Joint Liability in Contracts: Implications Within the Supply Chain and Protective Measures for the Principal

The Problem of Risk Predictability

The liability regime established by Article 29, paragraph 2, of Legislative Decree No. 276/2003 — as previously anticipated — is not without critical aspects. While it is true that this system, also deriving from European principles, was designed to ensure greater protection for workers employed within procurement relationships, it is equally true that, in its practical application, it may impose particularly burdensome consequences on companies, especially those operating within the supply chain.

Indeed, one of the most problematic aspects concerns the absence of a quantitative limitation on the economic exposure of the principal/contractor, who may be required to pay substantial amounts arising from wage, social security, or contribution omissions actually attributable to a third party, solely by virtue of belonging to the same production chain.

This is therefore a risk that may prove not only disproportionate compared to the value of the individual contract, but also often exceeds any reasonable economic forecasting. The law, in fact, does not provide any concrete mechanism allowing the principal or contractor to determine in advance the maximum level of exposure potentially arising from the contractual relationship.

In this respect, the DURC (Single Social Security Compliance Certificate) plays a significant role as the main instrument through which the principal may generally verify the social security compliance of the contractor or subcontractor. Nevertheless, the DURC alone is not sufficient to definitively exclude the risk of subsequent contribution or wage omissions, since it merely reflects a specific situation during a limited timeframe, without guaranteeing that, throughout the performance of the contract, the employer will fully comply with its obligations towards workers and social security institutions.

The issue becomes even more evident within supply chains, precisely because the high number of workers involved and the often limited profit margins make direct and constant supervision by the principal/contractor particularly burdensome.

When compared with other European legal systems, the current formulation of Article 29, paragraph 2, of Legislative Decree No. 276/2003 raises significant concerns in terms of reasonableness, proportionality, and balance between labor protection and freedom of economic initiative. This is not intended to question the protective purpose of the provision itself — which is certainly legitimate insofar as it seeks to prevent outsourcing processes from undermining wage, contribution, and social security guarantees. What is relevant here, rather, is the manner in which this objective is pursued, namely the absence of concrete mechanisms capable of balancing worker protection with the risks borne by entrepreneurs.

Indeed, this joint liability regime cannot result in the imposition of an unlimited financial burden upon the principal/contractor who lacks effective means to control the defaults of third parties.

To this must also be added the issue relating to Delegated Law No. 30/2003. The so-called “Biagi Reform” was inspired by the objective of modernizing the labor market through forms of regulated flexibility capable of balancing the need for companies to compete within international markets with the need to safeguard and enhance labor protection. From this perspective, the introduction of a joint liability regime lacking quantitative limits and potentially exposing companies to unforeseeable and incalculable risks raises questions regarding the consistency of the delegated legislation with the principles and objectives of the enabling law.

Law No. 30/2003 was enacted, in fact, with the aim of outlining a labor market reform inspired by “the guidelines developed at European level within the framework of the so-called European Employment Strategy” intended to modernize the labor market through the introduction of regulated and collectively negotiated flexibility capable of balancing business competitiveness with the indispensable need to protect and enhance labor.

However, the introduction of such a broad and invasive joint liability regime does not appear consistent with these objectives, nor with the aim of promoting an orderly process of employment and labor market modernization. Furthermore, with specific reference to procurement contracts, the enabling law referred to joint liability only in a particular circumstance and within precise limits. Article 1, paragraph 2, letter p), no. 3, expressly provided for a joint liability regime “within the limits set forth under Article 1676 of the Italian Civil Code” solely in cases where the procurement contract was connected to the transfer of a business unit.

The provision therefore undoubtedly intended to strengthen worker protection, but always within the broader principle of contractual balance. The delegating legislator had deliberately limited the scope of intervention by expressly referring to the limits established under Article 1676 of the Italian Civil Code. From this perspective as well, questions arise regarding the compatibility of Article 29, paragraph 2, of Legislative Decree No. 276/2003 with Article 76 of the Italian Constitution on the grounds of excessive delegation, considering that compliance of delegated legislation with the enabling law constitutes a condition for the validity of the legislative decree itself.

These critical aspects become even more apparent when compared with other European legal systems. Although joint liability is mandatory within the construction sector, Member States may extend this regime to other sectors as well. However, comparative analysis shows that the main European systems generally accompany joint liability with quantitative limits, preventive verification tools, exemption mechanisms, or liability criteria based upon the diligence of the principal.

In Spain, for example, a liability regime for principals and subcontractors exists, but exemption is possible where certification confirming the contractor’s compliance with social security obligations has been obtained.
Similarly, under Austrian law, the liability of the principal is limited through predetermined quantitative thresholds, with liability in certain cases being calculated as a percentage of the compensation due for the work performed.

