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“SMART WORKING”: what it consists of, how it is performed, why it is worthwile

Definition and distinguishing characteristics

“Smart Working” or “Agile Working” was first introduced in Italy through L. #81 22 May 2017 with the purpose, made clear in the aforementioned law, to increase competitiveness and facilitate life-work balance.

In order to understand the true meaning of “agile working” it is, first and foremost, important to free the context from possible and recurring misunderstandings and to point out that “smart working” is neither a new contractual typology of work relationship (being smart working still a subordinate form of employment), nor a type of work entirely performed remotely from home, which instead characterizes the so-called telecommute.

It is instead a particular modality to carry out the subordinate employment relationship which entails a new approach to working and collaborating within a company, allowing the worker, through a contract between the parties, to perform the duties partly inside the company premises and partly outside, without specific work schedule and workplace restrictions.

The Smart Working Observatory scientific director offers a precise definition of Flexible Work, stating:  “Smart Working means rethinking work from a more intelligent standpoint, questioning traditional obligations related to workplace and schedule, leaving people more independence to define work modalities based more on result-based responsibilities. Independence, but also flexibility, accountability, valuing talents and trust become the key principles of this new approach.”

The necessary smart working corollaries are the following:

Schedule and workplace flexibility

The first element that characterizes agile working is flexibility, namely overcoming the typical pattern of subordinate work performed inside the company and within a set work schedule.  Smart working entails, in fact, allowing the employee to decide, for the time spent working outside the company premises, to organize his/her own professional activities, without any time constraint, without prejudice to the maximum daily and weekly work schedule as provided by law and by CCNLs, and without the need to physically commute to the company, still freely electing his/her work place as an alternative to company premises, which may be his/her own home, as well as a co-working space or, more simply, a normal public library.

Work activity organization by cycles, phases and objectives

According to the smart working corollary, as a direct consequence of the first, it is necessary for the company to review work activities organization, which entails passing to a definition of work activities by phases, cycles and responsibilities, hence no longer based solely on the hours spent working.

If, on one hand, smart working’s typical flexibility involves worker’s freedom to balance life and work, on the other, determining periodic objectives or precise work phases implies responsibility, or better, worker’s accountability.

The simultaneous compresence of said elements allows, in fact, the employer to ascertain his/her employee’s productivity and determines, also under such profile, a change in the “employer’s control approach”.  The employer, in fact, moves from a formal type of control, limited to the compliance with work schedule and ordinary diligence in performing duties, to a merit-based control, free from schedule and company regulations, but aimed at verifying the actual achievement of the results.

More trust conferred upon the worker, as an essential element of smart working, goes, therefore, hand in hand with result-based accountability, leading to more company competitiveness and productivity.

Technological equipment

The third smart working corollary is the use of technological equipment, necessary to carry out work activities outside company premises.  The minimum technological requirements to implement a smart working program will be the availability of a PC, a company phone and internet connection.  Such instruments must be provided by the employer who is required to guarantee their proper functioning and respect of safety standards.

How and when it may be implemented

Smart working, as a method of carrying out work duties, may be introduced at any time in the employment relationship, upon written agreement with the employer.

81/2017 explicitly provides the necessity of a written agreement between the parties which must be compulsorily sent via online communication to the Department of Labor and Social Policies.

Such agreement, on the basis of what provided by art. 19 L. 81/2017 must provide the following minimum requirements:

Duration: The contract can be permanent or temporary

 

Termination: In case of permanent contract, termination is possible with a notice period of at least 30 days (90 for disabled workers pursuant to art. 1 L. #68 March 12 1999), or without notice in case of just cause dismissal.  Conversely, for temporary contracts termination is not allowed unless in presence of a justified reason.

 

Work performance modality: The contract must be governed by laws related to work activities execution outside company premises, with specific focus on the technological equipment used and the respect for the worker’s right to disconnection.  It is indeed important to point out that the predominant use of IT technologies combined with goals definition by phase and cycles without a pre-set work schedule may not and must not mean a demand of required availability by the company, given the worker’s right to disconnection, which needs to be regulated within the contract.

 

Control and disciplinary power: Furthermore, control modalities of work performance outside company premises must be outlined in the smart working program, considering art. 4 of the Workers’ Statute.  The data collected via IT technology instruments may be, in fact, utilized for every scope related to the employment relationship, as well as the exercise of disciplinary power, as long as the worker has been adequately informed on the use of the instruments and the possibilities of control.

