EMPLOYMENT CONTRACT. — In ancient Roman society, where manual services were performed by slaves (operae illiberales), who were regarded as res, the employment relationship was conceived as a subspecies of the lease of things, whereas intellectual work, the only kind considered worthy of a free man (operae liberales), was the subject of a different relationship (mandate), presumed to be gratuitous. After the abolition of slavery, the Roman conception of subordinate work, transmitted through the Middle Ages by the characteristic conserving force of legal concepts, found, in modern capitalist society, a new justification in the doctrine of nineteenth-century economic liberalism, which regards labor as any other commodity, subject to the play of supply and demand.
The development of the class struggle, which brought about the collapse of the principles of classical economics, setting state society on the path toward forms of regulated economy; the advent of new economic doctrines, including the Christian one, born in the wake of Rerum Novorum; and the consequent gradual social and political advancement of the working class—these, in brief, are the reasons why, in the new legislation, the employment relationship has disengaged itself from the framework of leasing and has been established as an autonomous legal institution. Finally, the Constitution of the Italian Republic, in force since January 1948, after placing labor at the foundation of the State (art. 1), understood broadly «in all its forms and applications» (art. 35), thus characterizing it as a title to participation in the direction of the state community, has given constitutional significance to the fundamental principles that must inspire the regulation of the employment contract.
I. INDIVIDUAL EMPLOYMENT CONTRACT
The worker undertakes, in return for compensation, to place his working capacity at the disposal of the employer, under the latter’s authority and direction (Civil Code, art. 2094). The worker’s subordination to, or dependence on, the employer is the fundamental characteristic of the relationship, and the criterion distinguishing it from a contract for services (Civil Code, art. 2222). The former has as its object the utility inherent in subordinate work activity; the latter, instead, has as its object the result of autonomous work: in the one case, the risk of the work, both as regards the result and as regards the harm that may be caused to the worker’s person by the work, falls upon the employer; in the other, conversely, the risk is borne by the person who has undertaken to perform the work or service.Theoretically, the characteristic of subordination may be explained as the logical consequence of the original indeterminacy (within the limits of the worker’s contractually established qualification) of the content of the services in which the relationship will unfold: that content will subsequently be determined by the employer (Civil Code, art. 2103), and this precisely implies, on the latter’s part, a power to direct the conduct of the relationship itself. But, in the normal run of cases (though not always: domestic work may be considered), the element of subordination is connected, more significantly, with the concept of enterprise; that is, it expresses the worker’s incorporation into the enterprise of which the employer is head (Civil Code, art. 2086), which is equivalent to saying that, as a rule, the employer is an entrepreneur (Civil Code, art. 2082). In homage to the principle of the subjective role of labor in the economy, the new Code repeatedly emphasizes, in the employment contract, the function of incorporating the worker into the enterprise, and not into the business establishment, which is the object of the former: both by calling the worker “the entrepreneur’s collaborator” and by defining the business establishment as an organization exclusively of assets and not also of labor (Civil Code, art. 2555). Today, the principle of workers’ collaboration in the management of the business establishment has become a constitutional directive (art. 46 of the Constitution), and is moving toward taking more concrete form in the “management councils.”
Workers are divided into two categories: employees and workers, and correspondingly the employment contract is specified as a (private) contract of employment and a manual-labor contract. Administrative or technical managers, whom the Code seems to place in a third category, are in reality no more than employees distinguished by managerial functions.
The criterion distinguishing the two categories is found in art. 1 of the law on private employment (R. Decree of 13 Dec. 1924, no. 1825, referred to by art. 95 of the provisions implementing the Civil Code), and consists not so much in the predominantly intellectual or manual nature of the work activity as in the collaborative character of the employee’s activity, in contrast to the simple manual-labor services of the worker. This criterion seems to be contradicted by arts. 2094 of the Civil Code and 46 of the Constitution, already mentioned, in which all workers, including therefore manual workers, are presented as collaborators of the entrepreneur. In truth, however, “collaboration” is here understood in the broad and general sense of cooperation in achieving the enterprise’s economic purpose, and above all as part of a socio-political program for reconciling conflicts between capital and labor at the level of the enterprise, and not merely, externally, at the trade-union level; whereas the collaboration referred to in art. 1 of the cited R. Decree has the specific and proper meaning of collaboration with the entrepreneur in the technical and administrative organization of the enterprise, and consequently the employee is a subject of the organization. The worker, on the other hand, collaborates within the organized enterprise and is therefore an object of the organizational activity of the entrepreneur and his employees.
