10.6092/issn.1561-8048/11321
This article analyses the switch of the Italian regulatory approach to subcontracting, from the “fordist” model based on a rigid coincidence between the formal employer (holder of the contract) and the user of the work performance, to the new models of production characterised by “organisational fragmentation”. To this purpose, it considers the evolution of the legislative discipline and jurisprudential elaboration concerning the “appalto” contract, the most common Italian commercial contract as for buying labour, goods or services, alongside that of some neighbouring legal instruments. 
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The identification of the employer in the context of organisational fragmentation: the Italian legal framework
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Domenico Garofalo
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The identification of the employer in the context of organisational fragmentation: the Italian legal framework
https://illej.unibo.it/article/download/11321/11367
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The identification of the employer in the context of organisational                     Italian Labour Law e-Journal
fragmentation: the Italian legal framework                                                     Issue 1, Vol. 13 (2020)
Domenico Garofalo                                                                                    ISSN 1561-8048
domenico.garofalo@uniba.it                                            https://doi.org/10.6092/issn.1561-8048/11321




       The identification of the employer in the context of
         organisational fragmentation: the Italian legal
                            framework
                                            Domenico Garofalo


  1. Introduction. 2.2. The approach of Italian labour law to organizational fragmentation. 3.
  The appalto contract. 3.1. Typical requirements of the appalto contract. 3.2. Criteria and
  indicators of “genuine” subcontracting. 3.2.1. The lack of contractor’s entrepreneurial
  organization. 3.2.2. The exercise of managerial authority by the client. 3.2.3. The use of
  client’s capital, machineries and equipment. 3.2.4. The nature of the work performed. 3.2.5.
  The kind and the nature of the fees. 3.3. Sanctioning regime. 4. Joint and Several Liabilty.
  4.1. A Troubled Regulatory Framework. 4.2. The Current Regulation of Joint and Several
  Liability. 5. Transportation contracts, shipping contracts and subcontracting of
  transportation services. 6. Outsourcing. 6.1. Joint and several liabilities in case of outsourcing.


                                                         Abstract

      This article analyses the switch of the Italian regulatory approach to subcontracting, from the
      “fordist” model based on a rigid coincidence between the formal employer (holder of the
      contract) and the user of the work performance, to the new models of production characterised
      by “organisational fragmentation”. To this purpose, it considers the evolution of the legislative
      discipline and jurisprudential elaboration concerning the “appalto” contract, the most common
      Italian commercial contract as for buying labour, goods or services, alongside that of
      some neighbouring legal instruments.

      Keywords: Employer; Appalto; Subcontracting; Fraudulent interposition; Supply of labour;
      Transportation contract; Shipping contract.




  1. Introduction.

     The employment relationship setup and its regulation presuppose the coincidence
  between the formal employer (holder of the contract) and the user of the work performance.
     It is a bilateral relation, designed by article 2094 of the civil code for a fordist organization
  of work, based on:


  
   Professor of Labour Law, Università degli Studi A. Moro, Bari, Italy. This article has been submitted to a
  double-blind peer review process.
Domenico Garofalo                                                                    Italian Labour Law e-Journal
                                                                                            Issue 1, Vol. 13 (2020)
                                                                                                   Section: Theme


    •    Centrality of the factory/undertaking;
    •    Concentration inside the factory/undertaking of manufacturing and services.

    Competition requirements, especially on the global market, have thrown into crisis that
model, allowing other models to emerge, characterised by “organisational fragmentation”1.
The factory lost its centrality, sometimes even its materiality, by outsourcing its activities.
They started with services (surveillance, cleanings, logistics), including later also segments of
manufacture, offloading onto third parties the risks related to contraction of economic
activity and impossibility of the work performance on the employee’s side (sickness, injury,
pregnancy, etc).
    Besides this phenomenon -often intersecting it- is that of offshoring towards countries
with lower labour costs.
    This different way of production disrupted the bilateral relation (employer-employee),
providing a new one in which there is no coincidence between the holder of the employment
relationship and the user of the work performance. This has opened up the question about
who is the employer and if there are more than one (co-employership doctrine), who can be
charged with employment protections toward workers. Workers are often (always, according
to some) hindered by the organizational fragmentation, being the weak link in the chain.
    Another phenomenon is that of temporary agency work and staff leasing, which
represents a form of “internalized outsourcing”, where the interposition in the employment
of labour is expressly admitted by the law.
    The organizational fragmentation also concerns other important models of work, such as
those included in the so-called platform economy, which can be evoked with the well-known
expression “My boss is an algorithm”2. The work on digital platform, for which a specific
regulation has been introduced by the law-decree no. 101/2019, converted into law no.
128/2019, is accompanied by that of small jobs (so-called gig economy), a kind of a “hymn”
to job insecurity.
    In those cases, it looks more appropriate to refer to “organizational dematerialization”
rather than “organizational fragmentation”. The focus shifts on the employee and the
classification of his/her relationship (subordinate work, dependent contractor, genuinely
autonomous, small entrepreneur), recalling a traditional problem, in the face of a completely
new phenomenology: the eternal dilemma of subordinate employment as a sort of “safe
harbour”, to which should be ferried to receive protection as many workers as possible.


2. The approach of Italian labour law to organizational fragmentation.

   Limiting our reflections to organizational fragmentation in the labour law perspective, the
various expression of fragmentation all share the “interposition”, meaning that a third party
(formal employer) is located in the middle between the employee and the one who takes
advantage of his/her service. He holds an employment relationship with the employee and

1 Garofalo D., Lavoro, Impresa e Trasformazioni Organizzative, in Atti delle Giornate di Studi AIDLASS, Cassino 18-
19 May 2017, Giuffrè, Milano, 2018, 17 ff.
2 O’Connor S., Il mio capo è un algoritmo, in Internazionale, 7 ottobre 2016, 44 ff.



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a commercial relationship with the actual employer. A situation which is supposed to make
that scheme legitimate.
     This article will focus on the attitude of the Italian legal system towards this phenomenon.
Before considering into detail the legislation, it might be useful a chronological scanning of
it, supported by the consideration of case-law and administrative practice.
     The starting point is 2003, the year in which the so-called Biagi reform was enacted (law
no. 30/2003 and legislative decree no. 276/2003). It concluded a phase which lasted 60 years
(1942-2002), characterised by the ban of interposition in the employment of labour, already
mentioned in the civil code and eventually implemented by the law no. 1369/1960.
     The Biagi reform opened a second phase (2003-2018), of “liberalisation”, in which the
split between a formal and a substantial employer is permitted under certain conditions; in
case those conditions are not met, the prohibition of interposition comes back into play
(article 84, legislative decree no. 276/2003).
     In every case, the split between formal employer and user undertaking is subjected to a
joint liability: a protection mechanism for workers, highly dissuasive. A second question
arises, whether joint liability responds to a remedial technique or rises to a general principle
of the legal system.
     As for the identification of the substantial employer, that is to say the one who should
bear obligations toward employees, a complication is represented by the legal relationship
between companies, sometimes contractual, other times corporate. It places a veil, as thin as
impenetrable, between workers and the end user of their performances.
     In the search of the appropriate tool to “pierce the veil” two ways have been followed:
      • The first one is that of identifying the true employer (functionalistic technique),
          making use of the concept of “employee”;
      • The second one is that of allocating the employment relationship on more than one
          employer, making use of the co-debtors’ scheme (co-employership technique).
     Various legal institutions are attributable to this phenomenon:
      • Subcontracting (appalto) and neighbouring legal instruments;
      • Secondment;
      • Group of companies;
      • Temporary agency work and staff-leasing.


3. The appalto contract.

   The appalto contract, regulated by article 1655 of the civil code3, is the most common
commercial contract as for buying labour, goods or services functional to their productive
cycles.
   Labour law has always considered outsourcing practices suspicious, because of possible
exploitation involved, taking place through an indirect use of the workforce, which allows
the employer to get rid of employment protection.


3 Appalto is “a contract by which a party is engaged in the realization of a product or a service in exchange for
a fee, assuming all the organization of the necessary means of production and all the related risks”.

