Italy: The Call Center "Question"

Contents

1. Introduction
2. Recent developments
3. Conclusions

Within the call center sector many Italian companies over the years have resorted, to contract with the call center operators, to consulting agreements rather than traditional employment contracts. Such consulting agreements (named in Italian "collaborazione coordinata e continuativa" - "coordinated and continuing collaboration" – and "contratto a progetto" – "project work" recently introduced by law) grants to the company significant flexibility and lower cost. At the same time, such contractual structures may create several problems if used inappropriately and if not carefully implemented.

Most often the modalities of work of call center operators feature many elements (i.e., content of the activities, fixed salary, working hours, etc.) identical or very similar to those element of an employment relationship.

With the Decree no. 267 of September 10, 2003 ("Biagi Reform," in memory of the professor who wrote the law and was then murdered by terrorists), the use of such alternative contractual structures has become even more critical.

First of all, under the Biagi Reform the "collaborazione coordinata e continuativa" is now applicable only to certain categories of workers. In most cases, including call center operators, a new type of contract has been made applicable: "contratto a progetto" or "project work". A "contratto a progetto" may be signed only when the individual being hired must realize a specific project or program, which must be indicated in the agreement; a "contratto a progetto" must be terminated when the project or program has been realized.

The question then becomes, to what extent a project or program may be identified in connection with the activities of call-center operators.

During the last 12 months the call center question has come up again at first through a circular letter of the Italian Labour and Social Security Ministry and through the National Budget Act 2007.

The Italian Labour and Social Security Ministry with the "circolare" no. 17, issued on June 14, 2006, has clarified that within the call center sector the "contratto a progetto" can be used only for "out-bound" activities, while this kind of consulting agreement is incompatible with the "in-bound" activities.

In case of "out-bound" activity, the call center operators contact the clients. Therefore the "out-bound" activity could be compatible with the regime of the "contratto a progetto" if the call center operators may organize their working activity autonomously (e.g., the company gives to each call center operator a list of clients to contact and the operator organizes autonomously the succession and the time of the calls).

On the contrary, in case of "in-bound" activity, the call center operators receive calls from the clients, therefore they cannot organize their working activity autonomously, because they have to work in office hours established by the company and cannot choose who and when to call.

In light of this, the Italian Labour and Social Security Ministry established with the "circolare" in question that the "contratto a progetto" may not be used for in-bound call centers.

Although a "circolare" is merely an interpretation and does not bind courts or companies, the "circolare" in question did have the effect of bringing many call center companies under the spotlight. Based on the "circolare", companies which had used the structure of the "contratto a progetto" for thousand employees could have been involved in "serial" litigation by their call center operators claiming to be recognized as employees. If the interpretation by the Ministry were to prevail in court, then the call center companies would have been financially buried by social security payments, both for past payments not made and future due payments.

In this context, the National Budget Act 2007, aiming both at stabilizing the working relationships of call center operators and at avoiding the financial distress of call center companies, introduce the possibly to convert "contratti a progetto" into employment agreements, without incurring in the full payment of social security.

To this effect, the National Budget Act 2007 required call center companies to enter into collective bargaining agreements with the competent Trade Unions in the period up to April 30, 2007.

Those call center companies which have signed these collective bargaining agreements may then execute individual settlements with each worker to convert the possibly invalid "contratto a progetto" into a 24 month employment agreement.

Social security for the period worked as "contratto a progetto" was still due, but halved.

As a result of these rules, about 20,000 call center operators working under a "contratto a progetto" have been reclassified as employees.

Following the "circolare" of the Italian Labour Ministry and the provisions of the National Budget Act 2007, call center companies in Italy may resort to "contratto a progetto" only assuring a high level of autonomy to the call center operators.

For the reasons above, this is really difficult if the call center operators carry out an "in-bound" activity. In this case, the companies must resort to different kinds of consulting agreements such as "contratto di inserimento", "contratto di apprendistato" e "contratto di somministrazione". Such kinds of consulting agreements, however, may present for the companies different problems and risks connected to their application.

Most likely, therefore, the restrictions on the use of consulting contracts for call center operators will further push companies to outsource their call center needs to companies dedicated to providing call center services. In this respect, in Italy almost 30% of call center operators work in an outsourced call center and this number is definitely going to increase in the future.

For further information on this topic please contact Francesco Portolano or Andrea Gangemi.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.