In Germany, legislation governing social security contributions provides for the liability of entrepreneurs regarding contributions owed by contractors within specific sectors, but allows exemption where the principal demonstrates that it could reasonably assume that the contractor would comply with its obligations by verifying its reliability, competence, and financial capability or through certification mechanisms.

Particularly significant is also the French model. Under French law, joint liability within contractual chains is governed by the Labour Code in the context of anti-illegal labor provisions and is based upon a system of monitoring and due diligence obligations imposed upon principals and contractors with respect to their counterparties. Only where such control and supervisory obligations are breached may the principal be held jointly liable for wage and contribution obligations of the contracting company. Conversely, where the principal proves that it carried out all checks required by law, liability may be excluded.

What these systems have in common is clear: in most European jurisdictions, joint liability is not structured as an automatic and unlimited exposure but is accompanied by mechanisms allowing diligent principals to prevent, limit, or exclude liability. The Italian system under Article 29, paragraph 2, of Legislative Decree No. 276/2003, by contrast, appears significantly more rigid, as it neither provides quantitative limitations nor allows principals to avoid liability simply by demonstrating that all reasonably required checks were performed.

How Can Companies Protect Themselves? Correct Qualification of the Relationship and Risk Prevention Tools

With regard to the self-protection measures concretely available to principals or contractors, one remedy frequently adopted in practice consists of suspending payments to subcontractors or suppliers following an assessment by INPS regarding failures to fulfill wage or contribution obligations. Such a choice, although theoretically justified by the need to avoid the accumulation of further social security liabilities, may prove difficult to implement in practice, since it risks disrupting the entire production chain.

For this reason, the management of risks related to joint liability in procurement contracts cannot be addressed only during the pathological phase of the relationship, but requires preventive action beginning with the correct legal qualification of the contract itself.

In commercial practice, parties frequently resort to improper contractual definitions, using expressions such as “transport contract,” “logistics services,” “integrated logistics,” or “service agreement.” Such labels, however, are not in themselves sufficient to exclude the application of procurement contract regulations where the relationship, as concretely organized and performed, presents the typical characteristics of procurement.
What matters in this respect is not the nomen iuris adopted by the parties, but rather the actual modalities of performance, the organization of means and workforce, the continuity of the service, and the assumption of entrepreneurial risk by the economic operator.

On this point, the Italian Supreme Court recently ruled through Judgment No. 22541 of August 4, 2025, reiterating that the distinction between certain contractual categories — such as transportation agreements and transport service procurement contracts — may be particularly subtle and must be identified not solely on the basis of the material activity of transporting goods, but rather considering the manner in which such activity is integrated into a broader, stable, and continuous organizational structure.

Consequently, where the relationship consists merely of the execution of individually identified transport operations, the rules governing transportation contracts may apply. Conversely, where the assignment consists of a planned series of services performed continuously within a more complex service framework and involving the achievement of a specific result, qualification as a procurement contract becomes far more likely, with the consequence that only in the latter case would the joint liability regime under Article 29, paragraph 2, of Legislative Decree No. 276/2003 apply.

Indeed, the legal framework governing transportation contracts does not necessarily coincide with that applicable to procurement contracts. Transportation relationships are governed by specific rules, including those concerning the verification of the carrier’s compliance, whereas procurement contracts are subject to the more stringent joint liability regime established under Article 29 of Legislative Decree No. 276/2003.
Understanding from the very beginning — already during contract drafting — which legal regime effectively applies, while avoiding the use of standardized contractual models as frequently occurs in practice, is therefore fundamental for companies wishing to assess in advance the risks to which they may be exposed and intervene before such risks result in inspections or litigation.

This need becomes even more significant within integrated logistics, transportation, and, more generally, all relationships characterized by complex supply chains, where the plurality of parties involved makes it increasingly difficult to identify and manage the effective allocation of responsibilities.

Starting precisely from the correct qualification of the relationship and from awareness of the risks connected with joint liability, principals and contractors may implement a series of organizational and supervisory measures aimed at reducing social security and contribution-related exposure.

In this perspective, not only periodic documentary checks concerning the wage and contribution compliance of contractors and subcontractors become relevant, but also the implementation of effective supply chain monitoring systems through procedures capable of ensuring traceability and control throughout the entire chain.

Equally important may be the adoption of organizational and control models pursuant to Legislative Decree No. 231/2001, especially within business environments characterized by complex corporate structures or articulated supply chains. Although such models are not capable of automatically excluding joint liability under Article 29 of Legislative Decree No. 276/2003, they may certainly contribute to strengthening internal control systems, risk management, and traceability of performed checks.

It remains clear that none of these instruments alone is sufficient to completely eliminate the risks arising from joint liability within procurement contracts. Nevertheless, a correct structuring of the relationship from the outset, combined with constant operational and documentary monitoring of the supply chain, may significantly reduce a company’s economic, social security, and contribution-related exposure, allowing intervention before the risk materializes into inspections or litigation.

Studio Legale de Capoa