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   This could explain why the civil code in the first place (article 21274), then the law no.
1369 of 1960 and eventually the legislative decree no. 276 of 2003 decided to regulate the
case of productive decentralization, providing employment protection to workers involved
and, at the same time, preventing “pathological” fragmentation.
   Leaving aside the article 2127 of the civil code, because of its scarce effectiveness, it is
worth considering the extraordinary longevity of article 1, paragraphs 15 and 36, law no. 1369
of 1960, providing an irrebuttable presumption of unlawful subcontracting for the case the
means of production used by the contractor are propriety of the client.
   However, this provision did not take into account the evolution of production process
prompted by technological progress and market globalisation. For that reason, case-law tried
an evolutionary interpretation of the rule, diminishing the rigour of the presumption,
focusing on the existence, in the execution of the appalto contract, of the requirements set
out in article 1655 of the civil code. To that end, labour courts investigated the elements
characterizing the relationship between the client and the contractor, to understand whether
the latter involved conditions of organizational and managerial autonomy.
   As for labour intensive subcontracting, the subject matter of the contract ended up
coinciding with the professionality of contractor’s employees, and the entrepreneurship
required by article 1655 essentially with the direction and organisation of work. Thus, case
law concluded that subcontracting is lawful if know-how - namely, wealth of knowledge and
practices of uncommon use, not patented, deriving from experiences and trials – is involved
in the economic reality of the contract, playing a prominent role, adding something to the
professional skills of employees. In short, what really matters for this jurisprudence is the
existence of an added value which makes the subject of the contract different from the
contractor’s supply of a mere aggregate of work performances.
   The Biagi reform of 2003 moved definitely beyond the ban of fraudulent interposition
provided by article 1 paragraph 1, law no. 1369 of 1960: on the one side, replacing the former
rules on temporary agency work (articles 1-11, law no. 196 of 1997) with a brand new
regulation of agency work; on the other side, repealing law no. 1369 of 1960 and admitting
the use of subcontracting within certain limits (article 29, legislative decree no. 276 of 2003).
   This last provision represented a turning point because:
         • It specifies the requirements of subcontracting, already provided by article 1655
             of the civil code, differentiating it from agency work, and codifying the indicators
             of genuine subcontracting: business risk and organization of the means of
             production.




4 “It is forbidden for the entrepreneur to entrust his employees with piecework to be performed by workers
hired and paid directly by the former employees themselves. In case of violation of this prohibition, the
entrepreneur is directly responsible, towards the workers hired by his employee, of the obligations deriving
from the employment contracts they have entered into”.
5 “It is forbidden for the entrepreneur to contract out in any possible form, even to cooperative companies, the

execution of supply of workforce through the use of manpower hired and paid by the contractor or
intermediary, whatever the nature of the work or service to which the services refer”.
6 “Any form of contracting or subcontracting, also for the execution of works or services, where the contractor

uses capital, machinery and equipment supplied by the client, even if a fee is paid for their use, is considered a
subcontracting for the supply of workforce”.

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         • It codifies a “relativity criterion” according to which the lawfulness of the appalto
           contract should be evaluated on a case by case basis, considering the actual
           “requirements of the work and of the service considered in the contract”;
       • It acknowledges the case law guidelines based on former law no. 1369 of 1960,
           considering the interpretative issues concerning intra moenia (internal) outsourcing
           – characterised by physical proximity of the client and the contractor’ productive
           organisations, substantial integration in the client’s productive cycle of the result
           of the activity outsourced, objective difficulty in distinguishing this result from
           the overall result pursued by the contractor – and the issues regarding
           dematerialized (or light) subcontracting, where labour plays a major role
           compared to material assets.
  To sum up, outsourcing not matching the above-mentioned requirements is to be
considered as illicit supply of labour.


3.1. Typical requirements of the appalto contract.

    As discussed, lawfulness of subcontracting is subject to the existence of two requirements:
contractor’s business risk-bearing and autonomous organization of the means needed for the
execution of the contract.
    As for the first requirement, the appalto contract creates an obligation of result, which
should be granted by the contractor, even when he is not able to cover the costs with
revenues.
    With regard to the second requirement, article 29, paragraph 1 of the legislative decree
no. 276/2003, specifies that the organization of the means can also result from the exercise
of organizational and managerial powers over the workers employed in the framework of
the outsourced activity, taking into consideration the nature of work or service involved. The
legislator has here codified the case law elaboration according to which the material
component in labour intensive contracts can be disregarded.
    It competes to the contractor providing direction to his/her employees, without
interference from the client on the way the activity should be carried out.
    On the contrary, the use by contractor’s employees of tools which are the property of the
client is not in itself incompatible with genuine subcontracting, on condition that the
responsibility for their use remains totally on the contractor and that by the supply of these
means the business risk is not reversed, which must in any case be borne by the contractor
himself .
    The relativity of the considered law provisions (lawfulness of subcontracting “may also
result from”) and the functional criterion included (consideration for the “requirements of
the work and of the service provided in the contract”) put on to the judge the duty to
investigate the legitimacy of the contract, opening to possible interpretative oscillations.
    In other words, the execution of work and service should be organized and managed by
the contractor. This may result, on the one hand (especially for labour intensive activities),
by the fact that workers employed in the outsourcing are actually organized and directed by
the contractor and/or also from the ability of the contractor to achieve a productive result,


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autonomous and “separable” from that of the client; on the other hand, from the contractor’s
risk-bearing, related to the preparation, management and execution of the work or service.


3.2. Criteria and indicators of “genuine” subcontracting.

   Since there is a very real chance that an appalto contract may conceal illicit forms of labour
interposition, case law and administrative practice7 have identified some criteria and
indicators of “genuine” subcontracting. They provided, both under the provisions of the
former law no. 1369/1960, and current legislative decree no. 276/2003, symptoms on the
basis of which courts and administrative authorities can identify and sanction (illicit)
subcontracting.
   They can be summarised as follows:
   1) lack of contractor’s entrepreneurial features, that is to say entrepreneurial (technical
and economic) organization;
   2) exercise of direction power by the client;
   3) use of capital, machines and equipment supplied by the client;
   4) nature of the service performed, which is not related to the appalto contract, but the
same performed by client’s employees;
   5) fees based on the actual hours of work and not on the work or the service performed;
wage payed out directly by the client.


3.2.1. The lack of contractor’s entrepreneurial organization.

    Article 29 of the legislative decree no. 276/2003 allows subcontracting, aiming at the same
time at contrasting “ghost” subcontracting firms (knows as “teste di paglia”) created to cut
business costs, evading and circumventing obligations, such as wages, taxes and social
security contributions, through a fictious contract for activities or mainly for services.
    In this perspective, the lack of an autonomous functional and managerial organization is
an indicator, perhaps the main one, of an illicit interposition, namely a “non-genuine”
subcontracting.
    In order to observe a genuine subcontracting is necessary that the contracted activities are
performed by a firm which is formally and substantially an entrepreneur from the technical,
economic and organizational perspective.
    The evaluation of the effective existence of a genuine subcontracting firm, both under a
legal and a material perspective, should be done through the analysis and consultation of the
following business records:
    - registration at Chamber of Commerce (Camera di Commercio);
    - compulsory records and accounting documents;
    - ledger and inventory register, records of capital and profit elements;
    - warehouse logbooks;
    - register of depreciable assets;

7   Circ. Min. lav. n. 5/2011.

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    - financial statements, balance sheets, income statements and explanatory notes;
    - invoices and payments (F23 and F24).
    Further indicia assessing the lack of the organizational autonomy are:
    - lack of a significant experience in the subcontracting’ sector;
    - lack of any employment activity related to the one requested by the client;
    - absence of workers technically educated for the contracted activity.
    However, according to article 29 of the legislative decree no. 276/2003, a subcontracting
is genuine when the contractor substantially coordinate his employees, mainly applying their
know-how, specifically acquired or already possessed, without any physical means: the only
differentiation criterion is the sufficiency of the intangible assets used for the execution of
the contracted services. These apply to informatic and technological services in the first
place, but also to cleaning services, in their polyhedral and multiple manifestations, where
the explicit reference to the organization of the “necessary” means and the relation between
“necessity-sufficiency” are clear indicators of the literal transposition - by the Legislator – of
the progressive jurisprudence, more open to the post-industrial externalizations.


