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Labour market reforms in Italy

Between 2014 and 2015, the Italian Government issued several legislative measures to reform the labour law (the so-called “Jobs Act”). The reform was criticised by opposition parties and by some Italian trade unions because of its impact on the labour market. However, the international economic institutions welcomed the reform aimed at supporting the economic recovery and the modernisation of Italy.

The main reforms

  • The first legislative measure of the labour market reform dates back to 1997. It was the law no. 196 of 1997 (the so-called “Treu Package”) proposed by the Labour Ministry of the Prodi government. The reform introduced temporary work, with specific reference to coordinated and continuous collaboration, by focussing mainly on apprenticeship and temporary work. The goal was to promote employment in Italy by providing different types of flexible work contracts.
  • With law no. 30 of 2003 (the so-called “Biagi Law”), enacted by the centre-right government, new forms of flexible work were introduced, such as the job on call and the project-based contract, which is a type of contract with no subordination constraints and linked to project implementation. The project-based contracts drastically limited workers’ rights, by not providing for holidays, sick leave, maternity leave and days off.
  • The other major reform of the labour market was implemented by law no. 92 of 2012 under the Monti government. The main changes concerned the contract of salaried employment, social safety nets and the dismissal regulations.
  • Concerning individual dismissals, in the case of dismissals due to economic hardship (ie. economic dismissals) the reinstatement in the workplace, provided for before the reform, was substituted by a severance pay, based on the age of the worker and the years of service.
  • With regard to collective dismissals, they are allowed by law under certain conditions, due to organisational reasons (cutbacks, company changes or termination of activities) within companies with more than 15 employees, as long as the information and consultation procedure with trade union representatives is complied with. Before Labour Minister Fornero’s reform, irregularities in the procedure allowed for the annulment of dismissals and the reinstatement in the workplace. With the “Fornero Reform”, however, the wrong procedure can be remedied in the framework of a trade union agreement, without reversing the dismissals.
  • Fornero’s law introduced also two new social safety nets (the so-called ASPI and mini-ASPI), which refer to the economic benefits provided for employees who involuntarily lose their jobs.

Recent reforms

          The Jobs Act

  • The most recent labour market reform – the so-called Jobs Act - was enacted by the Renzi government in 2014. The act no. 183 of 10 December 2014 entered into force on 16 December 2014. Its main purpose was to bring greater flexibility to the labour market through favourable measures addressed to companies and aimed at increasing employment.
  • Before the enabling act of 10 December 2014, the decree law no. 34 of 30 March 2014, the so-called “Poletti Decree” passed into law on 16 May 2014, was adopted in order to modify fixed-term and apprenticeship contracts. In Italy, it was possible to renew a fixed-term contract of employment, providing for a new deadline, as long as it was justified by objective reasons. With the Poletti Decree, the deadline for these types of contracts could no longer be justified by technical, organisational or productive requirements. With reference to these statutory provisions many actors argued that these measures led to a withdrawal of workers’ protection, compared to the provisions of the European framework agreement on fixed-term work.
  • In 2015, the following decrees of the enabling law no. 183 of 2014 were adopted. The legislative decrees nos. 22 and 23 of 4 March 2014 concerning social safety nets and the introduction of so-called “permanent contracts at increasing protections”. In the first case, the measure introduced to the Italian legal system new social benefits to cope with involuntary unemployment: among the most important provisions, it covered workers with project-based contracts. The second legislative measure identified the permanent employment contract as the privileged type of contract, from the date of entry into force of the decree, with the possibility of tax relief for companies. The purpose of the reform is to make employment more stable.
  • Two additional decrees (numbers 80 and 81 of 15 June 2015) were adopted. They addressed the reconciliation of family care, work and private life for working mothers, by extending to self-employed women the opportunity to take advantage of parental leave, and by introducing measures of temporary job leave for women who have been victims of violence; the second addressed the regulation of tasks, by recognising the employer more bargaining power in unilaterally amend contract conditions. Decree no. 81/2015 abrogated the project-based employment contracts, introduced by the Biagi Reform.
  • Finally, the last four legislative decrees nos. 148, 149, 150, 151 of 14 September 2015 completed the reform of the Jobs Act. Innovations have been introduced in terms of workers’ health and safety protection at the workplace and risk assessment, by stipulating penalties for employers who fail to comply with their obligations prescribed by the Consolidated Law on Safety (Testo Unico sulla sicurezza); the introduction of arrangements for employee remote control through the use of electronic equipment only for organisational purposes and to safeguard workers’ safety and company's assets (after agreement with trade union representatives). Even the matter of voluntary resignation has been addressed in order to face the practice of so-called blank resignations, by providing a more complex procedure for guaranteeing the authenticity of such statements.