Employment courts are the sole forum in Italy for determining employment disputes. The only employment-related matters handled by the civil courts are those between social security institutions and employers for fines arising from the absence of social security payments.
Civil matters that should ordinarily be determined by a civil court will be determined by an employment court if they are connected to an employment matter (for example, insurance matters relating to an accident at work).
Employment law is a separate set of laws (which sometimes disregards the ordinary principles of civil law) and is based on the principle of the 'weakness' of the employee with respect to the employer's position of strength.
The following constitute the sources of Italian employment law:
- The Italian Constitution, which established the framework and principles of Italian law in 1948.
- Law No. 300/1970 (the Workers' Statute), significantly amended in May 2015 by Law No. 183/2014 (part of a set of laws and legislative decrees known as the Jobs Act) – a wide-ranging reform implementing a number of legislative decrees.
- Other mandatory employment laws, such as Legislative Decree No. 81/2008 dealing with health and safety at work, the maternity law, the working-time law, the 'smart working' law and several others regarding pensions and accidents at work.
- Law No. 68/199 regarding mandatory recruitment of disabled employees, amended with effect from 1 January 2018, and Law No. 104/1992 regarding paid leave to assist disabled relatives, amended in 2015 (Italian labour lawyers are very often asked to assist employers with both of these).
- Collective bargaining agreements at national, regional or company level in national collective labour contracts (CCNLs) and local company-level collective bargaining agreements (CBAs): such contracts can derogate from mandatory employment law in certain cases, including when dealing with important crises (for example, the Alitalia case). These agreements set out the main common rules for each industrial sector regarding matters such as salary levels, working hours, overtime, annual paid leave, sick leave and disciplinary rules.
- Individual contracts: generally containing one or two pages dealing only with the applicable CCNL, the employee's job title and grade (executive, middle manager, or white-collar or blue-collar employee), the mandatory basic salary level (chosen from those stated in the CCNL), the starting date, the working hours and place of work, the length of any trial period, the salary structure, a job description and any applicable post-employment restrictions (non-compete and non-solicitation covenants).
i Employment courts
The claims to be determined by the employment courts are those between the following parties: an employee and an employer; a sales agent (a physical person) and a company manager; a freelance worker (an individual subcontractor) and a company manager; and a member of a board of directors and the company (for fees).
Employment claims in Italy can now be filed with the courts without any prior attempt at conciliation. However, a prior attempt at conciliation remains mandatory in the case of dismissal of an employee hired before 7 March 2015.
This mandatory procedure is necessary only for dismissals for economic reasons; in such cases, an employer with more than 15 employees who is going to dismiss fewer than five employees within the same 120 days must deliver a preliminary notice of dismissal both to the regional labour office (ITL) and to the employee being dismissed and wait for a hearing before the ITL (within 20 days), which is a local office of the Ministry of Employment and Social Security.
If one of the parties refuses the conciliation attempt, or if the attempts to find a solution within the applicable time frame (20 days) are unsuccessful, a certificate is issued confirming that the conciliation requirement has been complied with. The claimant can then proceed to dismiss the employee.
The minutes of the conciliation attempt can be used by the employment court to charge the trial costs and legal expenses to the party that refused conciliation, although the final court decision may result in a lower amount being imposed.
ii Court proceedings
Court proceedings follow two distinct sets of procedural rules:
- The Employment Court Rules of Procedure 2012 (the Fornero Rules), which apply only to employees hired before 7 March 2015 by employers with more than 15 employees, and who challenge their dismissal in court.
- The ordinary employment rules of the Italian Code of Civil Procedure (Article 414).
The Fornero Rules for dismissals are intended to speed up the start of the trial and the time it takes to obtain a decision. To avoid delay in obtaining the main decision regarding the potential reinstatement of the employee at work, the Fornero Rules procedure cannot deal with ancillary claims (for example, salary disputes connected with the former employment relationship).
In accordance with the Fornero Rules, the plaintiff must challenge the dismissal in writing within 60 days and file a lawsuit within 180 days of the letter challenging the dismissal being received.
