On March 30, 2023, a ruling from the Court of Appeals of Venice introduced key changes to labor law by stating that a service contract was not proper because the workers used for the service were allegedly subject to hetero-direction by the principal’s software. The use of software to manage the employment relationship is the new aspect of this ruling.
First, the court established that the focus is the way employees of the contracting company were organized at work. The court found that, contrary to the principal’s claim, it had not exercised mere coordinating activities. Instead, work activities were communicated to the contracting company’s employees by means of software. This was deemed management activity.
The court pointed out that the principal used software to manage the activities of workers. Indeed, the software accompanied employees throughout performance of their work. By matching a bar code (and later a voice) with an identification code, the employee was constantly monitored remotely during work activity using a synthetic voice processed by the client’s software. This voice guided workers during their shifts.
The court found that managers of the contracting company were not the actual organizers of the service activity but as individuals merely delivered the orders of the apparent principal without in any way impacting identification of activities, the way they were carried out, or the timing of the work. The contracting company merely sent several people appropriate for the type of daily work (i.e., the number of packages to be handled) determined by the principal, resulting in an unlawful staff-leasing of employees.
In conclusion, the court noted that the software constituted hetero-direction in that the work program could be directly and exclusively traced to the principal, with the managers of the contracting company not intervening at any stage. The software, therefore, was not merely a work tool, but a mode of exercising the employer’s managerial power. In this new scenario, the natural person in charge of the powers of management and coordination was simply replaced by a program. That is the new legal aspect at the heart of this case.