Employer due diligence required for freelance worker contracts.

June 19, 2017
by Sergio Barozzi

On June 15th, 2017 a new Italian Law entered into effect ( Law No. 81 / 2017), part of the ongoing  reform of the Italian labour market  – the so called Jobs Act, which will impact employers in terms of freelance contractors which they hire.

As a result of this new legislation the old contracts of continuous, occasional and professional collaboration are now obsolete. More specifically the following types of clauses are no longer permitted:

  • The employer, that is the person who has engaged the services of the freelance professional, has the option  of unilaterally modifying the terms of the contract;
  • The employer can withdraw from the contracts which are renewed on a continuous basis without notice;
  • The employer will pay the invoice to the freelance consultant in 60+ days.

In addition, the reform introduces the principle of the written contract, even though this is in a somewhat Machiavellian manner.  More specifically “ it is considered abusive for the buyer of the services to refuse to enter into a contract in written form.” – without of a written contract a freelance profession who has asked for one can ask for damages.  In addition any agreement will be invalidated .

Contracts for autonomous workers have in the past 2 years  been subject to a profound revision that, starting from the important abolition of contracts by project ( done away with by the Jobs Act),  which also today impacts inventions made by freelance consultants while under contract with a business.

Therefore, it is strongly advisable for business to carry out a due diligence of existing freelance  consultant contracts to ensure that your organization will not face unpleasant surprises – possibly some even with serious consequences.

Already the fact that the contract dates back some time ago should trigger an alarm bell and push for an immediate review, especially if the existing agreement was not been written ad hoc but instead borrowed, or even worse if one of the many templates in circulation at the time was used for the engagement of services.

These are the areas which should in particular be examined:

  • Termination of thecontract
  • Period
  • Method of Execution
  • Inventio : Rights to New Commercial Discoveries
  • Method and Terms of Payment
  • Sickness/Accidents

For more information contact lexellent@lexellent.it

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