When Collective Agreements End, Do Pay Protections Continue?

Under Italian law, collective bargaining agreements play a central role in regulating employment relationships. In addition to national collective agreements, which apply across entire industries, employers and trade unions may also enter into company-level collective agreements which typically supplement national-level agreements by introducing tailored conditions and particular enhanced economic rights.

With this background in mind, the Italian Supreme Court recently addressed the issue of whether employees may continue to enjoy benefits granted under a company-level collective agreement after the employer has withdrawn from that agreement. 

The employees claimed that, on the one hand, an employer may always withdraw from an open-ended collective agreement, but, on the other hand, such withdrawal cannot adversely affect workers’ right to maintain the same level of remuneration, as that right is directly protected under the Italian Constitution.