3.2.2. The exercise of managerial authority by the client.

    The exercise of the managerial power by the client, typically performed by the employer
and related to the substantial performance of the employment activity commissioned to the
alleged contractor, is another symptomatic element of an illicit interposition in the
employment of labour, as stated by articles 29 and 84 of the legislative decree no. 276/2003.
    Lower Courts and Supreme Court jurisprudence and administrative practice identified
symptomatic situations linked to this element:
    - the alleged contractor’s employees share a similar working time with the client’s ones,
without any particular difference;
    - the contractor’s employees report their absences from work to the client company;
    - the alleged brokered employees work under the direct control of client’s workers or
under their supervisors, without any previous agreement with the contractor;
    - the contractor imposes wage increases and manages holidays and leaves;
    - the client determines how to manage workers;
    - the client exercises his managerial, hierarchical and disciplinary power, even imposing
layoffs in the contractor’s premise.
    - the client company manages industrial relations regarding the alleged contractor’s
workers.
    - the workforce of the contracting firm is resized with regards to the possibility of
using in a stable manner the workers offered by the presumed contractor.
    In order to assess an illicit subcontracting, case law and legal scholarship consider
insufficient a technical direction of activities by the client or by any appointee. This has
nothing to do with the employer’s control power, namely the legal subordination of the
employee to the employer’s direction and disciplinary power.
    Furthermore, the managerial interference does not exist if the orders given by the client
are seen in the light of an essential functional coordination of contractors, with no


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implication on the effective primacy of the contractor’s managerial power; a situation that is
acceptable within the framework of a necessary harmonization of the different activities
involved, especially when the contracted service requires a complex entrepreneurial structure.
   Thus, the client’s control over the overall compliance of the contractor’s performance
with the appalto contract is compatible, alongside with the other requirements stated by the
law, with a genuine one. Likewise, an illicit interposition should be excluded if the client’s
instructions are addressed to the contractor, who subsequently gives orders to his employees.


3.2.3. The use of client’s capital, machineries and equipment.

    The repealed article 1, paragraph 3 of the law no. 1369/1960 contained an irreputable
presumption of illicit interposition, based on the idea that if a given entrepreneur outsources
the activity to another firm, notwithstanding the fact he had the means to execute the activity,
he was just trying to achieve results forbidden by the law.
    Nevertheless, legal scholarship and case law opted for a less strict application of this
provision: they supported the idea that it is not sufficient to determine an illicit interposition
a minimum allocation of financial resources and assets; on the contrary, they stressed the fact
that the relevance of the client’s contribution should be enough to marginalize the
contractor’s organizational involvement.
    This case-law elaboration seems to meet the need of some specific sectors, such as that
of “advanced service”, where the contracted service is performed by making use of the
client’s assets, having a high economic value.
    So, the case of a contractor that, to perform his autonomous activity, exploits client’s
equipment or involves predominantly capital and workforce, should not be seen as a
fraudulent interposition. In these cases, what is legally pivotal is the contractor’s management
and organization, that should be characterized by an autonomous entrepreneurial structure,
alongside with specialized workforce in a specific field developed during the business activity.
    There is no fraudulent interposition even when the raw materials, provided by the client
in order to guarantee the quality of the subcontracted activity, are transformed by the
contractor.
    Similarly, there is no fraudulent interposition when the contractor, performing the activity
(data mining, data bases creation), works directly on the client’s equipment and hardware,
with his own workforce and digital know-how (immaterial good).
    Based on what has been reported above, the adequacy, non-marginality and significance
of the subcontractor’s organizational contribution in terms of “necessary means” should be
evaluated case by case, examining the object and the substantial and intrinsic content of the
subcontracting. It should not be taken into consideration any contractual declaration of
intents, only driven to underline the availability of capitals, equipment and machineries
without their concrete use and their effective substitution with those belonging to the clients;
a different case from the one related to “immaterial subcontracting”, such as the one reported
above, that could justify a lower organizational contribution, attributed to the sole exercise
of the managerial power over the subcontracted workers.



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3.2.4. The nature of the work performed.

   A subcontracting should be assessed as a genuine one when:
   - the contracted activity is one of those typically performed by the contractor;
   - the work is temporary with a fixed duration;
   - there is no stable integration of contracted workers in the client’s organizational
context;
   - the activities performed by the contractor’s workers are different from the ones
carried out by client’s workforce;
   - the working activity performed by the workers involved in the contract is not linked
with the client’s corporate objectives.


3.2.5 The kind and the nature of the fees.

    Lastly, it is necessary to evaluate, as a possible element of an illicit interposition, the way
the subcontractor’s fees are calculated. This criterion is strictly connected with the business
risk requirement, as stated by article 29, paragraph 1 of the legislative decree np. 276/2003.
    Case-law clarified that a subcontracting is an illicit interposition when the contractor’s
entrepreneurial contribution is neglectable, such as in the case where the capitals involved
just cover wages or the overall labour costs, and contractor’s managerial and organizational
powers over the workers employed is lacking.
    This could be the case of fees paid by the client which are strictly linked to the costs
incurred by the alleged contractor, rather than being set in advance on the value of the result
to be achieved. This could be also the case of the client directly remunerating himself
subcontractor’s employees or that of the client calculating contractors’ fees on workers’
hourly wage, their social contributions and the costs related to the certification of the appalto
contract. It should also be considered as an illicit interposition of employment the situation
in which the client determines the fee basing it on the hours effectively worked or on the
number of working days.
    It is worth mentioning that the illicit interposition does not need an actual provision of
fees: it shall be punished even in case of a “free of charge interposition”, since articles 18 and
28 of the legislative decree no. 276/2003 are aimed at sanctioning the supply of a simple
aggregate of work performances.


3.3. Sanctioning regime.

   The sanctioning regime provided by the legislator is particularly articulated with different
levels of intervention.
   The lack of the requirements of genuine subcontracting leads to illicit labour hire supply,
sanctioned by the article 27, paragraph 3 bis of the legislative decree n. 276/2003 (introduced
by the legislative decree no. 251/2004), formerly sanctioned in a rather similar way by the
repealed article 27, paragraph 2. According to the mentioned provisions, the employment


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relationship is placed on the client. Payments made by the sham contractor shall not be
repeated.
    Differently from the former Law no. 1369/1960 (article 1, section 5), the placement of
the employment relation on the user undertaking is no more an automatic consequence of
the legislative provision. It takes place by an action brought by the worker against the user,
which effects are backdated to the beginning of subcontracting or, according to some
commentators, to the date of the labour court sentence.
    According to article 32, paragraph 4, law no. 183/2010, the worker shall denounce in
writing the sham outsourcing within 60 days, and bring a claim in Court within the following
180 days, according to article 413 Code of Civil Procedure.
    Furthermore, illicit subcontracting incurs in administrative sanctions.
    According to art. 1, section 1 of the legislative decree no. 8/2016, the illicit subcontracting
has been decriminalized and currently considered as an administrative offense, except where
child exploitation is involved. In this case the illicit subcontracting has, still, a criminal
relevance, and it is punished with the arrest up to 18 months and a pecuniary fine.
    The administrative sanction applied in the case of unlawful outsourcing, charged to the
sham contractor and the client, is up to 50 Euros for each worker employed and each day of
employment (minimum 5.000 Euros – maximum 50.000 Euros).
    The administrative sanction applied pursuant to art. 18 of the legislative decree no.
276/2003 excludes the application of the other sanctions for “black” work as well as the
administrative sanctions in relation to the obligations of establishment and management of
the employment relationship due its "traceability" and the related remuneration and social
security obligations, even if they relate to an employer who is not a factual services user.8
    As for the pay recovery deriving from the ascertainment of an illegal nature of
subcontracting, it should be noted that the establishment of the employment relationship
with the user - as mentioned - is not automatic, but requires the worker to request the
verification. Therefore, in default the exercise of judicial action pursuant to art. 414 of the
Italian Criminal Code, the formal notice can only be adopted against the alleged
subcontractor in relation to remuneration not correctly paid as it should be according to the
CCNL applied.
    As for the social security contributions recovery, social security relationship is indifferent
for the procedural choices made by the worker as it presupposes only the establishment of
an employment relationship, and is completely subtracted from the parties’ will. Therefore,
the recovery cannot be conditioned by the worker’s choice regarding the recognition of the
employment relationship with the user. As a result, the obligations of a public nature in the
field of social security, once it has been ascertained that the job had been rendered in favor
of the user, being latter recognised as a de facto employer, should be born entirely by the latter,
without prejudice to the payments already made by the alleged subcontractor. In any case,
the alleged subcontractor may be involved in social security contributions recovery in case
of the failure of the procedure against the user.
    Special attention deserves the case of crimes under art. 603 bis of the Italian Criminal
Code, concerning the exploitation of labour. This provision is aimed at the repression of the


