The so-called “Dignity Decree” has introduced important innovations concerning fixed-term employment contracts, supply of work and penalties in the event of illegitimate dismissal, as provided by the so-called Jobs Act (i.e., for open-ended contracts stipulated after March 2015.) These provisions respond to the Government purpose of fighting the issue of unstable employment.
The Decree entered into force on July 14th and – as a decree law – shall be converted into law by the Italian Parliament within 60 days of its entry into force.
So far, the “Parliamentary iter” involved the Joined Commissions, which have introduced – among others – the following significant amendments to the provisions that were initially envisaged.
The Decree, in its new version, is now under the Parliament Assembly examination.
Fixed-term contract transitory provisions
The new provisions concerning contracts’ maximum terms (12 months or 24 months only in the presence of the so-called “obligations”) will apply to fixed-term contracts stipulated after the entry into force of the decree (i.e. July 14th 2018).
Specific “reasons” shall also be provided in case of extensions of fixed-term contracts exceeding 12 months as well as renewals of fixed-term contracts carried out after October 31st, 2018.
Supply of work
A mandatory maximum number of fixed-term supplied employees, has been introduced for users’ companies.
In fact, given any different NCBA provision, the number of fixed-term supplied employees shall not exceed the percentage of 30% of the user company’s open-ended contract employees.
Penalties have been introduced as regards the new regulated figure of “fraudulent supply of work”.
When supply of work contract is carried out with the only specific purpose of avoiding mandatory law or NCBA provisions, the employment agency and the user company shall be punished with a fine of 20 Euros for each employee involved and each day of labor supply.
Youth employment incentives
Up to 2020, employers are entitled to the benefit of social security contribution reductions of 50%, in case of hiring under 35 employees with open-ended employment contracts.
The reduction is applied on a monthly basis, for a maximum period of 36 months and the maximum amount of the reduction is 3000 Euros on an annual basis.
Companies operating in the tourism sector and employing up to 8 employees can now benefit from the occasional work – voucher system.