Once the court has set the hearing date, the plaintiff shall notify the date and lawsuit to the defendant at least 25 days prior to the hearing, while the defendant must file its defence brief with the court at least five days before the hearing.
The lawsuit and the claimant's brief must be as accurate as possible, given the strict time constraints, but they can be modified slightly in response to an unexpected defence strategy by a counterparty.
Ideally, the first phase of the trial is very speedy and is concluded with one of three possible decisions: (1) reinstatement of the employee at work; (2) imposition of a fine of up to two years' salary; or (3) a declaration that the dismissal is correct and rejection of the claim.
This quick decision can be opposed by the losing party by filing a lawsuit within 30 days before the same court. A date will then be set for the opposition hearing, which is conducted pursuant to the Article 414 rules (i.e., an ordinary proceeding).
If, at the end of this opposition phase, the losing party intends to challenge the decision, an appeal must be lodged with the court of appeal within 30 days. During the appeal, only new information may be added or information that the party could not have known before. The appeal can be challenged before the Supreme Court, but only on questions of law or misinterpretation of the relevant CBA.
For all other employment claims (mainly salary claims, but also dismissal of senior managers, dismissal of employees working for employers with fewer than 15 full-time employees, or dismissal of employees hired after 15 May 2015, depending on the size of the employer), the claimant must file a lawsuit with an employment court, according to Article 414.
In general, the time limits for bringing claims are as follows:
- contracts null and void: no time limit or 10 years;
- salary claims: five years; and
- dismissals or changes of contract (from temporary to permanent, or freelance to permanent employment) or changes of employer (for example, agency workers who claim to have been hired by the customer): 180 days from the date of the letter challenging the decision being received.
However, during the voluntary conciliation period, the time limit is suspended and resumes the day after the parties deem the conciliation attempt to have failed.
The writ of summons shall be full and complete. This means that nothing can be changed subsequently, including any attached documents, the names of the witnesses, and the circumstances as testified by the witnesses.
Upon receipt of the writ of summons, the court will open a file and add all the documents. The president of the court will then assign the claim to a single judge, who will schedule a date for the first hearing through a case management order.
It is the claimant's responsibility to obtain the judge's order and serve the writ of summons with the court order on the defending party (the respondent).
The respondent shall then file the defence brief with the court at least 10 days prior to the hearing. The defence brief shall be complete and cannot be changed subsequently, including any attached documents, the names of the witnesses and the circumstances as testified by the witnesses.
The main hearing is heard by a single employment judge and is open to the public, but the judge can restrict access. During the first hearing, the judge must try to help the parties reach a settlement agreement. Again, should one of the parties disregard the judge's suggestion and refuse unreasonably to settle the claim, that party may be sanctioned by imposing the payment of the other party's legal fees, even if that party wins the case (albeit, in the latter case, for an amount lower than was suggested by the judge and accepted by the counterparty).
The judgment can either be announced orally or taken under advisement to be issued in writing as soon as practicable. In either case, the court ultimately must publish a decision and provide the reasoning for it.
If the worker is the successful party, he or she automatically obtains an order for payment of all claims and legal costs, sometimes even before the reasoning for the decision is written and made available to the parties.
A court judgment can be challenged by filing an appeal with the court of appeal within six months of the date on which the reasoning for the judgment is made public. Should the court judgment be served on the counterparty's lawyer by the winning party's lawyer, the term for filing the appeal is only one month. The appeal can only be filed without hearing further witnesses or acquiring new documents (except for specific objections). After the court of appeal hearing, any further appeals can be made to the Supreme Court, but only on questions of law.
III TYPES OF EMPLOYMENT DISPUTES
i Unfair dismissal
Under the Workers' Statute, no employee can be dismissed without a qualified reason (objective or subjective). It is up to the employer to show that the dismissal was reasonable and that it was carried out in accordance with fair procedures.
For employers with more than 15 full-time employees and employees hired before 7 March 2015, the following unfair dismissal awards apply:
- Reinstatement at work plus a maximum of one year's gross salary (depending on the duration of the trial), plus the option to resign with an up-front payment of 15/12 of the annual gross salary. This may occur in cases of false accusations or false economic or organisational reasons, or if an alternative to dismissal was available but not considered.
