Formal requirements in employment contracts with transnational features

28 July 2023

A contract can only be considered valid and effective when specific requirements are duly fulfilled, including those relating to the form of the agreement. With particular reference to contracts regulating employment relationships with transnational features, things can get further complicated. Below is a brief examination of the most relevant aspects to be considered.

In Italy, the law does not generally require a written form of the terms of employment contracts to be valid and effective since an employment relationship can also be established de facto based on the conduct of the parties involved.

However, pursuant to Law No. 152/1992 – recently amended by Legislative Decree No. 104/2022 (the so-called "Transparency Decree") – it is mandatory that specific clauses, which define peculiar aspects of the employment relationship, are set out in writing and signed by both parties. For instance, it must be possible to infer from written document details such as the identity of the parties, the place of work, the employee's classification, qualification and level, as well as the beginning date of the relationship and its nature (e.g., if it is a fixed-term or an open term relationship). Such a document, which the employer is obliged to hold until five years after the termination of the relevant relationship, must be signed by all the concerned parties.

In addition to the merely informative obligations, some specific agreements concluded between the employer and the employee must be expressly indicated in the reference contract to be validly applied to the relationship. For example, where a probationary period is envisaged, the so-called 'probationary covenant' must be set out in writing and executed, explicitly indicating the duties assigned to the employee during this period. Otherwise, the latter will be considered null and void, meaning that the termination potentially served pursuant to the provisions related to probationary periods would not be lawful.

Italian legal provisions on signature requirements tend to be particularly strict. More specifically, when required under the terms mentioned above, employees may express their consent exclusively through their handwritten or legally valid digital signatures. Therefore, unlike the provisions in other jurisdictions, the formalities at issue do not allow parties to express their agreement by exchanging an e-mail or scanning a document not digitally signed by both parties.

Defaulting the mentioned provisions – besides the applications of sanctions due to non-compliance with the informative obligations indicated above – could lead to one of the parties claiming the invalidity of the entire document.