Employment issues in M&A transactions in Italy

• works councils exist (these can be set up at companies with over 15 employees in each production unit);
• a collective bargaining agreement has been concluded, and if so whether it contains specific requirements towards trade unions related to a transaction (such requirements, where proven, always refer to the eventual involvement of the trade union once the share deal has been realised);
• a European works council has been established.

In the case of share deals, there is requirement to inform or involve the trade union before the decision has been taken in Italy. Since the share deal does not cause any change in the legal person holding the assets (the company retains its legal status), the completion of the decision-making procedure does not depend upon the involvement of the trade union.

Once the decision has been taken and the share deal finalised, the trade union may need to be involved if this is provided for in the applied collective bargaining agreement.

• the works council(s) of both purchaser and target, if laid down in the applied collective bargaining agreement.

• the works councils, checking whether the share deal concluded has had any repercussions on the working conditions of staff.
• trade unions, should the initial consultation with the works council show that the share deal has had repercussions on the working conditions of staff.

• Once the consultation with the trade union has been terminated, decisions taken in relation to staff may be applied, even if an agreement has not yet been reached with the trade union.

• works councils exist (these may be set up at companies with over 15 employees in each production unit);
• a collective bargaining agreement has been concluded, and if so whether it contains specific requirements towards trade unions related to a transaction (where proven, such requirements always refer to the eventual involvement of the trade union after the share deal has been realised);
• a European works council has been established.

In the case of share deals, there is no requirement to inform or involve the trade union before the decision has been taken in Italy. Since the share deal does not cause any change in the legal person holding the assets (the company retains its legal status), the completion of the decision-making procedure does not depend upon the involvement of the trade union.

Once the decision has been taken and the share deal finalised, the trade union may need to be involved if this is provided for in the applied collective bargaining agreement.

• the works council(s) of both purchaser and target, if laid down in the applied collective bargaining agreement.

• the works councils, checking whether the share deal concluded has had any repercussions on the working conditions of staff.
• trade unions, should the initial consultation with the works council show that the share deal has had repercussions on the working conditions of staff.

• Once the consultation with the trade union has been terminated,  any decisions taken relating to staff may be applied, even if agreement has not yet been reached with the trade union

• the asset deal qualifies as a transfer of undertakings according to Article 2112, Paragraph 5 of the Italian Civil Code;
• works councils exist (these can be set up at companies with over 15 employees in each production unit);
• a collective bargaining agreement applies;
• trade unions are involved (this is mandatory if the company employs more than 15 employees).

• a communication for works councils, including: (I) a fixed or proposed date for the merger; (II) the reasons for the contemplated decision; (III) the legal, economic and social consequences for employees; and (IV) details of any measures being taken to repair these consequences (usually a social plan) at least 25 days before the contract finalisation (with its entry into the Companies Register) or before a binding agreement has been reached between the parties (with the merger agreement not yet entered into the Companies Register);
• communication for trade unions, including: (I) a fixed or proposed date for the merger; (II) the reasons for the contemplated decision; (III) the legal, economic and social consequences for employees; and (IV) any measures being taken to repair the consequences (usually a social plan) at least 25 days before the contract finalisation (with its entry into the Companies Register) or before a binding agreement has been reached between the parties (with the merger agreement not yet entered into the Companies Register).

• works councils – if the company employs more than 15 employees in total, the works councils, if such bodies exist, must be notified of the asset deal decision in writing.
• trade unions – if the company employ more than 15 employees in total, trade unions which have signed the applicable national collective bargaining agreement must be notified of the asset deal decision in writing. If works councils do not exist at the company, the national trade unions with the strongest representation at the company must be notified of the decision.

• the works council at least once.
• the trade unions.

• the decision to transfer assets. After the transaction, the seller and purchaser remain jointly liable for any obligations of the seller towards the employees which existed prior to the transaction.

• works councils exist (these can be set up at companies with over 15 employees in each production unit);
• a collective bargaining agreement applies;
• trade unions are involved (this is mandatory if the company employs more than 15 employees).

• a communication for works councils, including: (I) a fixed or proposed date for the merger; (II) the reasons for the contemplated decision; (III) the legal, economic and social consequences for employees; and (IV) details of any measures being taken to repair these consequences (usually a social plan) at least 25 days before the contract finalisation (with its entry into the Companies Register) or before a binding agreement has been reached between the parties (with the merger agreement not yet entered into the Companies Register);
• communication for trade unions, including: (I) a fixed or proposed date for the merger; (II) the reasons for the contemplated decision; (III) the legal, economic and social consequences for employees; and (IV) any measures being taken to repair the consequences (usually a social plan) at least 25 days before the contract finalisation (with its entry into the Companies Register) or before a binding agreement has been reached between the parties (with the merger agreement not yet entered into the Companies Register).

• works councils – if the company employs more than 15 employees in total, then works councils, if such bodies exist, must be notified of the asset deal decision in writing.
• trade unions – if the company employs more than 15 employees in total, then trade unions which have signed the applicable national collective bargaining agreement must be notified of the asset deal decision in writing. If works councils do not exist at the company, then the national trade unions with the strongest representation at the company must be notified of the decision.

• the works council at least once;
• the trade union.

• the decision to transfer assets. After the transaction, the seller and purchaser remain jointly liable for any obligations of the seller towards employees which existed prior to the transaction.

Italian employment law equates a merger to a transfer of undertakings. For further details, see Section B., ‘Asset Deal’.