- A fine of between one and two years' gross salary. This lesser sentence is generally handed down by the court when the accusations are true, but not particularly serious, or the economic or organisational reasons are true.
- A fine of between six months' gross salary and one year's gross salary is levied when the reasons for termination are true and valid but the procedure was defective.
- Reinstatement at work plus damages equal to the full salary and social security costs for the period from dismissal to the reinstatement order, without any time limit, when the dismissal is found to be retaliatory (for example, a whistle-blower has been dismissed because of his or her accusations) or discriminatory, or in the case of dismissal of a working mother or of a woman within one year of getting married.
For employees hired after 7 March 2015 by an employer with more than 15 full-time employees, the awards start from a minimum of 6/12 of the annual gross salary up to a maximum of three times the annual gross salary.
ii Employment status
Whether an individual is an employee, temporary staff on a coordinated and continuous collaboration contract (known as a collaborator or 'co.co.co.') or self-employed is of key importance in relation to any employment benefits or rights he or she may have.
For example, certain rights are available to employees, such as the right to the national minimum wage and paid annual leave, and the right not to be unfairly dismissed. In addition, the tax and social security treatment of an individual will depend on their employment status.
On the other hand, collaborators and consultants (self-employed workers) are entitled to fewer rights.
In general terms, an employee is a worker who has entered into or works under an employment contract, whose job is determined unilaterally by the employer and who is mainly paid on a time basis (locatio operarum): he or she sells his or her job skills on an hourly basis to a sole customer and can be redirected by the employer from one job to another, every day, in accordance with the business needs.
An individual is self-employed if his or her work is self-managed according to the target agreed with the customer, without any limitation on assisting other customers and without any time constraints or place of work determined by the customer. The self-employed individual can be a freelance professional (such as a lawyer, an accountant, a medical doctor) with a qualification from a state exam and registered in a mandatory register, or a free consultant without any specific enrolment in a mandatory register. What is crucial is that all these individuals are 'entrepreneurs on their own behalf', undertaking some sort of entrepreneurial risk on their own account.
On the other hand, a collaborator is an individual who has entered into or works under a work contract or any other contract whereby the individual performs the work personally, for another party to the contract, (1) by coordinating the work to meet the customer's needs and targets, (2) on a continuous basis, (3) without carrying out business through his or her own organisation of capital and tools, (4) without undertaking a proper entrepreneurial risk on his or her own account, but (5) without the customer being able to change his or her job unilaterally and ask that different tasks be performed.
In determining employment status, the courts will look at many factors regulating the arrangement between the parties. There is no single conclusive test to determine an individual's employment status.
iii Other disputes
Other common disputes heard in court are in relation to:
- minimum wages because of a lower level of classification with respect to the CBA provisions;
- paid leave and wages;
- overtime (work performed after the hours ordinarily provided for by the national collective contract);
- remote control of workers without any trade union agreement;
- 'black' work (working off the books without a contract and receiving payment without a payslip and proper taxation);
- dismissal of senior managers;
- stock options and restricted stock units;
- calculation of severance packages (the deferred payment, accrued on an annual basis by the employer, paid out in all cases of employment termination);
- violation of temporary contract rules and requests to be hired on a permanent basis;
- violation of collaborator rules, and requests to be considered as an employee from the beginning of the relationship; and
- mobbing and injury to mental and physical health.
IV YEAR IN REVIEW
i Fixed-term employment regulation
During the past year, the new government and parliament decided to intervene on fixed-term employment regulation through two laws:
- Decree No. 87 of 12 July 2018, known as the Dignity Decree; and
- Law No. 96 of 9 August 2018, which was converted, with amendments, from Decree No. 87 of 12 July 2018.
The purpose of the new regulations is to discourage fixed-term employment contracts in favour of the open-ended mode. Indeed, the intent is to prevent the 'stop and go' that is a stable alternation between employment period, fixed-term or staff leasing, and periods of unemployment. Thus, the new legislation has amended the Jobs Act regulation with regard to fixed-term employment agreements.
