It was the “Cura Italia” decree that introduced the ban on dismissal in Italy in the middle of the COVID crisis. What impact did this legislation have?
As is known, the Italian government, with the Cura Italia decree, introduced a ban on the dismissal of employees for economic reasons and with retroactive effect.
This prohibition, originally in force until August 17th, 2020, was further extended by anchoring it to a flexible term – that is the termination of the use of the Redundancy Fund (cassa integrazione) for COVID-19 or the exemption from contributions. There are some exceptions to this such as with corporate bankruptcies or liquidations which do not have any provisions for the continuation of business or through a collective agreement with Italian trade unions. In these later cases dismissals for economic reasons would be allowed.
Already from this introduction, it is clear that the issue is complicated and involves the intervention of several parties as well as different deadlines. How long will Italian companies be subject to a ban on dismissals and, likewise, how long will employees in Italy be able to enjoy it?
Unfortunately, the answer is not clear and hence the National Labor Inspectorate (which is the Italian government body with function of the supervision of work, social security, insurance and health and safety in the workplace) has intervened on this point. On September 16th, 2020 it was specified that – with the exception of companies that have benefited from the cash treatment for COVID (by this we intend the Italian government’s furlough scheme cassa integrazione) or the waiver of social security payment contributions – the ban on dismissals for businesses experiencing economic difficulties will operate until December 31, 2020.
And for the companies that have benefited from the redundancy fund (cassa integrazione) or the exemption from paying social security contributions?
It remains flexible, hence it is not possible to give a specific indication.
What can we expect in the coming weeks? Is a new intervention on this subject possible?
What has been described is what should happen. However, it should be noted that this past October 22nd, 2020 there was a proposal from the Italian Ministries of Economy and Labor to extend the ban on the prohibition of dismissals for economic reasons until January 31st, 2020 **.
In short, there is great uncertainty that will certainly affect the economic planning of companies in the immediate future. How is this massive recourse to emergency legislation justified? In other words, is it conceivable to use different tools to try to give stability to the backbone of the Italian state? Let us not forget that Italy is a democratic republic, founded on labour, as the first article of the Italian Constitution states.
The point is precisely this – adherence to the provisions of the Italian Constitution. In my opinion, the situation envisaged is invalidated by evident profiles of constitutional illegitimacy of the ban on dismissals for economic reasons, which severely limits entrepreneurs’ economic initiatives which are protected by Article 41 of the Constitutional Charter (Article 41 says: Private economic enterprise is free. It may not be carried out against the common good or in such a manner that could damage safety, liberty and human dignity. The law shall provide for appropriate programmes and controls so that public and private sector economic activity may be oriented and co-ordinated for social purposes…). Measures such as this could have perhaps been justified at the beginning given their temporary nature (or at least at first it appeared so) of the measure. However, in the long term these measures do not appear to be further justifiable.
Interview conducted by Sara Botti and published in Corriere Italianita’ on October 30th, 2020.
Read the full article here.
** NOTE: Since this interview was published on the Italian government is currently considering extending the ban on dismissals of employees for economic reasons in Italy until March 31st, 2021
LABLAW will continue to provide you with updates as the situation unfolds in order to ensure you can manage your workforce, and hence. Please do not hesitate to contact us on + 39 02 30 31 11 or at email@example.com if you have any questions. For more information on these articles or any other issues involving labour and employment matters in Italy, please contact Michela Bani (Partner) of LabLaw at firstname.lastname@example.org or visit www.lablaw.com.
For more information please contact Joseph Granato, Communications Manager at L&E Global at email@example.com.