissal, which in anycase, is not less than five months’ pay)• Employers with less than 15 employees are not obliged to take back the dismissedemployee. They can confirm the dismissal and pay an indemnity ranging from two and ahalf to six monthly salaries.70© 2012 KPMG S.p.A., KPMG Advisory S.p.A., KPMG Fides Servizi di Amministrazione S.p.A., KPMG Audit S.p.A., Italian limited liability share capital companies, and Studio Associato Consulenza legale e tributaria, anItalian professional partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.