The most relevant innovations implemented by Decree No. 87/2018 and Law No. 96/2018 are the following:
- The maximum duration of fixed-term employment agreements, with extensions and renewals, has been reduced from 36 to 24 months (Article 19, Section 1, Legislative Decree No. 81/2015).
- Fixed-term agreements may be signed without a specific cause (acausale) solely for the first 12 months instead of 36 months pursuant to the old regulation (Article 19, Section 1, Legislative Decree No. 81/2015).
- Renewals must always be justified by an acausale, even in the case of first renewal and if the whole duration of the agreement does not exceed 12 months (Article 19, Section 4; Article 21, Section 1, Legislative Decree No. 81/2015).
- Renewal costs: for each renewal, the employer shall pay an additional 0.5 per cent NASPI (unemployment social security measure) contribution. For example, in the case of four renewals, the employer shall pay an increasing additional contribution up to 2 per cent; this additional contribution applies solely to renewals and not to extensions (Employment Ministry Note No. 17 of 2018).
- The maximum number of extensions has been reduced from five to four during the entire employment relationship between parties (Article 21, Paragraph 1, Legislative Decree No. 81/2015).
- Extensions may be without a specific cause if the whole relationship duration (extensions included) does not exceed 12 months; however, if the fixed-term agreement duration exceeds 12 months, the extension shall have a specific justification clause (Article 21, Section 1, Legislative Decree No. 81/2015).
- The employee may challenge the fixed-term validity within 180 days, instead of 120 pursuant to the old regulation, from the termination date (Article 28, Section 1, Legislative Decree No. 81/2015).
The new regulation provides for specific causes that may justify fixed-term agreements, renewals and extensions of more than 12 months:
- temporary and objective needs, not connected with the regular activity;
- the need to replace employees; and
- needs related to the temporary, substantial and unpredictable increase of the regular activity (Article 19, Section 1, Legislative Decree No. 81/2015).
With regard to additional contribution, it is an accessory of the additional contribution provided by the Fornero Law (Law No. 92/2012); consequently, the same rules apply to both additional contributions. Specifically, additional contributions may be (1) entirely reimbursed if the employee is hired with an open-ended employment agreement immediately after the termination of the fixed-term employment agreement, or (2) reimbursed by 50 per cent if the employee is hired with an open-ended employment agreement within six months of the termination of the fixed-term employment agreement.
The new regulations provide for more explicit sanctions for violations:
- In the case of fixed-term employment agreements of more than 12 months without specific cause or of fixed-term employment agreements of more than 24 months, the agreement automatically becomes permanent after 12 months (Article 19, Section 1-bis, Legislative Decree No. 81/2015).
- In the case of extensions or renewals of more than 12 months without specific cause, the agreement automatically becomes permanent (Article 21, Section 1, Legislative Decree No. 81/2015).
Furthermore, unless CBAs provide different regulations, fixed-term employment agreements for each employer may not exceed 20 per cent of the permanent workforce already hired by the employer on 1 January of the year of the fixed-term employment agreement stipulation. Moreover, fixed-term agreements plus fixed-term staff leasing percentages may not exceed 30 per cent of the permanent workforce already hired by the employer on 1 January of the year of the fixed-term employment agreement stipulation or fixed-term staff leasing utilisation.
Moreover, pursuant to new regulations, the above-mentioned fixed-term employment agreement rules shall apply to fixed-term staff leasing, with the exception of the 'stop and go' rule in the case of renewal (stop for a minimum of 10 days if the duration of the first agreement was less than six months, or a minimum of 20 days if the duration of the first agreement was more than six months). This means that, for example, a fixed-term staff leasing agreement with a duration of more than 12 months shall need a specific justification cause from among the above as provided by the law.
ii Jobs Act amendment: indemnity in case of unlawful dismissal
Decree Law No. 87/2018 and Law No. 96/2018 amended Legislative Decree No. 23/2015 (one part of the Jobs Act) with regard to regulations for the dismissal of permanent employees.
