Italy: The access to credit is subject to a trade union agreement on employment levels


published on 21 April 2020 | reading approx. time 3 minutes


By issuing the Liquidity Decree (Law Decree no. 23/2020), the Italian Government has considerably strengthened the financial support measures in favor of companies and professionals, some of which were already announced in the previous weeks through the so-called “Cura Italia” Decree of 18 March (Law Decree no. 18/2020).


More in detail, in order to provide companies with immediate liquid assets following a long period of forced shutdown, it has been granted, until 31 December 2020, the access to forms of bank financing fully covered by first demand guarantees provided by the Italian State through the company Sace S.p.A. and the Central Guarantee Fund for Small and Medium Enterprises.

The measure, which is granted up to a maximum budget of 200 billion euros and concerns financing periods not lasting more than 6 years, has recently obtained the green light from the European Commission and is therefore now fully effective.


Though, the granting of the benefit is subject to compliance with determined conditions, including the obligation on the recipient company not to pay dividends for the following 12 months and the necessary allocation of the benefit to support personnel costs and costs of production activities located in Italy.

Moreover, article 1 (paragraph 2, letter l) of the Liquidity Decree establishes, among the various requirements for benefiting from the credit, the obligation for companies to manage employment levels through specific trade union agreements.

This provision, while pursuing a praiseworthy aim, has however some critical points and, most likely because of its extreme conciseness, leaves many questions unanswered.

In particular, the question arises as to when the trade union agreement shall be signed and, therefore, whether or not it must be necessarily stipulated before the financing request is submitted.

The "commitment" to manage the employment levels demanded by the Legislator and the physiological timeframe for reaching an agreement with the trade unions seem to make it sufficient to submit, at the time of the request, a formal declaration of commitment to promptly start the negotiations with the trade unions. It is certain, however, that as long as there are concrete doubts about the possibility of maintaining the ordinary employment levels, companies will have to take into account that, from the time when the financing request is submitted pursuant to art. 1 of the aforementioned Law Decree, any reduction of the employment levels would result in the loss of the benefit, had this not been previously ratified by specific agreement with the trade unions.


It is also unclear what will be the effective categories of workers concerned by the management of employment levels.

As a general rule, however, only open-ended employment relationships (including apprentices) should be taken into account, whereas fixed-term employment contracts and lease of manpower relationships should be excluded, being this kind of workers not permanently part of the company organization. Likewise, possible dismissal procedures for justified individual objective reasons seem to be excluded from the calculation. Indeed, the recent Law Decree does not specifically mention this case, that, unless new updates, remains regulated by the “Cura Italia” Decree of 18 March 2020, according to which such kind of dismissals will be reinstated from 18 May 2020.


In light of the above, it is therefore necessary to wait for further clarifications regarding the concrete implementation of the conditions set out in the Liquidity Decree, while, in the meantime, companies should in any case start carefully evaluating, from a long-term perspective, what the prospects of maintaining their workforce may be.

For the time being, what seems certain is that the lack of clarity and simplicity of certain rules is a difficult obstacle in order to guarantee the need for immediacy and promptness called by the institutions, which is crucial in the current period of crisis.

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