 

Smart-worker’s tutelage

An essential element of the law which introduces the so-called agile working is the equality of treatment of smart workers compared to employees who do not adhere to such typology of work performance.  The legal and compensation process must be the same, as well as the adoption of adequate safety rules.  In particular, with regards to work schedule, along with the right to disconnection, the law recognizes the inviolability of time limits provided by the laws in force and collective contractual regulations.

“Agile” workers also have the right to tutelage provided in case of injuries or sickness in the workplace also for those services rendered outside company premises and during the commute between their home and the location chosen to perform their duties.

On such note, INAIL has provided operative instructions in newsletter #48/2017.  It is furthermore observed that the 2019 Budget Law grants priority to agile working applications submitted by female workers within the three years after the conclusion of their maternity leave period and by workers with disabled children.

Advantages for companies

Using the evidence collected by the Observatory on smart working via surveys and pilot cases, we can assert that the benefits that can be obtained through the introduction of Smart Working by companies can be tangible and relevant, translating into the improvement of worker’s productivity, reduction of absenteeism and cost reduction for physical premises.

The legislator itself identifies two reasons for which the employer and the employee may benefit from resorting to smart working modalities:  It is competitiveness increase on the employer’s side and work-life balance on the worker’s.  Increase of competitiveness may be seen from the dual angle of productivity increase and also corporate employer branding, attracting a more talented and motivated labor force.

The more tangible and immediate reason consisting in reducing corporate expenditures, in terms of lower cost of space and equipment, as well as work performance, adds itself to the first two.  In other words, the worker who carries out his/her work duties  by way of agile modality allows the company to reduce costs related to space rentals, utilities and equipment, as the necessary space for the staff is reduced in proportion to the intensity and frequency at which work in agile modality is performed.

Ultimately, labor cost reduction may also stem from lesser burdens related to overtime work, which does not match with “smart” working modality which, per its nature, does not have predefined work schedule restrictions.

 

Posted by Avv. Francesca Baroncelli Poggi
Insights

Smart contracts and Italian regulations

SMART CONTRACTS AND ITALIAN REGULATIONS

 

Law n.12/2019 published in the Gazzetta Ufficiale on February 12, 2019, Simplification Law, in article 8-ter paragraph 3 has, among other things, elaborated the definition of technology based on distributed ledgers and smart contracts, holding that:

Art. 8-ter (Technologies based on distributed ledgers and smart contracts):

1. The definition “technologies based on distributed ledgers” refers to those technologies and IT protocols which use a shared, distributed, copyable, simultaneously accessible ledger, architecturally decentralized on cryptographic bases, so as to allow the registration, validation, update and archiving of data, both unencrypted and protected by cryptography, verifiable by each user, neither forgeable nor modifiable.

2. The definition of “smart contract” refers to a computer program that works on technologies based on distributed ledgers and which performance automatically binds two or more parties on the basis of the effects previously defined by the parties themselves. Smart contracts fulfill the written form requirement upon prior electronic identification by the parties at hand, through a process the requirements of which are set by the Agency for Digital Italy with guidelines to be adopted within ninety days from the effective date of the entry into force of the decree hereto.

A reflection and analysis related to smart contracts warrants a brief mention on blockchain, which main objective was to allow money transfers without the intervention of intermediaries. To simplify, a blockchain may be meant as a Ledger, each unit of the ledger is a block and the blocks are connected with one another in the order in which they are created, through the cryptography method, which binds them in a virtual and non-modifiable way. Transactions are made within the chain and the data mining process is performed on the basis of mathematical calculation performed by a device.

In other words, the main blockchain functionality is that of guaranteeing that any transaction may be directly started and completed between two individuals on an open and programmable network.

It is indeed on the blockchain platform that smart contracts are saved.

The key is the idea that the blockchain transaction ledger functionality may be used to record, confirm and transfer all types of contracts and to perform ownership transfers, meaning, for example:

Financial transactions: Stocks, private equity, crowdfunding, bonds, mutual funds, annuities, pensions and all types of derivatives;
Public records transfers: Real estate and land ownership titles, vehicle registrations, business licenses, death certificates;
Digital identity may not be confirmed with blockchain through a drivers license, identity card, passport;
Financial commitments of individuals: Promissory notes, loans, bets, trusts.