Before the new law, the Jobs Act introduced a whole innovative frame of sanctions for unfair dismissal: indemnity instead of reinstatement, except in cases of discriminatory, retaliatory or verbal dismissal. Indeed, pursuant to the Jobs Act regulations, in cases of unfair dismissal, the judge would order the employer to pay the dismissed employee an indemnity equal to 2/12 of the annual salary per year of employment, within a range of a minimum of 4/12 of the annual gross salary to a maximum of twice the annual gross salary.
The Dignity Decree maintained the indemnity regime but amended the indemnity quantification. Pursuant to the new regulations, in the case of unfair dismissal, the judge shall order the employer to pay the dismissed employee an indemnity equal to 3/12 of the annual salary per year of employment, within a range from a minimum of 6/12 of the annual gross salary to a maximum of three times the annual gross salary.
Nevertheless, the new regulations and the old Jobs Act were judged to be non-compliant with the Italian Constitution by the Constitutional Court. Indeed, the Court found Article 3, Section 1 of Legislative Decree No. 23 of 4 March 2015 illegitimate in its provision that the indemnity for unfair dismissal should be determined solely on the length of time the employee has been in post (hereinafter referred to as 'seniority').
Judges do not censor the measure of the indemnity quantification but the system of quantification, which is rigid, automatic and linked to one parameter that precludes the judge's appreciation and violates the general principles of equality and rationality. According to the Constitutional Court, the seniority parameter is not enough to restore the effective loss suffered by the dismissed employee and does not dissuade the employer from carrying out unfair dismissals.
Thus, the new Article 3, Section 1 of Legislative Decree No. 23/2018 provides that an employer shall pay an employee who has been unfairly dismissed '[a]n indemnity not subject to social security contributions of no less than six and no more than thirty-six months' salary'.
Consequently, there are no parameters to determine the indemnity for unfair dismissal. In fact, the Constitutional Court provided that the judge shall use parameters provided by Article 8 of Law No. 604/1966 ('taking into account the number of employees employed, the size of the business, the seniority of the employee, the behaviour and conditions of the parties') and Article 18, Section 5 of the Workers' Statute ('in relation to the seniority of the employee and taking into account the number of employees employed, the size of the economic activity, the behaviour and conditions of the parties').
Moreover, the salary considered to determine the severance pay shall be the last salary paid. In fact, Article 6 of Legislative Decree No. 23/2018 provides that to settle the dispute, the employer may offer the employee an amount that does not constitute a taxable income for the purposes of personal income tax and is not subject to social security contributions, equal to one month's salary for each year of seniority; in any case, a minimum of three and a maximum of 27 months' salary. Thus, for example, in the case of an employee with three years' seniority, a conciliation offer would be equal to three months' salary.
The Constitutional Court decision gives priority to the judge's appreciation in determining an indemnity for unfair dismissal, which probably will be higher than before, in most cases. However, the risk of lawsuits will be higher owing to the wide range (from six to 36 months' salary) of the possible indemnity quantification based on a judge's appreciation.
Therefore, the Constitutional Court decision will affect the use of the conciliation mechanism provided by Article 6 of Legislative No. 23/2018. In fact, if previously an amount equal to half the compensation recognised by a court may have been considered attractive, now the employee who can expect to obtain a significantly higher indemnity than the conciliatory offer with a court decision, will be unwilling to accept it.
In conclusion, the Constitutional Court invited the legislator to issue new regulations with regard to the matter, taking into account the principles expressed by the same with the above-mentioned decision. Thus, the current regime will probably be temporary and new rules should be expected in the near future.
iii Privacy regulation
On 25 May 2018, the General Data Protection Regulation (GDPR) entered into force and three months later the Italian legislator issued Legislative Decree No. 101 of 10 August 2018, adapting the Italian Code of Privacy (Legislative Decree No. 196/2003) to the GDPR, thereby also affecting the privacy aspect of employment relationships.
The most relevant innovations implemented by Legislative Decree No. 101/2018 are as follows:
- The Decree reproduces the GDPR provisions with regard to the lawfulness of data processing but, in specific cases, provides specification of such provisions. One of the most important is that the data processing is necessary for compliance with a legal obligation to which the controller is subject, the legal obligation must be provided by law or by the regulation if it is statutory.
