THE CRIME OF ILLEGAL INTERMEDIATION AND EXPLOITATION OF LABOR UNDER ART. 603 BIS OF THE CRIMINAL CODE AND THE APPLICATION OF JUDICIAL ADMINISTRATION UNDER ART. 34 D. LGS. 159/2011

We reproduce the article by our Marco D'Orsogna Bucci found in the third issue 2023 of the ODCEC Work Area Group magazine "Us and Work", https://bit.ly/3DMildc, where the topic of the crime of labor exploitation and the application of judicial administration is discussed.

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The Conference organized by the Order of Chartered Accountants and Accounting Experts of Naples last May 26, 2023 on the topic: "Labor law aspects in companies subjected to seizure and confiscation," was an opportunity to delve into the application of judicial administration in cases related to crimes under Art. 603 bis of the Criminal Code, but above all for an analysis of the critical issues of this rule found in the context of the profession of the consultant who, necessarily, must apply the rule for the purpose of prevention and protection of legality.

"Art. 603 bis of the Criminal Code "the crime of illegal intermediation and exploitation of labor."

Decree Law No. 138 of August 13, 2011 (later converted into Law No. 148/2011) in Art. 12 introduced Art. 603 bis into the Criminal Code, which provides for the crime of illicit intermediation and exploitation of labor. The norm over time has gone through two seasons: a first one of little effectiveness and enforcement, a second one substantially more incisive since the entry into force of Law 199/2016, which makes important changes to Article 603 bis of the Criminal Code.

The norm was created as a response to the rampant problem of agricultural caporalato, and objectively, until its introduction in 2011 very little had been done on the issue. The only norm combating illicit brokering phenomena was Law No. 1369 of Oct. 23, 1960, which was later depowered. A tragic episode that occurred in the territory of the Apulia region, the death of a farm laborer while she was at work in the fields, prompted parliament to initiate a discussion on amending Article 603 bis. With Law No. 199 of 2016, the current version of Article 603 bis took shape.

Law No. 199 of 2016 expanded the offenses beyond exploitative cases, prosecuting the conduct of the employer as a mere user of services and not only in cases of illicit intermediation. The new text provides for the punishment "...with imprisonment from one to six years and a fine of 500 to 1,000 euros for each worker recruited, for anyone who: 1) recruits labor for the purpose of assigning it to work for third parties under exploitative conditions, taking advantage of the workers' state of need; 2) uses, hires or employs labor, including through the intermediation activity referred to in number 1), subjecting workers to exploitative conditions and taking advantage of their state of need..."

The new Article 603 bis of the Criminal Code also identifies, modifying the previous version, the indices of exploitation in the presence "...of one or more of the following conditions: 

1. the repeated payment of wages in a manner manifestly different from the national or territorial collective agreements entered into by the most representative trade unions at the national level, or in any case disproportionate to the quantity and quality of the work performed;
2. the repeated violation of the regulations on working hours, rest periods, weekly rest, mandatory leave, vacations;
3. the existence of violations of regulations on safety and hygiene in the workplace;
4. the worker's subjection to degrading working conditions, surveillance methods or housing situations." 

Blatant deviation from collective bargaining as an indication of exploitation

It constitutes an index of exploitation, therefore, the existence of even one of the conditions identified above by the norm. The professional who supports the company in personnel management and administration cannot escape the delicacy of the issue, but above all how blurry the boundary is between criminal assumption and not.

There is no doubt that the rule does not help in defining a certain boundary between illicit and licit labor, between genuine and illicit intermediation. The terms used leave ample room for interpretation and risk. The reiteration of a conduct, from the vocabulary of the Italian language, is nothing but a repetition (even once) of the same conduct (Voc. Treccani "Doing the same thing again, replicating it, repeating it").

Law No. 199/2016 is subsequent to the entry into force of the Jobs Act's legislative decrees, so the failure to refer to Article 51 of Legislative Decree No. 81/2015 in the context of the relevant collective bargaining agreement does not escape. Probably with the explicit desire to exclude any reference to company bargaining, Art. 603 bis c.p. in regulating one of the indices of exploitation refers to a blatant divergence from "...national or territorial collective agreements entered into by the most representative trade unions at the national level..." The reference to only the territorial (in addition to the national) level of bargaining is an explicit condition for the application of territorial bargaining in those sectors where it has significant incidence especially in the pay part, such as Agriculture and Construction and, as it happens, precisely in areas of strong presence of illicit exploitation and labor brokering.

But it is equally true and legitimate to ask: by which collective bargaining agreements is the blatant dissimilarity to be measured? Which unions are the most representative at the national level? We are well aware that since 2011 (Interconfederal Agreement of 06/28/2011) in our country we have been trying to compose a "ranking" of representativeness, and so far we are proceeding by presumptions, waiting for the completion of the certification process of union representation scheduled to date for July 2024.

