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Italy: Work-related receivables: the Italian Supreme Court clarifies, once and for all, the commencement of the statute of limitations

In the case at stake, some employees – upon termination of their employment relationships – filed a judicial complaint to obtain payment of nighttime overtime.

The Court of the second instance, however, partially upheld such claim. It deemed that the amounts concerning periods prior to five years from the introduction of the legal proceeding were expired, establishing that the limitation period runs during the interested relationships.

The Italian Supreme Court reversed such previous judgment. It established that the modifications introduced by Fornero Law (Law 92/2012) effective from July 18, 2012 and the Jobs Act (Legislative Decree 23/2015) have relegated the so-called “real protection” – which entails the reinstatement of the dismissed employees – to limited scenarios. In absence of such protection for all kind of wrongful terminations, it has been feared that the employees could be discouraged to advance their claims while the employment contract is in force, worrying about their jobs. Consequently, the Court ruled that the statute of limitations for claims not yet expired on July 18, 2012 (date of entry into force of Fornero Law) shall commence only upon the termination of the employment relationship.

The statute of limitations for employment-related receivables is normally five years.

This means that, as of today, the employer is exposed to possible claims for pay claims relating to the period up to 18 July 2007 by employee: (i) whose employment has not yet terminated; or (ii) whose employment has terminated in the last 5 years.

Author: Angelo Zambelli

Angelo Zambelli
Phone   +39 02 02030830

Key Action Points for Human Resources and In-house Counsel

Practical Points

  • The statute of limitations of five years applies, for example, to pay differences, fees due upon termination of employment, compensation for overtime work, wages for national holidays coinciding with Sunday, ect.;
  • This decision is significant under different point of views. In absence of any act of interruption of limitation period, claims arising prior to July 18, 2007 are time-barred. As of today, the employer is exposed to possible claims dating back to July 18, 2007 by employee: (i) whose relationship has not yet ended; or (ii) whose relationship ended in the last 5 years.
  • For instance, if an employee claims payment of salary differences related to June 2006, it is undisputed that the right to perceive the relevant sums is no longer due because it is expired. However, should the same employee, prior to the expiration of the 5-year period, had requested its payment by interrupting the statute of limitations, as of July 18, 2012, his right to the payment of such sums had not yet time-barred; it would therefore result that, if the same employee were still employed by the same employer to this day or his employment relationship had ceased less than 5 years ago, he would still be entitled to demand its full payment.