8   Circ. Min. lav. n. 27/2014 e circ. INL n. 10/2018.

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Domenico Garofalo                                                                           Italian Labour Law e-Journal
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so-called "caporalato", especially in the construction and agro-industrial sector.9 It requires
generic fraud against those who recruit labour for the purpose of assigning it to the third
parties under the conditions of exploitation, taking advantage of their needy situation, and
those who use, hire and employ labour under the same conditions.
    Finally, art. 2, paragraph 1 bis of the law- decree no. 87/2018 (so-called Decreto Dignità)
has reintroduced with the art. 38 bis, legislative decree no. 81/2015, the crime of fraudulent
temporary work supply, already provided for by the art. 28 of the legislative decree no.
276/2003 and then repealed by the art. 55 of the legislative decree no. 81/2015. This occurs
in all the cases where "temporary work supply is carried out with the specific purpose of
circumventing mandatory legal provisions or collective agreement applied to the worker",
without prejudice to the application of the sanctions referred to in the art. 18, of the
legislative decree no. 276/2003, in the case of abusive staff leasing and its illegal use.
    The legislator configures a multi-subjective offense, of a contraventional and unitary
nature, which considers both the staffing agency and the user as two active subjects of the
only type of offense, responsible under the Criminal Code for a specific elusive conduct
deliberately carried out in violation of the existing legal norms.
    The multi-subjective nature of the crime covers all the actors involved in the staff leasing
activity. In this way both a subject exercising staff leasing without the required requisites
(absence of the prior ministerial authorization and the necessary registration in the Register)
and the agency formally authorized and registered as well as the user of the temporary
workers will be considered responsible for a committed crime.
    To be recognised as a crime, a specific intent and the awareness of the labour illegal use
the by the perpetrators of the offense is required, while the avoidance of the mandatory
provisions of the law or collective agreement applicable to the worker represents an objective
element. The contiguity of the crime of the fraudulent staff leasing with the phenomenon of
labour interposition poses the problem of the identification of the appropriate sanctioning
regime10.
    The Ministry of Labor, already in time of the application of the art. 28 of the legislative
decree no. 276/2003, considered the crime of fraudulent staff leasing applicable also in cases
of illicit subcontracting and therefore of temporary work supply in the absence of the
required requisites, which in itself constituted a symptomatic element of the fraudulent
purpose of circumventing "mandatory legal or collective agreement provisions applied to the
worker."11
    The crime of fraudulent staff leasing is not limited to the cases of illegal subcontracting
as it may also involve authorised temporary work agencies, or cases of workers posting in
violation of the art. 30 of the legislative decree no. 276/2003 as well as the cases of non-
genuine transnational workers posting pursuant to art. 3 of the legislative decree no.
136/2016.




9 Garofalo D., Il contrasto al fenomeno dello sfruttamento del lavoro (non solo in agricoltura), in Rivista di Diritto della
Sicurezza Sociale, 2018, n. 2, 229 ff.
10 See. circ. INL 3/2019.
11 See circ. Min. lav. 5/2011.



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    As for the sanctioning regime in the case of fraudulent staff leasing, a fine of 20 Euros is
envisaged for each worker involved for each day of use, with the proportional and
progressive application of the penalty.
    The offense ends by oblation, pursuant to art. 162 of the Criminal Code and is subject to
the mandatory prescription carried out by the labour inspectors (art. 15, Legislative Decree
no. 124/2004), which "minimum" contents is aimed at the interruption of the illegal staff
leasing carried out by the fraudulent subcontractor. Compliance with the mandatory
prescription determines the decriminalization of the crime and its extinction with
transformation into an administrative sanction, but only on condition that the user hires
illegally supplied workers. Consequently, in cases of illegal subcontracting or illegal posting,
the inspection staff should ascertain the violation of art. 18 Legislative Decree no. 276/2003
("without prejudice to the sanctions referred to in art. 18, Legislative Decree no. 276/2003")
and apply a mandatory prescription aimed at putting an end to the illegal conduct by means
of the hiring of the illegally supplied workers by the user for the entire duration of the
contract.
    Finally, it will be possible to adopt the provision of the formal notice, pursuant to art. 12
of the legislative decree no. 124/2004, towards the user on the basis of the CCNL applied
by the latter.
    The functions of judicial police, conferred by law to the inspection staff, allow the latter
to be able (perhaps obliged?) to order to the fraudulent user the immediate regularization
(hiring) of the illegally employed workers, highlighting that the same result could also derive
from the nullity of the temporary staff supply contract (as in fraudem legis), with the extension
of art. 38, paragraph 1, Legislative Decree no. 81/2015, which considers these workers to be
directly employed by the user.
    In case of staff leasing compliant with regulatory provisions, but where the fraudulent
intent is found, only art. 38-bis is applied.


3.4. Does the ban of fraudulent interposition still exist?

   The predominant opinion is in favour of the continued validity of the ban, deriving from
the art. 29 of the legislative decree no. 276/2003, which codifies the distinction between
subcontracting and staff leasing, and the sanctioning regime provided for in the paragraph
3-bis of the same provision in the case of a non-genuine subcontracting, as well as the
provision pursuant to art. 84, paragraph 2 of the legislative decree no. 276/2003
distinguishing between the "illegal interposition" and the "genuine subcontracting".12
   In fact, art. 84 provides for the adoption by the Ministry of Labor of the codes of good
practices and presumptive indices regarding illicit interposition and genuine subcontracting
taking into account rigorous verification of the real organization of the labour means and the
effective assumption by subcontractor of the entrepreneurial risks.




12Garofalo D., Il perdurante divieto di intermediazione, in Garofalo D. (ed.), Appalti e lavoro. Disciplina lavoristica,
Giappichelli, Torino, 2017, 3 ff.

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4. Joint and Several Liability

4.1. A Troubled Regulatory Framework

    With the dual purpose of preventing abuse and protecting the claims of workers employed
in subcontracting, articles 1676 c.c. and 29, paragraph 2, of Legislative Decree no. 276/2003,
provide a double guarantee13.
    The provision in the civil code grants workers the right to act directly against the client
company "to achieve what is due to them up to the amount of the debt that the client has
towards the contractor in the time in which they propose the claim". As a consequence of
such action, a joint and several obligations operates pursuant to article 1292 c.c. 14.
    The entitlement to bring proceedings is attributed only to the contractor's employees
(unlike article 29, paragraph 2, Legislative Decree No. 276/2003 - below) who have been
involved in the execution of the subcontracted work or service (a consolidated judicial strand
acknowledges the same entitlement also to the subcontractor's employees against the
contractor / sub-client, but not also towards the lead client).
    From an objective point of view, the protection concerns only pay claims, while other
kind of claims are excluded as well as, due to the consolidated standing of the Supreme Court,
the contractor's debts towards social security and insurance agencies.
    The application is not subject to forfeiture term, unlike the provisions of article 29,
paragraph 2, Legislative Decree no. 276/2003, and has the effect of making the contractor's
claim against the client unavailable, with the consequence that where the client proceeds to
satisfy the former, he is not released from the obligation towards the workers.
    The second guarantee, of joint and several liability, is regulated by article 29, paragraph 2,
Legislative Decree no. 276/2003. It operates as a means of interference with the use of
subcontracting, now "liberalized" in comparison to the abolished 1960 regime. Against this
guarantee, article 1676 c.c. has maintained a space of operation limited to public procurement
and subcontracting with public administrations, pursuant to article 1, paragraph 2, Legislative
Decree n. 165/2001 (the application of article 29, paragraph 2 to such situation is expressly
excluded), and with natural persons who do not carry out business or professional activities
(article 29, paragraph 3-ter), as well as for those workers who have allowed the expiry of the
forfeiture term to benefit from the regime pursuant to article 29, paragraph 2.
    The guarantee of joint and several liability, indeed, is not new since it was already
enshrined in Law n. 1369/1960, although only for to the so-called "internal" subcontracting
and with a forfeiture term of one year (articles 3-4-5). The novelty of the 2003 regulations
lies in the generalization of the guarantee and the doubling of the forfeiture term.
    The relevance of the provision for the outsourcing phenomenon helps to understand why
the legislative interventions have been reiterated any time the political landscape has changed,
which resulted in a complex regulatory framework not exempt from critical aspects.



