As is well known, the rules outlined in Section 2112 of the Italian Civil Code apply in cases of transfer of a company (or a part of it); such provisions aim at maintaining and protecting the rights accrued by employees up to that moment. It is, however, open to question whether these rules suffer from exceptions, such as when the companies involved are in a situation of overt crisis. The following is a brief analysis of the general features of European and national legislation on the matter. The purpose of Directive 2001/23/EC of March 12, 2001, is to harmonise the laws of the Member States in the area of the protection of employees' rights in cases of transfers of undertakings, businesses or parts thereof to a new employer, following contract transfers or company mergers. More specifically, the aforementioned Directive is concerned with safeguarding the respect of the vested rights of employees whose employment relationships are shifted under the management of a new employer as a result of massive transformations of the company for which they used to perform their services until such an event happened. In Italy, the provisions applicable to such cases fall under Section no. 2112 of the Italian Civil Code. More specifically, said legislation is mainly concerned with ensuring that, following the operation, employees are still entitled to the same levels of protection guaranteed under their previous employment relationship, which could be amended only if better conditions are provided. However, according to EU legislation, exceptions to this regulation are permitted where the transferring company is subject to insolvency proceedings taking place under the supervision of a competent public authority and where such a condition is consequent to the liquidation of the company's assets (Section 5, par. 1 of the Directive in question). Therefore, in cases where the companies involved are in a state of difficulty, the discipline mentioned above must be subject to certain limitations (more specifically, business crisis or the opening of the procedure for an arrangement with creditors or approval of the debt restructuring agreement). In the context of the management of a state of crisis such as the one mentioned above (specifically, in the case of the declaration of the opening of the procedure of arrangement with creditors based on indirect business continuity; approval of debt restructuring agreements, when the agreements do not have a liquidation character; disposition of the extraordinary administration in the case of continuation or non-termination of the activity), Section 47, par. 4-bis, L. no. 428/1990 applies. As a result of the new Crisis Code’s amendments, such a norm provides that where an agreement with the unions has been reached to maintain pre-existing employment levels, rules are set out under Sec. 2112 of the Italian Civil Code (governing employees’ entitlements) is applied with limitations: to safeguard the occupation levels achieved up to that moment, worsening modifications of the conditions that will be applied to the employees following the transfer, compared to those previously provided, will be allowed by executing a specific trade union agreement. The next par. 5 of the same Section, on the other hand, refers to other events which concern an advanced state of the crisis condition of the company involved, for which the possibility of continuation of the business activity has been ruled out. Such are the cases in which there has been the opening of judicial liquidation or composition with creditors or the issuance of the order for compulsory liquidation, where the continuation of business activity has not been ordered or has ceased. In such circumstances, the provision of guarantees to transferred workers may be limited through a special union agreement executed to safeguard employment levels thus reached. Moreover, the solidarity regime between the transferor and transferee will not automatically apply, and severance pay will immediately be payable to the transferor of the business. Finally, if the transfer concerns companies in respect of which there has been a filing for the extraordinary administration without continuation of activity (from the beginning or intervened subsequently) and an agreement with unions has been reached aimed at maintaining - even partial employment - for employees whose relationships continue with the acquirer, according to the subsequent paragraph 5-ter of the provision above, Sec. 2112 of the Civil Code does not fully apply unless said agreement provides for better conditions. The same agreement, moreover, may provide that the transfer concerns only part of the personnel employed by the transferred company, while the remaining others will stay in their previous positions with the transferor employer. Therefore, we may conclude that the Italian legislation complies with the European provisions on the matter since our Country has already provided for the reconciliation of the provisions protecting the employees' vested rights with the need to safeguard the creditors of the company in crisis and the related need to support, also for this purpose, the continuity of the business activity or the profitable transfer thereof.
