Recently, the Italian Parliament has issued new employment rules that will have a major impact on the employment market in the course of 2015. Rules on collective dismissals now apply to executives Article 16 of law 161/2014, in force since 25 November 2014, extended the application of the rules on collective dismissals to executives (dirigenti) in order to bring Italian law in line with the general principles of European legislation. Under the new rules, a collective dismissal takes place when a company:
- employs more than 15 employees – including executives; and
- plans to make at least five dismissals within 120 days – including the dismissal of executives.
If the collective dismissal takes place:
- Executives can be dismissed for economic reasons only after compliance with the union consultation procedure provided by art. 4 of Law 223/1991;
- Executives to be dismissed must be chosen according to the criteria agreed with the unions or, in lack of any agreed alternative criteria, by those set out by Law 223/1991 (family status, seniority and organisation/productive reasons);
- In the event of a violation of the collective dismissal procedure or unlawful application of the selection criteria, then unless there are different provisions provided by the applicable national collective agreement, the executive will be entitled to an indemnity ranging between 12 and 24 months' salary.
Jobs Act On 3 December 2014, Delegate Law 1428-B for the reform of the labour market, known as the Jobs Act, was approved by the Senate. Following the specific principles and criteria provided by the Jobs Act, the Government will, within six months, among other things:
- rationalize the various types of employment contracts;
- promote the hiring of employees with permanent contracts, making them more attractive in terms of costs;
- introduce (for new hirings) permanent employment contracts with increased protection in case of dismissal, depending on the seniority of the employee. As a consequence, unlawful economic dismissals for total lack of grounds by employers with more than 15 employees (currently sanctioned with reinstatement under art. 18 of Law 300/1970) will be only sanctioned with the payment of an indemnity increasing in relation to the seniority of the employee (if hired after the new provisions came into force);
- limit reinstatement for unlawful disciplinary dismissals to specific cases;
- extend the application of the unemployment benefit (ASpI), currently applicable only to former subordinate employees (those who were subject to the employer's direction and control and employed under a permanent or fixed-term employment contract);
- extend the possibility of changing an employee's duties (currently possible only in case of assignment of higher or equivalent duties), in a business restructuring.
In addition, it is worth noting that the Italian Parliament is currently examining the new Stability Law for 2015 which, if approved, will provide:
- exemption for the company from the payment of social security contributions – up to 36 months and up to of EUR 8,060 for each year – for permanent hirings during 2015;
- for employees with a seniority of at least six months, the possibility to require – from 1 March 2015 to 30 June 2018 – the TFR (Trattamento di fine rapporto) severance indemnity (which is accrued by the employer during the employment relationship and paid by the employer to the employee on termination) to be given as part of monthly pay rather than as deferred compensation.