We are met with the so-called "circulatory law," as far as it can be effective in criminal cases. The National Labor Inspectorate in its February 28, 2019 Circular No. 5, states, "...it is considered useful to clarify that reiteration is to be understood as repeated behavior with respect to one or more workers, even in cases where the recipients of such remuneration are not always the same due to possible turnover. Moreover, the reference to collective bargaining agreements is evidently to be understood as contracts signed by the "comparatively" most representative organizations, which is an element of greater guarantee for workers. This is also due to the fact that every other provision of law enacted in recent decades, which requires the application of collective agreements for various purposes, expressly refers to contracts signed by the "comparatively most representative labor organizations at the national level...."

We take the National Labor Inspectorate's "suggestion" at face value, but one would wonder whether contracts signed by comparatively more representative trade unions always have the gift of legitimacy in every respect, including pay. Looking at the case of the Ccnl Vigilanza privata some doubt can be raised (see Court of Appeals of Milan 580/2022, 673/2022).

Paradoxically, we could have a "penal" compliance with collective bargaining in the case of the Ccnl Vigilanza Privata with hourly pay at 5.66 euros (monthly pay 980 euros on monthly divisor 173), although not sufficiently congruous under Article 36 of the Constitution.

What is the dividing line between lawful and unlawful? "Blatant deviation" from collective bargaining does not express a numerical concept. When can we consider the payment of wages to be blatantly dissimilar? Is 50 cents an hour from the contractual minimum sufficient? Should only the basic pay be considered or also the other allowances provided for in the collective bargaining agreement? Is the nonpayment of fourteenth month's pay, for example, blatant dissimilarity? Can we reason in the terms in which case law has already expressed itself regarding just pay under Article 36 of the Constitution? Certain answers we have none.

And again, from the point of view of intersectoral areas, 1,000 euros per month is compliant in the area of domestic work where people work up to 52 hours per week, while in logistics it is blatantly different. The pay of an agricultural laborer working in Molise is compliant at 7.50 euros per hour while in Lombardy it is at just over 10.00 euros, applying territorial labor bargaining. 

Clearly, there is no quantifiable numerical parameter that measures the boundary between lawful and unlawful labor, whatever the sector, whatever the type of contract. The norm does not come to our rescue; it does not identify a parameter, be it hourly, daily or monthly.  

The materialization of taking advantage of the "state of need" 

The condition of exploitation to which can be traced through the indices indicated by Article 603 bis of the Criminal Code must also be accompanied by the situation of taking advantage of the "state of need." A condition also with blurred boundaries, but above all easily found in a situation in which the parties are, by definition, of different contractual strength. 

For completeness, wishing once again to rely on the practice, again the National Labor Inspectorate with Circular February 28, 2019 No. 5 on the point: "...as for the taking advantage of the state of need of workers, it is possible first of all to recall the case law that has deepened the notion, albeit in relation to other cases of crime. In particular, this element represents one of the aggravating circumstances of the crime of usury (Article 644 of the Criminal Code), which occurs when the illegal conduct is carried out "to the detriment of those in a state of need."

Preliminarily, as far as "taking advantage" is concerned, the same can be considered ascribable to the exploitation in one's own favor of the situation of weakness of the victim of the crime, for which an awareness that one party has of the imbalance between the contractual performances is sufficient (see Cass. civ., sent. 1651/2015). Regarding the "state of need," it is believed that we can first of all adhere to that jurisprudential orientation that has clarified that "the 'state of need' of the offended person (... ) cannot be traced back to a situation of dissatisfaction and frustration resulting from the impossibility or economic difficulty of realizing any need perceived as urgent, but must be recognized only when the offended person, even without being in a state of absolute indigence, is in a condition, even temporary, of actual lack of suitable means to meet needs defined as primary, that is, relating to goods commonly considered as essential for anyone" (Cass. pen, sent. no. 4627/2000). This element of the offense has also been traced to "a psychological condition in which the person finds himself and for which he does not have full freedom of choice" (Cass. pen., sent. no. 2085/1993) and "is not identified with the need to work, but presupposes a state of necessity that tends to be irreversible, which while not absolutely annihilating any freedom of choice, involves a pressing nagging, such as to strongly compromise the contractual freedom of the person" (Cass. pen., sent. no. 10795/2016). As later clarified, this element too - as it is indispensable for the application of Article 603 bis of the Criminal Code - will have to be the focus of the inspection personnel, who will therefore have to provide the relevant evidence. However, the investigative activity will be all the easier to carry out the more evident the state of "social weakness" of the workers, which is not infrequently the case in relation to the employment of often non-EU foreign personnel...." 

Reading the decrees of disposition of judicial administration under Art. 34 of Legislative Decree No. 159/2011 related to crimes under Art. 603 bis of the Criminal Code, gives us a snapshot of how easy it is to find the state of need in the context of labor relations, as indigence does not necessarily have to be found. As a basis for the requested precautionary measures we find, in fact, statements by workers such as, "...I could not complain because the salary was necessary for me to support my family...," again, "...I never made protests about these mistakes because since I did not have a permanent contract I was afraid that they would not renew my contract...," in another case, "...in the envelopes there were always hours missing, I did not complain because I was afraid of being left at home...."

