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Issues connected with the Staff Leasing Contract

What is a Staff Leasing Contract?

It is a particular employment contract involving three subjects:

  1. the Supplier (authorized Staff Leasing Agency);
  2. the User (your Religious Congregation);
  3. the Employee (cook, gardener, receptionist, cleaner, etc.).

The worker is employed by the Agency, but he/she works for the Religious Congregation.

Which are the cases where the Congregation is not allowed to use a Staff Leasing Contract?

Here are some of the most frequent cases:

Is a verbal Staff Leasing Contract valid?

No, the Staff Leasing Contract must always be in writing.

In the absence of a written document, the agreement is void and, as a result, the employee will be considered an employee of the Congregation under a permanent contract.

Consequently, by way of example, a two-month employment contract could be transformed into a permanent contract between the Congregation and the employee!

N.B. An extension of the contract of employment must also be in writing.

What happens if the Congregation gives the worker duties other than those for which he/she was hired?

If the worker is employed for superior duties, he/she is entitled to a higher pay; instead, if the worker is employed for inferior duties, he/she is entitled to monetary damages and to be assigned to duties consistent with his/her professional status and qualification.

Which is the salary that the Congregation must pay to the employee?

The Agency's employees have the right to a salary of no less than that given to the Congregation's employees of the same level and with same duties.

Who pays the employee's social security contributions?

The Staff Leasing Agency.

What happens in case of default by the Staff Leasing Agency in paying salary or contributions?

In such case, the Congregation is jointly liable with the Agency for paying salary and social security contributions, save the Congregation's right of recourse against the Agency.

In other words, the employee may request the Congregation for the payment and the Congregation would be obliged to make it. Only after having made the payment, can the Congregation request the Agency for "reimbursement". This of course entails the risk that the Agency might not have the money.

What can the Congregation do to reduce the risk of default in paying salaries and contributions by the Staff Leasing Agency?

In the first place, the Congregation can insist that that contract contain a provision obliging the Staff leasing Agency to inform the Congregation in a timely manner of the payment of salaries and contributions.

Even if this does not exclude the liability of the Congregation vis-à-vis the employee, it allows the religious entity to monitor the regularity of the payments and therefore to prevent the accumulation of arrears.

In addition, the Congregation can insist that the contract provide that the Staff Leasing Agency's failure to pay salaries and contributions trigger the automatic termination of the contract.

Which are the risks for the Congregation in case of "irregular" Staff Leasing Contract?

A Staff Leasing Contract is "irregular" when it is used to circumvent the rules on employment relationships (e.g.: the Congregation avails itself of unauthorized Agencies). The law provides for heavy fines for the Congregation. Specifically, in case of irregular staff leasing the following sanctions are provided for by the law:

When can the Congregation use an Agency's worker permanently?

This is possible only for employees hired permanently by the Agency.

The Law provides for sanctions in case of Congregations employing through a permanent Staff Leasing Contract more than 20% of its permanent employees.

When can the Congregation use an Agency's worker temporarily?

This is possible if there is compliance with the limits established by the collective bargaining agreements applied by the Congregation. However, these limits do not apply in case of workers falling within a redundancy pay scheme (mobilità), unemployed or the so-called disadvantaged workers.

P.S.: if you need assistance in the hiring process of a worker or you have doubts or questions about the Staff Leasing Contract, call us at +39 06 36712232 or send us an email to info@dikaios.interntional