Italy: Employment law reform
International Employment Bulletin contents
- International: Cross-border tele-working
- France: Redundancies in absence of economic reasons
- Germany: holiday days during sick leave
- Italy: Employment law reform
- UK: Post termination restrictions in cross border employment
In March 2012, the Government issued their proposals for the reform of Italian labour law. The draft was approved by the Senate on 30 May and will soon be debated in the Chamber of Deputies, the other chamber of the Italian Parliament. The reforms modify the regulation of employment contracts, reform the consequences of unfair dismissals and provide for a new labour process and a new welfare system.
The main areas affected by the reform are the following:
- Fixed-term contracts;
- Apprenticeship contracts;
- Employment litigation after a dismissal.
Companies will be free to use fixed-term contracts for any reason they wish. Technical/ organisational, production or substitution-related reasons will no longer
need to be provided for fixed-term contracts which last less than 12 months.
The proposed reforms are aimed at making apprenticeships the main way for young people (those aged 29 and under) to enter into the labour market. They stipulate a minimum six-month duration of apprenticeship contracts and establish a ratio of 3 to 2 apprentices compared to the number of qualified employees. This ratio cannot exceed 1:1 in companies which employ fewer than 10 employees. Apprenticeship contracts are (and will be) subject to a competitive social security charge which makes them significantly less expensive than permanent contracts.
The reforms will bring major changes to the regulation of dismissals. The draft reforms Article 18 of the Workers’ Statute and lists the consequences for each type of dismissal. Under current law, should an employee (in a company with more than 15 employees) be unfairly dismissed, he/she would be entitled to reinstatement (which can be substituted at the employee’s request with a payment in lieu of 15 months’ pay) and back pay (from the date of dismissal up to the date of reinstatement; this sum is not capped). The reform will bring an end to automatic reinstatement in the event of unfair dismissal. This will be replaced by a simple payment representing 12 to 24 months’ pay.
The draft reforms also introduce new rules for simplifying and speeding up procedures at the Labour Courts in claims involving a dismissal. The current average duration of cases before the Italian Employment Tribunals is between 12 and 18 months, depending on whether the Tribunal is situated in the north or south of the country. Thanks to the reforms, all employment cases will have a fast-track procedure, with a judge making an initial finding on the dispute and issuing an order within a few weeks.
By Federico Strada, La Scala Studio Legale, in association with Field Fisher Waterhouse LLP (Brussels)