New CBA for executives in the Industrial Sector: more protection for managers
On July 30th, 2019, an agreement was signed for the renewal of the National Collective Labour Agreement (CBA) for executives (“dirigenti”) working for companies in the trading sector. Except for one specific provision, which validity starting date is set out in the relevant articles, the new CBA is effective as of January 1st, 2019 and it will be valid until December 31st, 2023. Which are the major changes introduced by the New CBA?
First of all, the supplementary indemnity (i.e. the compensation due to dismissed executives in the event that a Court or an Arbitration Council finds the dismissal as not justified by legitimate reasons) due to the manager with a seniority up to 2 years has been increased from 2 to 4 months’ salary.
As a result of the change, the amount of the supplementary indemnity varies according to table below:
- 4 months' salary in case of company seniority up to 2 years;
- from 4 to 8 months in case of company seniority up to 6 years;
- from 8 to 12 months in case of company seniority up to 10 years;
- from 12 to 18 months in case of company seniority up to 15 years;
- from 18 to 24 months' salary over 15 years of company seniority.
In addition, new limits have been introduced with regard to the transfer which, unless otherwise agreed between the executive and the Company, cannot be disposed towards an executive who is 55 years old or older, or against an executive who has reached the age of 50 and has underage children.
With reference to the salary, new levels of minimum guaranteed compensation (“Trattamento Minimo di Garanzia - TMG”) have been defined for executives:
- EUR 69,000.00 per year starting from year 2020;
- EUR 72,000.00 per year starting from year 2022; and
- EUR 75,000.00 per year starting from 2023.
However, for executives already in force as of January 1st, 2015 the previous parameters shall continue to apply if more favorable for the manager.
The new CBA also introduces a new model of MBOs that can be applied by companies that do not have an own incentive plan already in place.
The model is featured by splitting the incentive into two parts:
- 50% (or another percentage established at company level) shall be paid when annual results are achieved;
- the remaining part shall be set aside pro-rata, and paid upon achievement of medium/long-term results.
With reference to holidays, the new CBA specifies that holidays exceeding 4 weeks per year provided by the Law must be taken by the executive within 24 months from the end of the year of accrual. After such date, the manager will no longer have the opportunity to use the accrued days, but only if the employer has previously formally invited the manager to use them within the 24-months term.
Coming to sick leave, the new CBA provides that the executive’s right to a 12-months period of paid sick leave shall be considered by taking into acount all absences that took place in the three years preceding each new sick fall.
The right to unpaid leave, however, is increased from 6 to 12 months in the case of oncological diseases, serious chronic-degenerative diseases or life-saving therapies.
With regard to private pensions, the contribution to the private Fund “Previndai” is now due for all remunerations up to EUR 180,000 per year.
Contribution rates are set out at 4% to be paid by both the company and the manager. Within the overall limit of 8% the company may, in agreement with the manager, bore a share of up to 3% of the contribution due by the manager.
In addition, the value of the insurance policy for the manager's death or permanent disability has also been increased effective from January 1st, 2020.
In details, the insurance for managers without spouses or dependent children will increase from EUR 150,000 to EUR 200,000; while the insurance for managers with spouses and/or dependent children will increase from EUR 220,000 to EUR 300,000.
The manager will contribute to the cost of the relevant premium with the amount of EUR 200 per year.
Lastly, it should be noted that employers are now required to pay to the association “4. Manager” a fee equal to EUR 100 per year for each executive in service in order to finance relocation policies in favor of executives of companies associated with “Confindustria” (the main employers’ association of the Industry Sector) who have been involved in redundancy or restructuring processes.