Foreign employers approaching the Italian market often focus on legislation and the individual employment contract. In practice, however, much of the employment relationship is governed by national collective bargaining agreements, commonly known as CCNLs (“Contratti Collettivi Nazionali Lavoro”).
A CCNL is normally negotiated between employers’ associations and trade unions for a particular industry. It regulates matters that legislation leaves to collective bargaining or addresses only in general terms, including job classification, minimum salary, working time, overtime, holidays, sick pay, probation, notice periods and disciplinary rules. The applicable agreement may therefore influence both the cost of employment and the employer’s managerial decisions.
Unlike legislation, CCNLs are not automatically binding on every Italian employer. They generally apply because the employer belongs to the association that signed the agreement, because the employment contract refers to them or because they have been consistently applied within the business. Nevertheless, their relevance extends further. Italian courts frequently use the salary levels established by representative CCNLs when assessing whether remuneration complies with the constitutional requirement that pay be proportionate and sufficient. Legislation also expressly assigns collective agreements an important role in regulating flexible forms of work.
Identifying the appropriate CCNL is not always straightforward, particularly where a foreign company carries out several activities or hires its first employee in Italy. Choosing an agreement merely because it appears less expensive can create claims for salary differences, incorrect job classification or contribution liabilities.
For international employers, the CCNL should therefore be considered before the employment contract is drafted. It is not simply a payroll reference but one of the central sources governing the Italian employment relationship.