1. Not so fast. The Italian Parliament has enabled the Government to issue a series of labour law reforms over a period of six months. It is useful to look at some of the approved guidelines in order to understand the evolution of the new legislation.
  2. Fewer types of contracts. The different categories of employment contracts will be re-arranged, reduced and simplified. The so-called “project contract,” a form of quasi-subordinate contract often used as a “grey area” between actual freelance contracts and subordinate employment, might be abolished.
  3. Easier dismissals. The labour reform approved back in 2012 by Mario Monti’s government dramatically reduced the application of the reinstatement remedy in case of unlawful dismissal grounded on redundancy. The new legislation will go further. The only remedy for this kind of dismissal will be monetary compensation. Forced reinstatement will be possible only if the dismissal is grounded on discriminatory or retaliatory reasons, or in the case of disciplinary dismissal based on a false accusation. In the latter case, however, the Government is planning to introduce an “opting out” system, which would allow the employer to pay an additional compensation to the dismissed employee in lieu of forced reinstatement.
  4. How much? For the newly hired, compensation for unlawful dismissal will be less than the current allowance, which is from 12 up to 24 months’ salary. The new (lower) compensation allowance for the newly hired is likely to be 1.5 months’ salary per year of service, according to the indications in the Government plan. In addition, courts will lose discretionary power to determine the amount of compensation, thereby enabling employers to calculate the potential maximum cost of a dismissal.
  5. Duties. In the event of a corporate restructuring, as an alternative to redundancy, an employer will be allowed to unilaterally change an employee’s duties, even if the employee does not agree. In addition to the corporate restructuring scenario, a collective bargaining agreement can in other cases give rise to the right for an employer to unilaterally change an employee’s duties.
  6. Big brother. Using any kind of technology to monitor employees at work is in principle forbidden, but the rules regarding the use of security video surveillance systems are flexible. A wide range of technologies can be used to pursue legitimate aims, such as, for example, security, communication, fleet management or commercial efficiency. Under the current legal framework, if the technology in question results in the monitoring of employees, then prior to usage, an agreement with the unions, or, alternatively, with a public authority, is required. Moreover, Italian case law indicates that a monitoring device is a broad concept, which includes not only video cameras and other commonly used surveillance systems, but also some types of management software and telephone tracking systems. The new legislation will provide a refined and more modern definition for monitoring device, which is likely to list specific technologies defined by law as legitimate.
  7. Social shock-absorber (Cassa integrazione guadagni or “CIG”). CIG is the State-funded resource for companies needing to put employment contracts on stand-by because of a corporate restructuring. In the current legal framework, only companies operating in certain sectors can tap into this support. The new legislation will open this benefit to companies operating in a wider list of industry sectors. However, this special fund will operate only as a last resort, when the company is unable to manage the crisis by implementing other solutions, such as reductions in hours worked or usage of holiday days. The resource will not be available to companies that are winding down. At the same time, unions and employers’ associations may create other private funds having the same “social shock-absorbing” function. The new legislation will define a list of reasons for having access to the funding that are defined by law as legitimate, eliminating the current area of uncertainty.
  8. Unemployment pay (“Assicurazione per l’impiego”, or ASPI). Certain categories of non-subordinate employees will have access to unemployment pay, which will be determined according to the employee’s contributions during his or her working life. The unemployment pay will be conditioned upon the worker’s acceptance of other possible work opportunities or social work.
  9. Fixed-term contracts. Fixed-term contracts have recently been made more flexible. For example, it is now possible to insert an expiration date to a new contract without having to declare any specific reason. The only limitations are the maximum duration (36 months, also considering a series of contracts) and the open-ended/fixed term contract ratio, which is a maximum of 20 percent of the fixed term. The Government is planning to roll out incentives for the use of open-ended contracts (with the new rules on dismissals); one way is by increasing taxation on fixed-term contracts.