In July 2012 the Italian Government introduced a package of labour law reforms in a bid to boost employment and promote growth.
Many aspects of employment law will be affected by this new piece of legislation. As far as access to the labour market is concerned, the key changes for employers are these:
- Fixed-term contracts: Substantial changes have been made to the legal requirements that must be satisfied in order to engage fixed-term staff. Prior to the reforms, if an employer wished to offer a fixed-term contract it had to be able to show detailed reasons for doing so, e.g. organisational or production reasons. Going forwards, employers will not have to do this for the first fixed-term contract of 12 months or less entered into with a particular individual. This should give employers more flexibility to hire staff on a shortterm basis.
Fixed-term contracts cannot, however, last for more than 36 months. Furthermore, employers must wait at least 90 days from expiry (or 60 days in the case of fixed-term contracts of up to 6 months) before hiring the same employee on another fixed-term contract. From a tax perspective, employers will be required to pay an additional contribution of 1.4% on top of an employee’s salary in order to finance the new unemployment benefit schemes. This requirement will not apply to fixed-term contracts that have been put in place to cover employees on leave or for performing seasonal work.
- Apprenticeships: There are tax and social security benefits for those employers which offer apprenticeships. The labour law reforms introduce new rules which are designed to control the balance between permanent employees and apprentices. It means that employers will be entitled to have 3 apprentices for every 2 standard employees (it used to be one apprentice for every employee). In order to hire new apprentices, employers will however be required to have offered permanent roles to at least 50% of their former apprentices.
- Internships: Employers will no longer be entitled to offer internships to graduates or those with a masters degree, unless they are fairly remunerated.
Self-employed workers: Self-employed workers must be reclassified as “coordinated and continuous” workers or as permanent employees (where applicable) if at least two of the following conditions are met:
- there is a “self-employment” relationship between the same parties which lasts more than eight months in a year;
- more than 80% of the yearly income of the self-employed worker derives from such a relationship;
- the self-employed worker is provided with a permanent workstation at the company’s premises.
This provision will not apply to professionals admitted to a professional register, e.g. lawyers, architects, engineers.
- Project work contracts: These contracts will only be allowed if the contract explicitly sets out the project assigned to the worker and the result expected from her/him. The lack of a specific project means that if the contract is challenged in the Courts, the Judge must reclassify the contract as a permanent employment contract.
Vittorio Torazzi Partner, VTCS – Studio Legale
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