As regards the legal regulation of the employment relationship, mention must be made of the most important point: the remuneration or wage of the worker (which, more specifically, is called salary in the case of an employee).
The wage, whose family-support and social-security function has been affirmed by the new Constitution (arts. 36 and 38), ordinarily consists of a sum of money (nominal wage) and therefore gives rise to a monetary obligation, subject to the nominalist principle (Civil Code, art. 1277), which is nevertheless corrected by various devices, such as the so-called sliding scale, intended to adjust wages to the cost of living, that is, to fluctuations in the purchasing power of money. The law (Civil Code, art. 2099) permits remuneration to be provided also, wholly or in part, through benefits in kind (real wage), but this must be regarded as an exceptional form, and in any event not an exclusive one, but complementary to monetary remuneration.
The minimum level of wages is removed from the negotiation of the individual contracting parties and fixed in advance by collective employment contracts, concluded by the professional associations of the category, with binding effect for all members of those associations, according to the principles of representation. But when they are concluded by a trade-union body in which all the recognized unions of the category are represented in proportion to their respective memberships, the new Constitution (art. 39) grants collective contracts binding force for all members of the category, even if they are not members of the unions: in such a case, the collective employment contract is only formally a contract; in substance, it is a source of legal rules.
Like the trade-union organization, so too the collective labor contract is, from a general point of view, a manifestation of the contemporary tendency of organized groups to substitute their wills, as bearers of collective interests, for the general will of the State and for that of individuals. Hence the familiar phenomenon of the crisis of legislation and of the contract, considered as the exclusive sources, from both the objective and subjective points of view, of the regulation of social relationships; a phenomenon accompanied by the progressive emergence of new intermediate legal forms, such as normative contracts, among which the collective labor contract is also to be included.
From the particular point of view, the collective labor contract seeks to ensure that the conditions agreed upon by the individual worker and the individual entrepreneur do not fall below a certain objectively predetermined level: thus, to the economic function proper to the normative contract in general, which is to ensure standardization in the regulation of particular relationships, the collective labor contract adds the social function of representing a minimum level of conditions guaranteed to the economically weaker contracting party. Hence the natural tendency of the collective labor contract, considered in its effects, to leave the framework of contractual agreements and enter that of objective provisions. The problem of justifying the binding effect, and indeed the applicability as of right, erga omnes, of the collective labor contract, even in the silence or against the dissent of the individual persons concerned, whether members or non-members of the contracting organizations, has repeatedly attracted the attention of legal scholarship, not only in Italy; but the results obtained on the basis of traditional common law have never been convincing. Consequently, in all industrially and socially advanced countries the problem has been resolved through the adoption, especially after the First World War, of specific legislative provisions, which have given the collective labor contract a legal framework suited to its economic and social purposes.
Considering as a whole the laws adopted by the individual countries, it may be said that, with the exception of Great Britain, where the collective labor contract is a gentlemen's agreement, whose application is chiefly guaranteed in practice by the authority of the trade-union organizations, they generally follow the policy of expressly establishing the applicability as of right of the collective labor contract, except in the case of more favorable conditions, and of providing a system through which the collective labor contract may, when the expressly established conditions are met, extend its effect to the entire interested employers’ and workers’ category. Such extension may occur either in every case, by express provision of law (Russia, Labor Code, art. 16; Portugal, Labor Statute [1938], art. 33; Spain, Labor Charter [1938], parts 3ª and 13ª; etc.); or on a case-by-case basis, by virtue of an act of the public administration (France, law of 23 Dec. 1946; the Netherlands, law of 25 May 1937; Switzerland, federal law of 1 Oct. 1941; etc.), or of an arbitration or conciliation award (Australia, federal law of 22 June 1928; New Zealand, law of 8 June 1936; etc.).
