After negotiations lasting for months, an employment reform has finally been approved in Italy. Law. No 92/2012 comes into force on 18 July 2012 and introduces several changes to employment law, relating to dismissals, fixed term contracts, temporary contracts, freelance contracts, unemployment benefits and other related topics. This briefing focuses on the changes to fixed term contracts.
The changes will allow employers hiring new recruits to offer employment on a fixed term contract of up to 12 months without having to indicate the reasons for engaging on a fixed term, as opposed to permanent basis. This freedom from specifying the reason for hiring under a fixed term contract also applies in specific cases provided for by collective bargaining agreements.
Prior to 18 July, existing legislation only permitted the offering of fixed term employment if technical, productive, organisational or substitutive reasons existed. This was so regardless of the duration of the fixed term. Such reasons had to be specified in the written fixed term contract; a failure to do so risking the employment being deemed indefinite and thereby exposing the employer to potential dismissal claims when terminating the employment.
This change aims to introduce some flexibility into the labour market by enabling employers to hire fixed term employees for a maximum period of 1 year without facing the risks associated with the termination of employment under the Italian Law.
Notwithstanding the above changes the requirement of establishing a technical, productive, organisational or substitutive reason remains applicable for fixed term appointments exceeding one year, albeit there is limit on any such appointments of 3 years.