13 Garofalo D., La responsabilità solidale, in Garofalo D. (ed.), Appalti e lavoro. Disciplina lavoristica, Giappichelli,
Torino, 2017, 119 ff.
14 V. App. Lecce – Section Lav., February 23, 2017, n. 527; in doctrine see Carabelli U., La responsabilità del datore

di lavoro nelle organizzazioni di impresa complesse, in Diritto delle Relazioni Industriali. 2009, 91 ff., § 3.

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   In the 2003 text, the provision stated that in the case of subcontracting, the client
company or employer was obliged jointly and severally with the contractor, within the limit
of one year from the termination of the contract, to pay workers the due remuneration and
social security contribution.
   Legislative Decree n. 251/2004 (art. 6, paragraph 1) amended the Legislative Decree n.
276/2003, and provided that, except for different provisions of the national collective labor
agreements stipulated by the comparatively most representative associations of employers
and by associations of workers, in the case of subcontracting for works or services, the client
company or employer is obliged jointly and severally within the limit of one year from the
termination of the contract, to pay workers the due remuneration and social security
contribution. Therefore, a double significant change was introduced, consisting, on the one
hand, in the derogation from the joint liability regime by national collective bargaining, and
on the other hand by the extension of the scope of the joint liability regime to all kind of
subcontracting (no longer only to those of services).
   Article 6, paragraph 2, Legislative Decree no. 251/2004 added to article 29 the paragraph
3-ter which, as already mentioned above, excludes clients who are natural persons and who
do not carry out entrepreneurial or professional activities from the scope of the joint and
several liability regimes.
   With a further intervention in 2006 (article 1, paragraph 911, Law 27 December 2006, n.
296) on the one hand, the joint and several liability was extended to “second-degree”
subcontracting, providing that in the case of works or services contracts the client company
or employer is jointly and severally liable with the principal contractor as well as with any of
the possible subcontractors; on the other hand, the forfeiture term has been doubled,
increasing it from one to two years.
   The 2006 regulation (paragraph 910) also added paragraph 3-bis to article 7, Legislative
Decree no. 626/1994, extending joint and several liability to damages for which the worker,
employee of the contractor or subcontractor, is not compensated by the national institute
for the insurance of occupational injuries (INAIL).
   In 2012, joint and several liability was extended to the severance pay (TFR) accrued during
the execution of the contract. With reference to the unfulfilled payments of social security
contributions and insurance premiums for period in which the contract was executed, any
obligation on the part of the client company for civil penalties is excluded, and it is charged
only on the person responsible for the non-compliance15.
   When converting into law the Law Decree n. 5/2012, the benefit of the pre-emptive
seizure of the contractor and any subcontractors’ assets has been introduced for the client16.
   We return to this topic on the occasion of the 2012 Fornero reform which (compared to
the 2004 formulation) makes the possibility of collective autonomy to exempt from the joint
and several liability regime conditional on the introduction of methods and procedures for
checking and verifying the overall compliance of contracts17.
   In 2013 joint and several liability was extended to remuneration and social security and
insurance obligations due to workers employed with a self-employment contract. The public

15 Reference is made to art. 21, paragraph 1, d. L. February 9, 2012, n. 5, converted to Law April 4, 2012, n. 35.
16 See art. 21, comma 1, Law Decree, 9 february 2012, n. 5, cit.
17 See art. 4, paragraph 31, lett. a) and b), l. June 28, 2012, n. 92.



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administration was expressly excluded from the scope of the regime. It should be noted that
any exceptions to the liability regime introduced by collective bargaining cannot concern
social security contributions and insurance premiums18.
   Furthermore, in 2014 it was established that the client who makes the payment of the
credits, must also fulfill the related tax obligations as withholding agent19.
   Finally, in 2017, in order to avoid a repeal referendum, the possibility of derogation by
collective bargaining as well as the benefit of the prior enforcement of the contractor's assets
have been suppressed20.


4.2. The Current Regulation of Joint and Several Liability.

    The joint and several liability remedial technique applies to all contractors (of works and
services) involved in the supply chain from which the credit claim originates, regardless of
whether the contract is "internal" (a necessary condition according to article 3 ln 1369/1960)
or "external".
    The client must be an entity who carries out an entrepreneurial or professional activity
("entrepreneur or employer"). The joint and several liability therefore rests on anyone who
qualifies as an entrepreneur, but also on employers who are not entrepreneurs as long as they
have an organization (e.g. ideologically oriented organizations) as well as professionals.
    About the categories of workers who are beneficiaries of the protection, since 2013, the
employees were also joined by the self-employed workers within the limits of the social
security and insurance payments and obligations imposed on the client, which restricts the
target to the quasi-subordinated employees (parasubordinati).
    In addition to remuneration and social security contributions, the emoluments covered
by the protection also include the severance pay and the insurance premiums, although
already before 2012 those protections where extended by means of interpretation (by the
jurisprudence for severance pay and by administrative practice for the insurance premiums).
    On the other hand, the payments due in terms of indemnity (e.g. indemnity for failure to
give notice) and reparation are excluded as article 29, paragraph 2, refers exclusively to
remuneration treatments. Likewise, as of 2012 the amounts due as civil penalties for the
contributory and insurance failures of the contractor remain excluded. This confirms that
the object of the joint and several obligation can only be the remuneration, contributions
and insurance premiums accrued in the period of execution of the contract.
    Therefore since 2012 it has become clear that joint and several liability covers only
workers concretely and directly employed in the performance of the contract, excluding
those whose activities are purely ancillary (e.g. administrative management of employees
assigned to perform the contract).
    Unlike the joint and several liability provided by article 2112 of the civil code in the
context of transfer of undertakings (cessione di azienda), which operates regardless of the
transferee being aware of the credit has at the time of the operation, in the event of

18 See art. 9, paragraph 1, d. L. June 28, 2013, n. 76, converted with modifications in l. August 9, 2013, n. 99.
19 See art. 28, paragraph 2, d. lgs. November 21, 2014, n. 175.
20 See art. 2, paragraph 1, lett. a) and b), d. L. March 17, 2017, n. 25, converted into l. April 20, 2017 n. 49.



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subcontracting the client is only liable for "known" credits. However, the client can accede
to the information written in the pay slips drawn up by the contractor, while he may be
unaware of workers' claims related to the performance of higher duties or overtime work.
This often causes collusive behaviors between the contractor and the worker to the detriment
of the client. Those collusibe behaviours can be countered only by charging the worker of
the burden to sue the contractor, so that he can verify and contrast the worker's claims. It is
not possible on the other hand to admit that the worker claims the responsibility of the
former after a trial concluded in the absence of any defensive activity.
   Important in matters of joint and several liability is the discipline of the forfeiture term,
originally set for one year and then extended to two years from the termination of the
contract. The term is to be understood as the effective date of cessation of the activity, hence
neither the date indicated in the contract, nor that of issuance of the last invoice, pursuant
to article 1, paragraph 911, Law n. 296/2006.
   The identification of the dies a quo in the case of subcontracting or multiple subcontracting
can be more difficult, as it may be referred either to the subcontractor whom the worker is
employed with, or to the contract from which the subcontracting originates21.
   Doubts persist on the possibility that the forfeiture is also prevented by means of an out-
of-court act, given that this hypothesis must be expressly provided for by law. Failing this
condition, it will be necessary to resort to judicial action22.
   There has been much discussion about the applicability of the forfeiture term also to
social security and insurance agencies. The Supreme Court excluded this option while Law
n. n. 1369/1960 was in force, but also with reference to current regulations23, considering
that the two-year term works exclusively for the worker, and not also for social security
bodies, as the latter as deemed to be subject only to the five-year limitation period24, on the
basis of various arguments.
   In the first place, the employment relationship and the social security relationship, insofar
as they are connected, are distinct from each other, given that the contributory obligation
towards the National institute for social security (INPS), unlike the remuneration obligation,
stems from the law, has a public nature and is therefore undisposable. In fact, the object of
the contribution obligation coincides with the minimum contribution structured by law in
an imperative way, with the effect that the application of the forfeiture term would be in
contrast with this regulatory framework. Furthermore, it is argued, it is not acceptable that
upon payment of the remuneration following the action promptly filed by the worker, the
fulfillment of the contribution obligation cannot follow only because the social security

21 See question Min. Work prot. 37/0007140 of 13 April 2013, according to which the deadline can only start
from the date of termination of the subcontracting, since a different interpretation would mean, especially in
the case of long-term contracts, that the client remains tied to all subcontracting companies (also those that
have ceased their contracted activity for many years) until the end of the contract, aiming for the rule to set a
time limit aimed at ensuring the certainty of legal relationships.
22 Izzi D., Appalti e responsabilità solidale, in Aimo M., Izzi D. (eds.), Esternalizzazioni e tutela dei lavoratori, Utet,

Torino, 2014, 52 ff., 87.
23 See Cass., Section lav. January 17, 2007, n. 996, in Lavoro nella Giurisprudenza 2007, 571, ff., as well as Cass.

