The Italian Government has approved the definitive version of the "Dignity Decree" (so called "Decreto Dignità") on 12 July 2018.
Such Decree is aimed at limiting the overall duration of the fixed term employment contracts and the relocation of the companies outside from the UE territory, and at safeguar-ding the occupational levels.
The Decree is in force starting from 14 July 2018.
FIXED TERM EMPLOYMENT CONTRACTS
The Dignity Decree provides for a deep renewal of the fixed term employment contracts' regulation.
The main changes are the following:
- reduction of the maximum duration of the fixed term employment contracts to 24 months, including renewals (instead of 36 months, according to the previous law);
- reintroduction of the "grounds" at the basis of a fixed term employment contract. In particular, the employer must indicate the temporary and objective reasons con-nected to temporary increases of the activities, in order to stipulate a fixed term employment contract lasting more than 12 months. Summarizing, it is possible to sign a fixed term employment contract without indication of the reasons grounding the contract but, should a re-newal occur, the employer must indicate such reasons. In case "reasons" are missing, the law provides for the conversion of the fixed term employment contract into an open term one. It is also possible to hire an employee with a fixed term employment contract for 6 months and then renew it for additional 6 months, without indication of the "grounds". The additional renewals (that increase the total lasting of the employment rela-tionship over 12 months) must include the grounding "reasons". Such regulation is not applicable for the sea-sonal activities where the fixed term employment con-tracts may be renewed and prolongated also without a grounding "reason";
- decrease of the maximum number of the renewals (now are 4 instead of 5 according to the previous regulation);
- increase of the term within which the employee may challenge the lawfulness of a fixed term contract. By way of example, an employee hired with a fixed term employment contract considered unlawful may challen-ge the employment contract (by registered letter) and ask for the conversion of the abovementioned contract into an open term employment contract within 180 days from the termination;
- in any case, the company cost for a fixed term em-ployment contracts is higher. The additional contribute for the employer is increased from 1,4% to 1,9% of the compensation paid, for each renewal.
Such new provisions will be effective for the fixed term employment contracts signed after 14 July 2018 and for the renewals signed after the same date.
Summarizing, a renewal of 12 months of a fixed term em-ployment contract (signed in June 2018 without indication of the "grounds") will be valid until the natural termination date.
An additional renewal, on the other hand, must indicate also the "grounds". The same in case of a fixed term em-ployment contract lasting 36 months, signed before the Dignity Decree; such contract will remain in force until the final term.
The Dignity Decree has modified the indemnity in case of unlawfulness of the dismissal intimated to an employee hired by a company bigger than 15 employees.
Such indemnity, after the Dignity Decree, can not be lower than 6 monthly instalments and not higher than 36 month-ly instalments (before the Dignity Decree the range was between 4 to 24 monthly instalments).
For the companies hiring a number of employees equal or higher than 15 employees the indemnity cannot be lower than 3 monthly instalments and higher than 6 monthly instalments (before the Dignity Decree the law provided for a range between 2 and 6 monthly instalments).
Such provisions will be effective for all the employment contracts signed after 7 March 2015 (for the employment contracts signed before such date the previous regulation "Fornero Law" will remain in force, which provides, in case of unlawfulness of the dismissal, an indemnity ranging be-tween 12 and 24 months, subject to the Judge's evalua-tions).
In case of relocation of companies that have obtained State aid for opening, extending or supporting the eco-nomic activities (within 5 years from the termination of the supported activity), the company will loose the State aid and administrative penalties must be paid in a range be-tween 2 to 4 times the amount received.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.