INL: Fraudulent internship and appeal to the Labour Relations Committee – clarification

20 April 2023

The National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) has issued Note No 453/2023, in which it provides clarification on the possibility of lodging an appeal under Article 17 of Italian Legislative Decree No 124/2004 before the Labour Relations Committee in the event of fraudulent internship.

Reference legislation

The internship (tirocinio), also known as an ‘stage’, does not take the form of a subordinate employment relationship, since the underlying aim of the contract is training that enables the intern to gain temporary experience in the world of work to enrich his or her professional knowledge and offer himself or herself for future recruitment. At the same time, the internship is an opportunity for the employer to train, according to its needs, a potential resource to be employed later within its organisation.

To regulate the manner in which this form of contract is used, Italian Law No 234/2021 (“Budget Law 2022”), in Article 1, paragraphs 720 to 726, introduced a series of measures aimed at curbing the improper use of this form of contract.

The legislation in question has provided that, for extracurricular internships continued and/or concluded after 1 January 2022, the sanctions set out in Article 1, paragraph 723, apply if the internship is carried out fraudulently. For an internship to be considered ‘fraudulent’, it is sufficient to prove that the internship relationship was actually an employment relationship, since fraudulence consists, according to the regulatory provisions, in the use of employees in the fictitious capacity of interns.

The sanctions regime

Paragraph 723 of the aforementioned Article, after reaffirming that an internship is not an employment relationship and that it cannot be used as a substitute for employment, namely provides for a fine of EUR 50.00 for each intern involved and for each day of internship.

Since this is a criminal sanction, punishedwith a fine, it is subject to the mandatory statute of limitations under Article 20 of Italian Law No. 758/1994, that terminates an existing relationship which breaches of the principles governing it. This is without prejudice to the possibility, in addition to the imposition of the penalty, and at the intern’s request, of recognising the existence of a subordinate employment relationship from the date of the judicial ruling. If the hosting entity complies with the requirement issued by the inspectors and pays the fine, the offence is administratively extinguished.

As regards the correct determination of the applicable sanction, in light of the principles set out in Articles 1 and 2, paragraph 1 of the Italian Criminal Code as well as the relevant case law, is it considered that the offence referred to in paragraph 723 can only be committed as from 1 January 2022, with the sanction accordingly being applied only for the days starting from that date.

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The National Labour Inspectorate, with the note under discussion, once again deals with the new regulations on internships, with particular regard to the sanctions introduced by Italian Budget Law 2022 to avoid any overlapping of judgments with criminal authorities.

Having ascertained the sanction regime applicable to the non-compliant use of the internship, therefore, the INL wished to clarify what remedies may be available to the hosting entity and whether or not the hosting entity may bring an appeal under Article 17 to ascertain whether, in relation to an internship, there is actually an employment relationship.

It should be pointed out that, under Article 17 of Italian Legislative Decree No 124/2004, the Labour Relations Committee assesses administrative appeals ‘against the assessment measures of the National Labour Inspectorate and the assessment measures of the Social Security and Insurance Institutions concerning the existence or classification of employment relationships’.

Notwithstanding the provisions of the legislation, in the present case, the Inspectorate wished to exclude the possibility of an administrative appeal to the Labour Relations Committee to avoid overlapping with judgments by the criminal authority. In fact, the incorrect qualification of the employment relationship in terms of subordination is directly sanctioned by a criminal law provision, under which the inspectors proceed with the drafting of the specific mandatory measure setting out the statute of limitations.

Moreover, the Inspectorate had already ruled out, in Note No 1551/2021, the possibility of lodging an appeal under Article 17 in the cases of unlawful outsourcing under Article 18, paragraph 5-bis, of Italian Legislative Decree No 276/2003. In that context no employment relationship is created since, also in this case, the choice of taking legal action to for a finding as to the existence of an employment relationship on the part of the beneficiary, under paragraph 3-bis of Article 29 and 4-bis of Article 30 of Legislative Decree no. 276/2003, is always devolved to the worker concerned.

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