Article 34 of Legislative Decree No. 159/2011

With the enactment of Law 161/2017, significant changes are made to the Code of Anti-Mafia Laws and Prevention Measures (Legislative Decree 159 of September 6, 2011). One of these is the inclusion in Article 34 of Legislative Decree No. 159/2011 of the provision of judicial administration in cases related to 603 bis of the Criminal Code. When there are sufficient indications that the free exercise of economic, entrepreneurial activities may facilitate the activities of persons subject to criminal proceedings for the crimes referred to in Article 603 bis of the Criminal Code, the competent court, for the application of preventive measures against the aforementioned persons, shall order the judicial administration of companies or assets that can be used for the conduct of their economic activities. 

The first prerequisite for the application of the measure is identified in the existence of sufficient evidence to believe that the free exercise of certain economic activities, including those of an entrepreneurial nature, has an auxiliary and facilitative nature in relation to another activity carried out by a person defined as "facilitated." This is a substantial change from the previous version of Article 34 in that it changes from "evidence" to "sufficient indicia," thus lowering the evidentiary standard for ordering judicial administration.

The subject "facilitated" by the economic activities of a "facilitating" subject must belong to one of the two categories of subjects identified by the legislature: 1) those to whom a personal or patrimonial measure of prevention has been proposed or applied; 2) persons subject to criminal proceedings for any of the predicate offenses identified in the same; these include the case referred to in Article 603 bis of the Criminal Code.

The "facilitator" subject, within the framework of the discipline ex art. 34 D. Legislative Decree No. 159/2011, on the other hand, carries out an auxiliary activity, not necessarily of an illicit nature being only sufficient that with his economic activity he has facilitated the subjects under criminal proceedings. In addition, in the facilitator's head there must not be elements to apply a preventive measure to him. The "facilitator" subject, therefore, moves in the sphere of guilt, negligence, without crossing the threshold of full awareness or malice where there would be a risk of hypotheses of complicity in the crime, but also judicial commission under Article 15 of Legislative Decree No. 231/2001 applicable since the criminal activity is carried out in the interest of the company.

Law No. 199/2016, in fact, in addition to introducing the substantive amendments to Article 603 bis of the Criminal Code, includes the case itself among the predicate offenses under Legislative Decree No. 231/2001 on the administrative liability of entities in Article 25 quinquies "Crimes against the individual." Consequently, the entity is also liable for the crime of illegal intermediation and exploitation of labor when it is committed in its interest and advantage.

Hence the importance of the adoption of organizational models of organization, management and control, but above all the adoption and implementation of procedures suitable to prevent the commission of crime. Some of the most striking cases of judicial administration include the logistics giant CEVA Logistics Italia srl, whose measure was applied by the Court of Milan in May 2019, the first in Italy after the 2017 reform of Article 34 of Legislative Decree No. 159/2011, after an investigation by the Pavia Public Prosecutor's Office led to the issuance of precautionary custody orders against directors, senior figures of cooperatives, companies and consortia linked to the logistics multinational by contracts for the performance of contracted services.

In a decree issued on Feb. 13 and filed on Feb. 24, 2020, the Court of Milan ordered the revocation of the preventive measure of judicial administration of subcontracting activities applied to CEVA Logistics Italia srl on May 6, 2019.

According to the court, in fact, "...in terms of the revision of the organizational model of management and control, the company in receivership has observed the entire prescriptive period in point of revisiting and actualizing the project and as such also the goal of return to legality had to be considered achieved..."

In November 2019, the Company's Board of Directors approved the new organizational model 231, the new procedure for selecting, qualifying and monitoring counterparties specializing in the provision of logistics services. In addition, the Board of Directors also took note of the new body of procedures, which was updated and revised to bring it in line with the current organizational chart, as well as the revision of internal control systems, aimed at improving labor contract management procedures.

Conclusions

Let it be understood, exploitation of labor is one of the most despicable and deplorable crimes, unfortunately, with evidence on a large scale in sectors historically high in illegalities, such as agriculture and construction, but also on the rise in other economic activities especially in the tertiarization of non-core business phases, the gig-economy, tourism and catering, transportation and logistics. The analysis of critical issues that emerged from the in-depth study should be declined with respect to situations on the borderline between legality and illegality, often the result of mala gestio or even negligence. Far from justifying unscrupulous behaviors and real cases of exploitation of human beings, it is also necessary to note the limits and criticalities of the norm and to take them into account with extreme prudence in the context of our daily activity of advising our clients, right from the phase of framing and choosing the applicable collective bargaining, but also in the adoption of appropriate controls in the supply chains, in contracts. In the opinion of the writer, Article 603 bis of the Criminal Code could be the perfect norm to accommodate an objective, certain and unique parameter of "minimum wage." The identification of a gross hourly wage limit, valid for both subordinate, parasubordinate and self-employed work, could provide a margin of certainty at least with respect to the index of wage exploitation, leaving the reference to collective bargaining to areas other than criminal law.

 

Edited by: Marco D'Orsogna Bucci, Chartered Accountant of Labor and Statutory Auditor

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For more information:

marcodorsogna@valoreassociati.it