Italian bill on small and medium-sized enterprises: introduction of certification of compliance for fashion supply-chain

by Elisa Mazzucchelli

The annual bill on small and medium-sized enterprises, presented by the Minister for Enterprise and Made in Italy in agreement with the Minister for Labour and Social Policies, introduces a certification system for compliance in fashion supply-chain. 

In order to obtain the certification of compliance, the lead company and the companies in the supply-chain must comply with the obligations set out in the bill, be up to date with the payment of social security contributions and insurance premiums, and not have been subject to administrative fines for violations of labour and social legislation exceeding 4% of annual turnover in the last three years. 

Furthermore, companies whose owners or directors have been convicted, even if not definitively, in the last five years for violations of labour and social legislation, for crimes against the public administration, against public safety, public economy, industry and commerce, and in relation to income and value added tax, as well as for the offences referred to in Articles 600, 601, 602 and 603-bis of the Italian Criminal Code, are excluded from certification. 
The certification of compliance will be valid for one year, will be issued by auditors and will be recorded in a special register established at the Ministry of Enterprise and Made in Italy. 

The bill also introduces a series of obligations for lead companies that purchase goods or services from suppliers, including: 

  • The maintenance and updating, every six months, of a register of the suppliers. 
  • The adoption of guidelines on the qualification and accreditation, selection, evaluation and monitoring of suppliers defined by the most representative trade associations at national level and approved at ministerial level.
  • The inclusion contractual terms requiring the suppliers (and the subcontractors) to ensure compliance with labour, tax, social security and occupational health and safety regulations. 
  • Acquisition of documentation relating to the supplier, such as: certificate of registration in the register of companies and chamber of commerce registration, self-certification of possession of the technical and professional requirements referred to in Legislative Decree 81/08, DURC, DURF.  
  • Updating of the documentation collected relating to the supplier when the legal deadlines occur or every two years.

An additional obligation for the lead company is the adoption of Organizational Models pursuant to Legislative Decree 231/2001 suitable for preventing, among other things, the offences referred to in Articles 603-bis, 648-bis and 648-ter of the Italian Criminal Code. 

The bill adds, however, that lead companies that have obtained the certification of compliance will be able to benefit from the exclusion of administrative liability of entities referred to in Articles 6 and 7 of Legislative Decree 231/01. In this sense, the provision would therefore seem to introduce a presumption of suitability of the Organizational Models of certified companies. 

For the suppliers the bill provides guidance on the content of contracting or sub-contracting agreements, which must include all the essential elements of the supply, a precise indication of the essential contractual obligations, express termination clauses, corrective measures in the event of omissions, delays or inaccuracies in the performance of the services, aimed at restoring the conditions of legality. These contracts must also include a clause requiring the application of the relevant national and regional collective agreements for the fashion industry and crafts sector, signed by the most representative trade unions at national level, without prejudice to the applicability of company-level trade union agreements that provide for treatment, including economic treatment, that are not overall detrimental, even to subcontractors who entrust the processing of the main client's products, in whole or in part, to third parties.

Through the provisions just examined, the legislator seeks to draw clear lines and provide concrete guidelines that can help companies in the fashion supply chain to recover from the period of crisis that has characterized the sector, partly due to the numerous judicial administration measures that have affected some of the most important Italian fashion houses, precisely because of organisational and control deficiencies that have facilitated the proliferation of suppliers and subcontractors operating illegally. 

The bill is in line with the Protocol of Legality of the Prefettura of Milan signed last May (which we discussed here), which – despite the limited territorial scope of its jurisdiction – had imposed a series of obligations on companies in the supply chain similar to those highlighted above, such as, for example, the collection and updating of documentation relevant to compliance with labour law and health and safety regulations, the inclusion of commitment clauses in procurement contracts and the adoption of codes of conduct and organisational models.