In Italy, within the framework of the Fascist corporative system, the collective labor contract received specific regulation in Law no. 563 of 3 Apr. 1926 and in the various laws that followed II. The collective labor contract could be concluded only by legally recognized employers’ and workers’ associations invested by law with representation of their entire respective category; or, upon their delegation or in the absence of their agreement, by the relevant corporation or by the labor court. The collective labor contract had, under penalty of nullity, to contain the regulation of certain elements of the employment relationship, and was subject to review of legality and substance through the procedure of deposit and publication. Once published, it had the force of a genuine law of the category, and compliance with it was guaranteed by a threefold set of sanctions: disciplinary, civil, and criminal.
The principal provisions of the regulations given to the collective labor contract from 1926 onward were incorporated into the Civil Code (arts. 2067 ff.), which entered into force in 1942. Among the codified provisions, particular importance attaches to art. 2077, which positively confirms the so-called automatic application of the institution in question, in the sense that the rules contained therein replace de iure the divergent provisions of individual contracts falling within the field of application of the collective labor contract, unless those provisions prove more favorable to the worker.
Ordinances of the Allied military government subsequently confirmed, that is, from 1943 to 1945, the abolition of the Fascist corporative system, already partly implemented after 24 July 1943, with the result that the foundations of the aforementioned system and, in particular, the professional associations invested with legal representation of the entire category, ceased to exist. Legislative Decree no. 369 of 23 Nov. 1944, which confirmed and specified the above-mentioned ordinances, nevertheless established that the collective labor contracts enacted by the Fascist organizations should continue to have the force of rules until their replacement by new collective agreements.
The legal structure of the present trade-union organizations is, for the time being, that of associations under private law and de facto associations, which legally possess no means of binding non-members and, in a certain sense, even their own members. Compliance with the collective labor contracts meanwhile agreed upon, almost entirely replacing those formed under the Fascist regime, is based solely on considerations of social or political expediency; this makes the adoption of new legislative provisions necessary.
The Italian Constitution, which entered into force on 1 Jan. 1948, in fact contains the directives for such legislation: art. 39, after establishing that trade unions acquire legal personality through registration with local or central offices, provides that registered trade unions « may, represented jointly in proportion to the number of their members, conclude collective labor contracts having binding effect for all those belonging to the categories to which the contract relates ». It was therefore expressly intended to affirm the possibility that the collective labor contract should produce its effects as a rule of the category, becoming, as a proportional manifestation of the will of the majority, law for the general body.
More precisely, the Constitution recognizes two forms of collective labor contract: contracts concluded by individual registered associations, whose effectivity
shall not extend beyond the membership, and compliance with them shall be guaranteed by the sanctions generally provided for in matters of contractual obligations; and contracts concluded by the various registered associations that may exist for the category concerned, whose effect shall extend to all members of the category, and whose observance could be guaranteed by a more rigorous system of sanctions. Whereas the first form of collective employment contract will stand alongside company regulations and individual contracts as a subjective source, the second (established by virtue of a regulatory function delegated by the State to bodies governed by private law) will stand alongside laws and regulations as an objective source for the regulation of contractual relations involving subordinate employment.
From the standpoint of the orientations of social doctrine inspired by Christianity, the collective employment contract has always been regarded as an effective instrument for pacification between capital and labour, and for safeguarding the legitimate interests of the working class. Such doctrine can therefore only favour the possible transformation of the collective employment contract into an objective norm; it nevertheless intends (in opposition to corporative systems based on authority) to safeguard in every case the principle of trade-union freedom, and consequently to admit—as is admitted by the new Italian Constitution—to the conclusion of collective employment contracts the various professional associations that may exist for a given category.
Luisa Riva Sanseverino