Italy welcomes legislative changes in the area of DE&I

Elena Ryolo

Legance – Avvocati Associati, Milan
eryolo@legance.it

Introduction

Italian employment law, which is traditionally seen as obsolete and ‘old-fashioned’, has recently shown an unexpected acceleration, modernisation and consideration of topics like diversity, equality and inclusion, thus, urging employers to acquire greater awareness of social themes and embrace cultural change.

Nowadays, when discussing alignment with environmental, social and governance (ESG) criteria, the previously neglected ‘s’ has a more explicit meaning and deserves growing attention, so much so that human resources (HR) personnel are increasingly involved in the general sustainability programmes that their companies adopt.

A significant impulse towards such legislative evolution came from the tangible goals imposed by the Next Generation EU and the Italian Recovery and Resilience Plan, which played a decisive role. Indeed, while implementing actions aimed at a fairer, greener and more inclusive country with a more competitive, dynamic and innovative economy, the Plan grants significant economic incentives in favour of the organisations that adequately face and manage the environmental, technological and social challenges of our times.

In this context, the recent introduction of certain fulfilments and opportunities for employers represents a first step towards building more inclusive and equal working environments, imposing greater attention on certain organisational aspects, which in most cases have not been sufficiently considered so far.

The new requirements

All companies with upwards of 50 employers are now required to prepare and submit to the Ministry of Labour a biennial report providing details on their headcount structure (for smaller companies, the preparation of the submission is not an obligation but an option). The objective of the report is to provide a ‘snapshot’ of the organisation, in its various stratifications, in terms of the presence of male and female employees in the different positions and hierarchical levels, as well as their respective pay conditions, while at the same time gathering information on actions taken to reduce the salary gap and to grant equal working conditions, ranging from the recruitment and promotion processes to the tools and measures made available to promote a good work–life balance, or the implementation of corporate policies guaranteeing an inclusive and respectful working environment.

In addition, companies submitting the report, outlined above, can apply for and be awarded the so-called Gender Equality Certification. The requirements for obtaining this certification are described in detail in an official technical document that, to measure the effectiveness of actions taken by organisations to create an inclusive working environment, identifies 33 different key performance indicators (KPIs) spread over six relevant areas (ie, culture and strategy, governance, HR processes, opportunities for growth and inclusion of women in the company, pay equity by gender, parental protection and work–life balance). Each area is then assigned a specific percentage weight, totalling 100, and a minimum score of 60 per cent is required to gain access to the certification. Using ‘KPIs’ in the Italian employment law domain is unique and highlights the legislator’s new approach.

The benefits of obtaining the Gender Equality Certification are significant. In addition to the undoubtedly positive reputational effect, companies can thus get a preferential score in funding applications and public tenders, as well as social security relief. These benefits have played an essential role in encouraging companies to embark on this process, and in a few months, almost 200 organisations have applied for and already received the certification.

The attempt to qualify for the Gender Equality Certification undoubtedly imposes a new and greater focus on specific operational processes that impact diversity, equity and inclusion (DE&I). For instance, greater attention must be given to adopting (and effective implementing) codes of ethics or conduct and, generally, policies containing the behavioural rules inspiring the company. At the same time, more than just the formal adoption of codes is needed since employers must guarantee their practical observance and respect of the detail within these documents, when necessary, through disciplinary actions.

Also, the areas related to recruitment processes, remuneration and welfare policies and, more generally, the guidelines for employees’ professional growth now require special attention because they should be addressed and shaped from a gender equity and inclusion perspective.

Finally, employers can also study and implement remote or hybrid working schemes as an opportunity to create a more inclusive, flexible and adaptive organisation.

Conclusion

Thanks to the new legal framework, the boundaries of employment law now encompass non-traditional and partially unexplored areas, where legal aspects are increasingly intertwined with management and organisational issues. This requires, among other things, the adoption of new forms of ‘creative’ collaboration between legal counsel and corporate management, which we believe are of extreme interest and offer great incentives for the future of our profession.