In order to provide further explanation and assuming that the contract is an agreement between two or more parties, the formation of which requires that each party trusts the other party to fulfill his/her obligation, we may state that the object of smart contracts is the same type of agreement (contract), without the necessity of trust among the parties, as the contract is defined by the code and by the code it is defined automatically and without discretion. Therefore, in this context, the contract is seen a method to create blockchain-based agreements with people.

The main characteristics of smart contracts may be identified as: Autonomy , Self Sufficiency and Decentralization .

With Autonomy we mean that once the contract has been formed and is enforceable, there is no need for further contact among the parties.

With Self Sufficiency we refer to the ability to manage resources through the blockchain mechanism, namely raising finance by offering services, for example through stocks issuance, locating necessary resources, and autonomy of data processing and storage.

With Decentralization we mean the absence of a single centralized server and the distribution of data, which can self-process through the network node.

This cryptographically-activated activity system leads to a number of considerations, firstly the fact that there is a necessity to create new laws and rules to carefully regulate the new “institution”. Italy has acted accordingly to provide, for the first time, a true and proper definition of smart contracts as indicated above, with the objective of defining some fundamental aspects aimed at providing a more substantial application. The Agency for Digital Italy will identify the technical standards and the distributed ledgers-based technologies which they need to possess in order to fulfill the purposes in Paragraph 3 within ninety days from the Simplification Laws effective date.

Posted by Avv. Francesca Baroncelli Poggi
Insights

Coworking: the Regione Toscana tender for coworkers is now open

Coworking is a growing type of workspace sharing, not only among freelancers and start ups, but also among company employees, as it relates to the development and diffusion of the law which regulatessmart working.

The Regione Toscana has become actively involved in the growing phase of said law, through the creation of a list of qualified coworking spaces providers in Tuscany (eventually updated through Executive Decree n.6293 dated May 12, 2017 ) and providing for the distribution of subsidies for an amount of up to €3.500,00 for those who wish to avail themselves of coworking spaces, with the approval of the Notice for the distribution of vouchers in support of self-employment and independent work through access to coworking spaces indicated in the regional list for the years 2018, 2019 and 2020, for which the next window of opportunity for applications will be between December 1 and 31, 2018..

It is therefore necessary to provide a brief explanation of the subject matter through an analysis of the main criticalities to be considered when proceeding with the stipulation of a coworking contract.

Coworking offers advantages for both parties: Both for the lessor, whose benefits are of economic nature, as a higher profit is achieved by the property through such method, and for the users, who may benefit from functional and complete premises to start their own business without resorting to office spaces which have to be compliant with safety regulations pursuant to d.lgs. 81/2008, avoiding therefore initial investment costs.

The OBJECT of the contract is the provision and the fruition of a workstation, for a pre-determined time period upon payment of a fee. It is an atypical contract and, therefore, without prejudice to the general principles of contract legal codes, the parties are free to regulate its contents in its characterizing elements:

Workstations typologies: “for ongoing use”, “for sporadic use”, “for independent office use”, “for meeting room use”, “for training room use”;
Available Equipment and services: Internet use, photocopier, scanner, meeting room, lighting, water and, generally, also cleaning of the space and, possibly, secretarial services;
Schedule:The user may use the spaces without time limits, both during weekdays and holidays, or agree on a specific schedule by identifying specific hours and days;
Duration: Freely determinable, as there are no term obligations, with termination method specification and possible implicit renewal;
Price: The fees must be indicated in writing, with payment methods and terms (monthly fee or magnetic card counters). A pre-determined one-month security deposit may be required.
Liability: Due to the lack of any ad-hoc law, it is recommended to proceed with detailed regulations in such respect, in order to prevent any controversy from arising, always considering that both contractual parties are required to abide by art. 1176 c.c. which requires the diligence of a good father of a family in fulfilling obligations

 

The most vulnerable party is certainly the lessor, as providing space and third-party equipment may expose him/her to damages due to negligence and theft. Liability for loss or stolen goods belonging to the worker left on desks or inside lockers is hereby excluded. This is why in case of coworking contract the use of a name badge to access the premises is strongly recommended in order to identify who enters the premises and when. Said method protects both the lessor and the users.

Posted by Avv. Francesca Baroncelli Poggi