- Specification of parts of the GDPR provisions with regard to special categories of personal data. The Decree provides for lawfulness of special categories of processing personal data about an employee in relation to control and inspection activities, sanctioning and defensive activities before a judicial or administrative authority.
- Besides the GDPR requirements, the Decree provides that biometric data processing shall be regulated by a specific provision of the Italian Data Processing Authority, issued every two years.
- Besides the GDPR requirements, the Decree provides that criminal data processing shall be regulated by a decree of the Ministry of Justice, yet to be issued. Currently, criminal data processing is lawful if necessary for compliance with a legal obligation to which the controller is subject, or for exercising specific rights of the controller or the data subject (i.e., employer and employee).
- The Decree confirms that the Italian Data Processing Authority shall issue general authorisation regarding employment relationship data processing. Indeed, the last authorisations expired on 25 May 2018, but shall continue to apply until new authorisations are issued.
- Pursuant to the new regulations, the Italian Data Processing Authority shall issue specific deontological codes with regard to the processing of data related to the employment relationship.
- The Decree provides specific sanctions relating to significant violations of privacy regulations.
iv Relevant cases
LE v. Fiere di Parma SpA
The case decided by the United Sections of the Supreme Court of Cassation with judgment No. 10435/2018 was one of the most significant in 2018.2 In this judgment, concerning an unfair dismissal for redundancy, the Supreme Court expressed an innovative principle, as a mere obiter dictum and without giving it concrete application in the specific case: 'a possible ascertained excessive burdensomeness in reinstating the employment relationship', taking into consideration the notion mentioned in Articles 1384 and 2058 of the Civil Code, that 'can allow, therefore, the judge to opt – notwithstanding the ascertained proven non-existence of one of the two constitutive requirements of the dismissal (i.e., the existence of the fact constituting the justified reason and fulfilment of the obligation for repêchage) – for the indemnity protection'. Before this decision, some courts used to order employee reinstatement even if solely one of the two requirements was proven as non-existing.
AA v. Banco di Sardegna SpA
This case concerns the dismissal of an employee for taking sick leave that exceeded the maximum permitted period.3 The employee had obtained sick leave based on a medical certificate, declaring his sick status for a period exceeding the maximum permitted period for sick leave. During this 'protected' period, an employer may not dismiss an employee because of absence from the workplace. The employer in this case dismissed the employee before his actual absence for a period exceeding the protected period, based on the dates stated on the medical certificate, which were beyond the protected period. Consequently, the Court decided that dismissal for reasons of continued absence because of the employee's illness or injury, but before having exceeded the maximum permitted period fixed by collective bargaining or, in the absence of such, by use or fairness, is null and void for violation of the mandatory rule set forth in Article 2110, Section 2 of the Italian Civil Code. Before this decision, some courts used to define this kind of dismissal as temporarily ineffective, but lawful after expiry of the protected period.
Banca Monte dei Paschi di Siena SpA v. CB
This case relates to disciplinary dismissal. Specifically, the employer contested a disciplinary violation by the employee after two years.4 In similar cases, the Italian courts have ruled in two different ways: (1) a delay in disciplinary contestation means non-existence of the fact constituting the just cause for dismissal and, consequently, reinstatement of the employee; and (2) a delay in disciplinary contestation is a mere violation of the dismissal procedure and, consequently, the judge shall order the employer to pay the employee an indemnity of between 12 and 24 months' salary.
The United Sections of the Supreme Court of Cassation decided that the judicial decision to cancel the disciplinary dismissal resulting from a significant and unjustified delay in the disciplinary contestation, falling ratione temporis in the discipline of Article 18 of the Workers' Statute, as amended by Article 1, Paragraph 42, of Law No. 92/2012, will result in the application of the indemnity sanction provided for in the fifth paragraph of Article 18 of the Workers' Statute. According to the United Sections, therefore, in the event of an existing violation that was not promptly contested, provided that the employment relationship is terminated at the date of dismissal, the employee is entitled to the payment of an indemnity of between 12 and 24 months of the last total salary.