March 20, 2014, n. 6532 in Diritto e Giustizia. Contra, in the sense of considering the expiry date applicable to
social security / insurance bodies, Trib. Milan, 19 March 2015, no. 204, in Lavorofisco.it. For administrative
practice see Circ. Min. Work n. 5/2011; ruling Min. n. 29/2015; INL note 19 November 2019, no. 9943.
24 Cass. no. 22110/2019, 18004/2019 and 29618/2019, the latter commented by Capurso P., L’appalto e le tre

obbligazioni solidali, in Rivista di Diritto della Sicurezza Sociale, 2020, 227 ff.

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institution has not acted on its claim within two years from the termination of the contract,
with a consequent breach of the insurance protection of the worker.
    Finally, the contribution claim is aimed at satisfying an indirect interest of the worker
which is also a direct interest by the community to finance the social security system.
    Therefore the INL (italian labour inspectorate) invites its peripheral structures, for the
purpose of the correct performance of the inspection activity, to ensure the maximum
timeliness in the transmission of the inspection reports to the INPS, in order to allow the
activation of the recovery procedures within the terms prudently suitable to guarantee their
success.
    The involvement of multiple actors, underlying the joint and several liability, requires a
reflection on the necessary litigation consortium and on the benefit of the contractor's pre-
emptive seizure.
    Before 2012, workers could take legal action directly against the client. Vice versa with
the Fornero law, the effectiveness of joint and several liability was subject to the fact that the
worker also sued the contractor and each subcontractor, in order to avoid excessive exposure
of the lead client (usually with high solvency).
    However for a part of the doctrine the necessary litigation consortium on the one hand
loosens the client’s accountability for the choice of contractors, on the other it excessively
burdens the worker by forcing him to sue all the co-obliged actors and to bear the costs of
long, and sometimes unsuccessful, executive procedures if the client had availed himself of
the benefit of the pre-emptive seizure25.
    Another part of the doctrine has positively assessed the intervention of 2012 from the
triple point of view a) of the simplification and clarification of the discipline, b) of the greater
accountability placed on the employer / contractor c) of overcoming the difficulties that the
client would meet in defense of his position if he were the only defendant in court, because
of his extraneity to the employment relationships established by contractors and
subcontractors.
    On the procedural level, the effect of the failure to summon the contractor and
subcontractors together with the client, caused in the first instance the application of article
102 of the civil procedural code with the consequent integration of the trial; in the second
instance, the nullity of the ruling resulting in the remittance of the case to the first judge.
    The necessary litigation consortium, with the related negative effects on workers and
social security agencies, was accompanied by the introduction of the benefit of the pre-
emptive seizure of the contractor's (and of the possible subcontractor’s) assets that could be
claimed by the client in the first defense. In this case, the executive action could be brought
by the worker against the client only after the unsuccessful enforcement of the assets of the
contractor and subcontractors.
    Article 2, Law Decree n. 25/2017, converted into Law n. 49/2017, in order to avoid the
referendum initiative promoted by the CGIL (Italian General Work Confederation),
expunged from article 29 both the rule on the necessary litigation consortium and the benefit
of pre-emptive seizure and the one which allowed the collective bargaining exemption from
joint and several liability, which fueled a very tight policy debate, as evidenced by the

25In this sense, Bizzarro C., Le misure di contrasto al lavoro «nero» tra nuovo regime degli appalti e procedure di certificazione,
in Diritto delle Relazioni Industriali, 2007, n. 2, 519.

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tormented regulatory path that accompanied it: introduced with the legislative decree n.
251/2004, then repealed by Law n. 296/2006, reintroduced with article 4, paragraph 31, Law
n. 92/2012 and definitively canceled (for now) by article 2, lett. o. Law. n. 25/2017. At the
bottom of this legislative twist lie politically antithetical regulatory choices.
   In fact, the 2004 provisions, which gave a real blank delegation to the national collective
bargaining stipulated by the comparatively most representative organizations of employers
and workers, were repealed in 2006 and reinstated in 2012, however, making the derogation
subject to the identification, in authorized collective agreements, of "methods and
procedures for checking and verifying the overall compliance of the contracts".
   This is a model inspired by the due diligence schemes, based on the selection, by the social
partners, of suitable behaviors to qualify the conduct of the client / jointly and severally liable
subject as "diligent". Such mechanism entails an exemption from liability for unlawful
behavior of other subjects with whom the client has entertained a business relationship if his
action has been in compliance with what was established in collective agreements26.
   The reference to collective bargaining, in the presence of two or more economic actors,
posed the issue of the applicable national collective agreement, that is, whether it should be
that of the client or that of the contractor.
   The prevailing doctrine was oriented towards the qualification of the collective contract
applicable in the contracting company’s sector, given that its employees are subject to the
effects of the derogation27.
   The scant catalogue of collective agreement provisions shows two intervention patterns.
   The first is limited to the provision of general clauses that charge on the client companies
the duty to demand from the contractors the application of the sectoral agreement as well as
the obligation to carry out checks (without specifying the nature and methods thereof), to
ascertain the business partner’s compliance with the legal and contractual regulations28. It is
required to acknowledge the aforementioned obligations by inserting specific clauses in the
contracts, with the possibility of automatic termination of the contract in the event of failure.
   In the second case, the contractual provisions, in addition to the general clauses, regulate
the matter into more detail, thereby listing the client's methods, procedures and control
instruments to ascertain the contractor’s compliance with the obligations towards workers
and social security institutions29.
       The elimination, in 2007, of the derogation power by collective bargaining30 could
reinvigorate the “proximity contract” instrument which, however, is subject to conditions

26 See Assologistica national collective bargaining agreement of January 26, 2011, which provided for preventive
control mechanisms at the signing of the contract, as well as monitoring during the execution, based on
documentary checks certifying compliance with all legal obligations, including those relating to the payment of
withholding tax and social security contributions, insurance premiums, payment of wages, regularity of workers
employed in the contract.
27 See Gamberini G., Venturi D., La responsabilità solidale nel settore dei trasporti: commento alla circolare del Ministero del

lavoro n. 17/2012, in Diritto delle Relazioni Industriali, 2012, 859 ff.
28 See Metalworking and plant installation SMEs National Collective Bargaining Agreement.
29 See Mobility / contractual area of railway activities National Collective Bargaining Agreement; Car rental and

garages National Collective Bargaining Agreement; Telecommunications national collective bargaining
agreement; Tourism CNAI National Collective Bargaining Agreement; Trade up to 14 employees National
Collective Bargaining Agreement; Freight Transport and Logistics National Collective Bargaining Agreement.
30 See question Min. Work 5/2018 which, on the regulation of the effects of the repeal of the derogation also in

light of the principle of non-retroactivity, specifies that the new rule operates with respect to the new collective
agreements, precluding for the future the possibility of inserting contract verification procedures in derogation

