The distinctive features of the service agreement rendered by manpower (“appalto di manodopera”): the latest guidelines of the Italian Supreme Court

Prepared by Francesca Tironi and Giulia Spalazzi

The Supreme Court of Cassation has recently addressed the issue of the unlawful interposition of manpower in the context of a service agreement rendered by manpower by means of Ordinance No. 4828 of February 16th, 2023, providing clarifications on the need to exclude the genuine nature of the service agreement in all those cases in which the contractor company actually lacks a business organization, and its employees, although formally employed, are effectively subject to the management of the principal company of the service agreement.

The litigation originated from the grievance of a number of employees who had been working for years on the same service agreement rendered by manpower, who filed a lawsuit in an attempt to have the existence of a fictitious interposition of manpower and the consequent constitution of a subordinate employment relationship with the principal company declared by the judges. Those employees deduced that, during the performance of the service agreement under consideration, the controls carried out by the principal had taken the form of exceeding the normal power of coordination which, in such contexts, is conferred on the principal’s company, and had taken the form of an actual management of the work of the contractor’s employees.

In resolving the case before them, the Supreme Court judges first of all recalled that, in case of a service agreement concerning activities to be performed within the premises of the principal, it is unlawful to use a service agreement whenever the contractor makes available to the principal only the labour services of its own employees, without having any autonomous organization and without undertaking the management of the performance and responsibility for the result of the work performed under the service agreement itself, thus creating an unlawful supply of manpower.

Following this preliminary remarks, the Court went on to clarify what are considered to be the revealing indicators of such a situation, which will therefore be of the greatest interest to those operating in the sector: such indicators would be recognizable in those cases where the contractor only deals with the administrative management of the employment relationship with its employees, such as, by way of example, the payment of salaries, the planning of holidays and the enforcement of the continuity of the working activities set forth in the service agreement. All of this, as clarified by the Italian Supreme Court, is not sufficient to ensure proper compliance with the regulations on this matter, since it is not possible to disregard the control of the presence, on the part of the contracting party, of a real organization of the service covered by the service agreement itself, which must necessarily be aimed at an autonomous productive outcome and not at the mere administrative management of the workforce assigned to the service agreement.

Hence the Court’s ruling, which clarified how, in order to assess the authenticity of a service agreement rendered by manpower, it is indispensable to rely on the requirement of autonomous management and organisation: if this is lacking, the service agreement can only be included among those prohibited by Italian legislation, because it constitutes an unlawful supply of manpower.

The final conclusion of the Italian Judges of the laws also pointed out that the exclusion of the authenticity of the service agreement and the fact that the employment relationship was directly attributable to the principal’s company was also based on the exercise of management and control powers over the contractor’s employees directly by the principal, which was absent in the examined case.

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Francesca Tironi

PwC TLS Avvocati e Commercialisti