On March 6th, 2015, the Italian Parliament conclusively approved a legislative decree concerning permanent employment agreements (“a tempo indeterminate”), which provides additional protective measures (“tutele crescenti”) according to the employee’s seniority.

On the same day, the Council of Ministers also approved, on a preliminary basis (“in esame preliminare”): (i) a legislative decree which envisages a simplified summary of the employment agreements forms and the revision of employees’ duties; and (ii) a legislative decree focused on day-life and working times.

  1. The Decree on Permanent Employment Agreements with Protective Measures

Single dismissals:

  • The agreement applies only to workers who were employed under a permanent agreement after Decree 1 was passed. In addition, Decree 1 establishes a new discipline of individual and of collective dismissals (while the former legal regime continues to apply to workers that were employed before the Decree was passed).
  • Discriminatory dismissals or those considered invalid as the employee was notified in oral form, are still entitled to full reinstatement.
  • Disciplinary dismissals are entitled to reinstatement only if the alleged event has never actually been verified (“insussistenza del fatto”).
  • For “unjustified dismissals,” cases in which the dismissal occurs without just cause or justification, the Decree introduces a fixed compensatory protection depending on the seniority of the employee, thus eliminating any discretion from the judge in assessing the employee’s compensation. The compensation is two months’ salary per year with the following limits:
    • If the employee is dismissed after one year, the compensation is equal to four months’ salary; if the employee is dismissed after two years, the compensation is equal to four months’ salary; if the employee is dismissed after three years, the compensation is equal to six months’ salary until 12 years of work at which point the employee receives compensation indemnity equal to 24 months’ salary. After 12 years, compensation is capped at 24 months’ salary.
  • Preferential conciliation is available if the parties want to avoid trial (“conciliazione incentivata”). Within 60 days from the date on which the employee is entitled to challenge the dismissal, the employer can offer the employee an amount equal to one monthly salaries for each year of work with a minimum of a compensation of two months’ salary up to a maximum of 18 months’ salary, which is not subject to both fiscal and social security contributions. The acceptance of by the worker in a formal settlement agreement implies the extinction of any future claims.

Collective dismissals:

  • In the event of a breach of procedure (Art. 4, Paragraph 12 of the Law No. 223/1991) or the selection criteria (Art. 5, Paragraph 1), the same monetary compensation provided for the individual dismissals (from a minimum of four to a maximum of 24 monthly salary) is applied.
  • In the event of a collective dismissal filed without any written notice, the remedy is the reinstatement, similar to the individual dismissals.
  • For small businesses (“piccole imprese”), reinstatement applies in cases of discriminatory dismissals or null dismissals (i.e. notified in oral form). In the remaining cases of unfair dismissal, the compensation is equal to one months' salary per year of work with a minimum of two up to a maximum of six months’ salary.
  1. The Legislative Decree reorganizing the employment relationship
  • Per project agreements (“Co.Co.Pro.”). From the date of the entry into force of Decree 2, it is no longer possible to start new project agreements (those already pending will continue up to their expiration date). All agreements complying with the requirements of the employment relationship will be converted into permanent employment agreements.
  • Agreements executed under article 2549 and following civil code (“Associazione in partecipazione con apporto di lavoro”) and job sharing are superseded by the new Decree and are no longer applicable.
  • The following agreement forms are confirmed:
    • Fixed-term agreement. No substantial changes occurred.
    • Supply agreements. There is no longer the need to have a specific reason (the so called “causale”) to execute permanent supply agreements (staff leasing), allowing the company to benefit from the availability of additional temporary employees. However, temporary employees under permanent supply agreements can make up no more than 10% of the total staff.
    • Apprenticeship. The decree simplifies apprenticeship forms of first level (workers with a diploma and/or other professional qualification) and third level (high-level, educated workers and researchers) employees by reducing overall costs for employers to promote the such agreements in compliance with provisions concerning the school/work alternation.
    • Part-time. In the case of lack of specific provisions by the applicable collective agreements, the decree sets the limits and the modalities according to which the employer may require the worker to carry out additional work; alternatively, the parties may agree on clauses that allow variance in working times (i.e. afternoon rather than morning) or allow increased working hours.

In addition, for sick or parental leave, the decree allows a worker to change their status from full-time to part-time employee. 

  • Duties. If there is a corporate restructuring or reorganization process, identified by collective agreements, the company may increase the duties of a worker by one level without modifying his/her salary (except for additional compensation related to specific modalities of work).
  1. Conciliation of the times of day-life and work 
  • This decree relates to compulsory maternity leave, granting the mother the possibility of obtaining a leave if special circumstances occur, such as the premature birth or hospitalization of a newborn. In the first case, compulsory leave days that are not taken before birth are added to the period of post-partum maternity leave, even when the sum of the two periods exceeds the overall statutory limit of five months total provided by the law; in the second case, the decree allows for the suspension of the maternity leave if a medical certificate attests the good health of the mother. Both solutions are aimed at supporting the mother-child relationship without sacrificing the health of the mother.
  • The decree provides for a maximum extension of parental leave from the current eight years up to 12 years of the life of the child. The partially-paid parental leave (30% of the salary) is raised from three years to six years; the non-paid parental leave is, raised from six years to 12 years. A similar provision has been implemented for adoption or custody situations. In these cases, parental leave can be taken from the moment the child is introduced into the family.
  • Paternity leave is extended to all categories of workers and applies in case the mother is unable to benefit from the leave for natural or material causes.  The decree also introduces new provisions to protect adoptive and custodial parents, providing a series of extensions of protective measures already in place for natural parents.
  • In addition, the decree contains also two innovative provisions concerning remote working and gender-based violence on women:
    • The first provision on remote working provides benefits for telecommuters, in order to meet their parental care needs. Telecommuters who fall into this category are not calculated in the overall number of employees to which such benefit is granted according to the laws or private agreements;
    • The second provision introduces a specific form of leave for women who are victims of gender-based violence and are enrolled in duly-certificated protection programs, allowing them to abstain from work for a maximum of three months in order to comply with the requirements of such programs, during which time they can still collect their entire salary, including holidays and of all of the other items included within the employee’s compensation. The right to change from full-time to part-time employee at worker’s request is also allowed.