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and functional constraints, having to be aimed at the goals indicated in paragraph 1 of article
8, Law n. 148/2011.
         The law governing joint and several liability for differential damage has a different
scope (article 26, paragraph 4, Legislative Decree no. 81/2008), providing joint and several
liability of the client with the contractor and with each of the possible subcontractors for
damages suffered by employees of the foster companies, not compensated by INAIL or by
the equivalent agency for the maritime sector (IPSEMA)31.
    This provision applies only to subcontracting and not also to staff leasing and concerns
only entrepreneur clients, excluding public law bodies and those that do not carry out an
economic activity.
    The tax levy has also recently been brought into the joint and several liability scheme.
Indeed, a joint and several liability regime in tax matters was provided for by article 35,
paragraph 28 et seq., of the Law Decree n. 223/2006, converted into Law 248/2006 (so-
called Bersani Decree), which introduced a joint and several liability rule between the contractor
and subcontractor concerning the payment of tax deductions on employee income, as well
as social security contributions and insurance premiums for work accidents relating to
employees of the subcontractor. This provision was repealed in 201432 but, unaware of the
arrival of the pandemic from Covid-19, has been reintroduced, with significant differences
starting from 202033.
    The obligation arises with reference to the deductions made from January 2020 (and
therefore on payments made in February 2020), with regard to subcontracting or sub-
subcontracting34.
    Obliged clients are public administrations, businesses and commercial companies, natural
persons who exercise deeds and professions, resident in Italy for taxation purposes.
    There are different conditions for joint and several liability to operate.
    Firstly, the awarding of one or more works or services must have a total annual amount
of more than € 200,000 (if the contracting company has multiple of such contracts, to
ascertain whether it exceeds the € 200,000 threshold the overall value of the contracts relating
to the reference year must be calculated). The relevant contracts are procurement,
subcontracting, entrust to consortia, as well as other contractual relationships, however
named (but with the exception of self-employment contracts as defined in article 2222 of the
Civil Code), characterized by the prevalent use of labor (labor intensive) at the client's
business premises, with the use of capital goods owned by the latter or referrable to him in
any form.



from the solidarity regime. With regard to collective agreements that are valid as of 17 March 2017, the
exceptions cannot be applied to subcontracting signed after that date. The contractual provision can only be
applied to credits accrued during the period preceding the entry into force of the d. L. n. 25/2017.
31 With circ. Min. Work n. 5/2011, the expression "damages for which the worker (...) is not compensated" has

been interpreted, referring to damages resulting from injuries of lesser amount than those eligible for
compensation or higher (so-called differential damage) than the maximum amount recognized by the institutes
insurers.
32 See art. 28, paragraph 1, d. lgs. November 21, 2014, n. 175.
33 See art. 4, d. L. n. 124/2019, converted into l. n. 157/2019 (tax decree 2020), which inserted art. 17 bis in

Legislative Decree no. 241/1997.
34 Ris. AE n. 108/E/2019.



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    In addition, the clients are bound to request the companies in the supply chain (which are
obliged to release them) copies of the proxies for the payment of the personal income tax
(including the additional fares established at the municipal and regional levels) relating to the
workers directly employed in the execution of the work and the service.
    The payment is made by the companies in the supply chain (contractors, subcontractors)
with separate formalities for each client.
    As for the procedural profile, it should be noted that at least 5 working days before the
monthly deadline, subcontracting and contracting companies must pay the amounts due to
the Treasury on a specific bank or post office account communicated by the client.
    The client who received the amounts necessary for the payment, makes the payment
(usually by the 16th of the following month) but cannot use those sums as compensation.
    Within 5 working days pursuant to the expiry of the deadline for the payment, the
contracting company must also transmit to the client, and for the subcontracting companies,
also to the contracting company: the payment proxies relating to the payment of the tax
deductions of the workers directly employed in the execution of the work and service; a name
list of all the workers employed in the previous month directly for the execution of works
and services entrusted by the client, with indication of the tax code as well as with the detail,
for the reference month, of the hours worked by each worker for the execution of the
contract. If the worker in the reference month has operated on different contracts, the
employer will have to communicate only the hours worked for each client. In addition, he
must report the amount of remuneration paid to the employee for the service and the detail
of the tax deductions made in the previous month for this worker, with a separate indication
of those relating to the service entrusted to the client.
    In the event that the contracting company does not comply with the obligation to transmit
to the client the payment proxies and the information relating to the workers employed, or
the payment of the tax deductions is omitted or insufficient in the light of the the provided
documentation, the client has to suspend, as long as the non-compliance persists, the
payment of the compensation due to the contracting company, up to 20% of the overall
worth of the work or service or for an amount equal to the tax deductions not paid in the
light of the provided documentation. In addition, the client must notify within 90 days the
Revenue Agency, whereas the contractor will be prevented from any executive action against
the client until the payment of the deduction has been made.
    If the client pays the compensation to the contractor lacking any communication from
the latter of the payment proxies or any information regarding the workers employed in the
contract, or despite having ascertained the omitted or insufficient payment of the tax
deductions, he will be obliged to pay an amount equal to the sanction imposed on the
contractor for the violation of the obligations of correct determination and payment of the
deduction, as well as of timely payment, without the possibility of compensation.
    The procedure illustrated above does not apply if the contracting company (or
subcontractor) communicates to the client, enclosing a certification by the Revenue Agency
effective for the 4 months following the date of issue, the existence of a series of conditions,
on the last day of the month prior to the deadline for notification of payment35.

35The contracting company must have been in business for at least 3 years (therefore those entrepreneurs who
"born and die" specifically within this period, as often happens, are excluded) and must have performed during

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   If the certification just mentioned is missing, contracting or subcontracting companies
will be prevented from availing themselves of the compensation as a method for
extinguishing the obligations relating to social security and welfare contributions and
mandatory insurance premiums, with reference to the employees who have been employed
for the execution of the contract.


5. Transportation contracts, shipping contracts and subcontracting of transportation
services.

    The interest for the transportation contract (contratto di trasporto), governed by article 1678
of the Italian Civil Code, stems from the growing spread of commercial practices that
integrate the typical contractual content (i.e. the transportation) with additional or
instrumental services usually provided for by the carrier: boarding and landing of passengers,
loading and unloading of goods, supply of food and accommodation, handling of luggage
and the like.
    Although these services sometimes correspond to the content of other typical or atypical
contracts, they do not present an autonomous contractual meaning. In fact, they have an
ancillary or instrumental character which binds them to the scheme of the transportation
contract by virtue of the absorption principle.
    Similar or complementary to the main model are other contractual schemes such as
shipping (spedizione), subcontracting of transportation services (appalto di servizi di trasporto),
contracts for logistics and sub-transportation operations, rental (noleggio), travel or tourist
cruise contracts, etc .
    The subcontracting of transportation services, introduced by article 6 of the Royal Law
Decree n. 1924/1937, was characterized by the existence of an organization administered by
the carrier for the execution of the contract. The existence of such organization could be
inferred from a set of presumptive indicators, like: the provision of services in a multiple and
systematic manner, the stipulation of a single compensation, the bearing of economic risks
by the carrier itself.
    At the same time, in case the parties had agreed on a continuous series of transport
services to be performed over a certain period of time, at a short distance from each other,
all concerning the same object, the rules on subcontracting were deemed to be applicable
(prevalence theory).
    At a later stage, a growing consensus was reached on the existence of an atypical “mixed”
contract, encompassing elements of subcontracting and transportation contracts alike. As a
result, the provisions on each contract were deemed to be applicable depending on the actual



the tax periods to which the declarations refer of the income presented in the last three years, total payments
to the tax account of not less than 10% with respect to the amount of the declared revenues or fees. In addition,
they must be in compliance with the declaratory obligations and must not have role registrations or executive
assessments or debit notices entrusted to collection agents relating to IRPEF, IRAP, withholdings and social
security contributions for amounts exceeding € 50,000 for which the payment terms have expired and payments
are still due or no suspension measures are in place. This does not apply to the sums subject to installment
plans for which lapse has not occurred.