WD-40 Company Ltd v. CP
Finally, this case is in regard to discriminatory dismissal occasioned by marriage. The employer dismissed the employee a few months after he got married.5 Article 35 of Legislative Decree No. 198/2006 provides that dismissal of a female employee because she has got married is null and void and it is assumed that dismissal of an employee during the period between the day on which the request for the banns is made, in so far as the marriage celebration will follow, and one year after the celebration itself, was decided because of the marriage. The male employee of the case issued a complaint before the Court because, in his opinion, the provision is discriminatory in its literal meaning and should apply to male employees too.
The Court decided that, far from being discriminatory, this legislation is perfectly legitimate as it responds to a difference in treatment justified by reasons, not as a result of the gender of the person providing a work activity but of the protection of maternity. This is constitutionally guaranteed to women, who are also entitled to the same human rights as employees, on the basis of the fulfilment of her essential family function and to provide the mother and child with special adequate protection. Nor is it in contrast, precisely for this reason, with the EU anti-discrimination legislation (the Charter of Fundamental Rights of the European Union), in particular with either Article 23, Paragraph 2 thereof (according to which 'The principle of equality does not prevent the maintenance or adoption of measures that prevent specific advantages in favour of the under-represented sex') or Article 33, Paragraph 2 thereof (according to which 'In order to reconcile family and professional life, everyone has the right to protection against dismissal for a reason relating to maternity and the right to paid maternity leave and parental leave after the birth or adoption of a child').
V OUTLOOK AND CONCLUSIONS
As anticipated in the last edition, the Jobs Act and the Fornero Rules are currently in the spotlight and the right wing is seeking to repeal this legislation.
This scenario would probably lead to a progressive reintroduction of Article 18 of the Workers' Statute, and consequently the return of real protection against dismissal and of reinstatement in cases of unfair dismissal. However, repealing the Fornero Rules would lower the retirement age, resulting in more retired people and fewer working people, which is problematic in terms of financing retirement benefits.
In conclusion, with regard to the effects of the most important legislative act of employment law of 2018, the Dignity Decree, the Italian Social Security Authority (INPS) issued a statistical document regarding temporary employment. The results of the INPS statistical research show that the Dignity Decree does not imply an increase in hiring with open-ended employment agreements.
In fact, during the period between July (when the Dignity Decree became effective) and October 2018, the number of employees hired with open-ended agreements was 381,100 compared with 364,784 during the same period in 2017, and between January and June 2018, 662,847 employees were hired with open-ended agreements compared with 630,260 during the same period in 2017. From this, we can deduce that the positive tendency in new open-ended employment relationships started before, and independently from, the Dignity Decree.
Moreover, during the period between July and October 2018, 1,109,977 employees were hired with fixed-term agreements compared with 1,144,952 during the same period in 2017, and between January and June 2018, 1,768,081 employees were hired with fixed-term agreements compared with 1,588,712 during the same period in 2017. As stated above, we can deduce that the positive tendency in new fixed-term employment relationships also started before, and independently from, the Dignity Decree.
With regard to employment termination, however, during the period between July and October 2018, the number of fixed-term agreements that were terminated was 1,056,181 compared with 1,026,218 during the same period in 2017. We can therefore deduce that the implementation of the Dignity Decree entailed an increase in terminations of fixed-term employment relationships.
In fact, under the Dignity Decree, the reduction of the maximum duration of contracts from 36 months to 24 months has naturally led to an increase in the turnover of employment contracts. A company may decide to hire an existing employee with a permanent employment agreement or to hire another employee with a new fixed-term or temporary employment agreement. The company may also decide to terminate the employment agreement entirely.
The option to hire an employee with a permanent employment agreement is less attractive for companies owing to an increase in the cost of terminating permanent employment agreements, as provided for in the Decree and in light of the Constitutional Court decision discussed in Section IV. In fact, there is considerable empirical proof that an increase in the costs of the interruption of employment relationships results in a reduction in recruitment.
The second option – to hire another employee – entails additional costs for the company in finding personnel with whom to substitute non-renewable employment agreements. The replacement does not take place immediately and the introduction of the specific cause for fixed-term employment agreements with a duration of more than 12 months increases the costs perceived by the employer in filling a temporary position in the company.