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linkage between every single element of the contractual relationship and the service to be
performed, in accordance with an “intermediate category” approach (tertium genus).
    At a closer look, the difference between the subcontracting of transportation services and
transportation contract consist in the fact that, in the former, a contractor undertakes to
fulfill a work or a service for a client against payment, by means of an entrepreneurial
organization of its own, for which it bears the business risk. On the other hand, in a
transportation contract a carrier undertakes the obligation to transfer persons or goods from
one place to another, through its own organization of means and personal activities and with
the assumption of the risk for the transport and its technical management.
    Distinct from the case examined above is the handling/delivery contract (contratto di
distribuzione). Its distinctive feature is the existence of a set of activities performed by the
carrier in addition to the transportation. Such additional and complementary activities bear
the same value as the transportation under the scheme of this contract and form part of the
main service, whereas the merely preparatory ones are excluded.
    Therefore, the difference between the two schemes stands in the ordinary vs.
extraordinary nature of the activities brought into the contract along with the principal
obligation.
    Mere ordinary activities, such as the accommodation of the shipment on board, the
deployment of goods by place of destination, the filling of transport documents, should be
brought back to the transportation contract. Vice versa, in the event that extraordinary
activities are provided for, such as storage, cataloguing of goods, handling of goods on the
warehouse’s premises, promotion, sale, marketing of the transported products, a complex
pattern would emerge that can be qualified as subcontracting of transportation services.
    The two schemes have several elements in common (organization of means, allocation of
risk, responsibility for the direction of the activities) that make the classification of each
contractual relationship, and thus the identification of the applicable provisions, particularly
problematic. For instance, article 29, paragraph 2, of the Legislative Decree n. 276/03, which
mandates the joint and several liability of client and contractor, is applicable in case of a
subcontracting, whereas a different regime of joint liability is in force for transportation
contracts. In fact, Law n. 190/2014 (article 1, paragraphs 247-248), amending article 83-bis
of the Law Decree n. 112/2008, has put in charge of the client a joint and several liability
with the carrier and with each sub-carrier for the credits to be paid to the workers under the
transportation contract.
    In the transportation contract, the client or the carrier that do not check the regular
payment of social contributions by the carrier or the sub-carrier remains jointly and severally
liable with the carrier, as well as with each of the sub-carriers, for the payment of wages to
the workers as well as for the payment of contributions and insurance premiums to the
competent bodies, within the limit of one year since the termination of the transportation
contract. Such liability shall not exceed the amounts paid for the services received during the
execution of the transportation contract.
    However, the joint liability regime does not apply to the administrative sanctions, which
are charged only on the subject responsible for non-compliance.
    The client is jointly and severally liable only in the event of non-compliance with the
obligations charged upon him prior to the stipulation of the transportation contract. If such


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obligations are duly fulfilled the joint liability regime does not operate, unless the client fails
to check the documentation which demonstrates that the carrier and the sub-carriers pay
wages and social contributions for their employees on a regular basis. This check must be
carried out before the signature of the contract. For this purpose the client can obtain a
certificate issued by the social security agencies, showing that the company has complied
with its insurance and social security obligations. Such bureaucratic operation will cease to
be necessary by the time that access to a specific section of the web portal of the Central
Committee for the register of natural and legal persons who carry out the transportation of
goods for third parties will be made possible.
    Unlike under the regime of article 29, paragraph 2 of the Legislative Decree n. 276/03, in
this case the client may also be a government body or another agency of the public
administration.
    The term for activating this protection is one year from the termination of the
transportation contract (and not two years, as in article 29, paragraph 2);
    Self-employed and quasi-subordinate workers (parasubordinati) are exempted from this
form of liability.
    There are no procedural provisions that allow for a pre-emptive seizure of the defaulting
carrier’s assets (the beneficium excussionis has also ceased to operate under article 29, paragraph
2).
    The Law n. 190/2014 provides that in the absence of a written contract or in the event
the client fails to ascertain the subcontractors’ compliance, either through a direct access to
the web portal of the Central Committee or, pending its activation, through the acquisition
of the single tax and wage compliance certificate (Documento Unico di Regolarità Contributiva -
DURC), he will not only be considered as jointly and severally liable. The client shall also
bear the costs incurred by the carrier for the infringement of his tax obligations and for any
breach of the traffic laws committed while carrying out the transportation service performed
on behalf of the client.
    Collective agreements at the sectoral and company (proximity bargaining) levels are
prevented from derogating the joint and severe liability rule in transportation services, even
for the sole wage-related aspects.


6. Outsourcing.

    Special attention should be paid to the contract of outsourcing regulated by law no.
192/1998 which may regard either a manufacturing process or a product.
    In the former case an entrepreneur (subcontractor) commits himself on behalf of the
client/user company to carry out work using semi-finished products or raw materials
supplied by the client.
    Contrary, in the latter case of product outsourcing, the subcontractor undertakes to
provide products or services intended to be incorporated or used in the client's activity, in
accordance with executive projects, technical and technological knowledge, models and
prototypes, provided by the client company ("technical specifications").



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   The outsourcing contract, therefore, presupposes relationships characterized by the
design and technical subalternity of the outsourcer and therefore a technological subjection
with respect to the client, which takes the form of transferring to the latter of so-called know
how intended as the entire knowledge on how to produce a certain good or service.
   Two theories have been advanced in relation to the qualification of the outsourcing
contract.
   According to a first theory, it would not be possible to qualify outsourcing under the law
no. 192/1998 as a different and alien contractual type compared to the subcontracting
contracts (or sales or temporary work supply/ staff leasing), opting for the existence of a
relationship of species a genus, in the sense that outsourcing constitutes a "subtype", if not
equivalent, of the subcontracting, or a general protection scheme which may include multiple
negotiating figures including the subcontract.
   According to the other theory, the outsourcing contract, under the law no. 192/1998,
would represent an autonomous and distinct contractual type if compared to the
subcontracting due to specific substantial differences which must be identified, as regards
the former, in direct and integral control over the execution of the works by the client
(technological dependence) in relation to the transfer of know-how or all the knowledge
necessary for the production of a specific good or service; this is contrary to what happens
in the subcontracting which essential and characterizing element is the executive and
managerial autonomy of the subcontractor by virtue of a contractual obligation of the supply
of the final result which implies the only downstream client’s control over the execution of
the work or service.


6.1. Joint and several liability in case of outsourcing.

    The qualification issue is very important as it determines the kind of protection applied
the workers employed under outsourcing contract. If the latter is considered to be an
independent contract respect to the subcontracting, pursuant to art. 29, paragraph 2, the
principle of joint and several liability could not be applied.
    The Constitutional Court intervened on this issue with the interpretative rejection
sentence no. 254/2017, following a referral judgment and a question of constitutional
legitimacy raised by the Venice Court of Appeal (ord. of 13 July 2016) on art. 29, paragraph
2, Legislative Decree no. 276/2003, providing joint and several liability only for the case of
the subcontracting, but not for similar contracts (in the specific case of outsourcing referred
to in Law 192/1998), hoping for its extensive application in favor of workers different from
the subcontractor’s employees, but who may be qualified as indirect workers.
    The Constitutional Court has excluded an unconstitutional nature of the joint and several
liability provision reasoning that since its purpose is to prevent that decentralization and
dissociation between the holder of the employment contract and the user of the service
would damage the workers involved in the contract execution, the effects of the provision
could be extended also to the outsourcing not only because of the assimilation of this
contract to subcontracting, but also by virtue of the art. 3 of the Constitution, and thus the
worker’s protection must be extended to all levels of decentralization.


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   This "constitutionally oriented" reading was followed by the administrative practice which
a few years earlier supported the extension of joint and several liability also for the cases
outsourcing where forms of direct and integral control over the execution of the works by
the client were manifested36, assuming the existence of joint and several liability also in the
relations between the subcontracting consortium and the associated consortium companies,
in order to ensure substantive guarantee of the joint and several liability regime in spite of
the formally attributed to the legal transaction name37.
   Therefore, administrative practice, referring to the clarification provided by the
Constitutional Court, considers that, unless there is a specific discipline, as in the case of the
transport or temporary agency work supply contract, joint and several liability should be
applied in all the cases of decentralization, including workers posting pursuant to art. 30 of
the Legislative Decree no. 276/200338.




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Copyright © 2020 Domenico Garofalo. This article is released under a Creative Commons
Attribution 4.0 International License.

36 See Circ. INL n. 6/2018, and the Labour Ministry note no. 5508/2012.
37 See Interpello Min. lav. no. 2/2012.
38 See Circ. INL n. 6/2018 in this sense, even before Constitutional Court intervention, Carinci M.T., Processi di

ricomposizione e di scomposizione dell’organizzazione: verso un datore di lavoro “à la carte”?, in Giornale di Diritto del Lavoro
e delle Relazioni Industriali, 2016, 733 ff., 739, n. (17).

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