Italy: Legislative Decree N. 368 of 6th September 2001

Last Updated: 3 December 2002
Article by Franco Toffoletto

. - (G.U. n. 235, 9th October 2001, Serie Generale)

Art. 1.

Fixing of limit

1. It is allowed to fix a limit to the length of subordinate employment contracts due to technical, productive, organizational or replacement reasons.

2. The fixing of the limit is without effect if it does not appear, either directly or indirectly, in a written act in which the reasons contained in subsection 1 are specified.

3. A copy of the written act must be given from the employer to the employee within five working days from the beginning of the service.

4. Writing is not necessary when the length of the employment contract, purely occasional, does not exceed twelve days.

After a long agony lasting many years, in which law N 20 1962, (which provided the very few and definite hypothesis in which it was allowed to stipulate a fixed term employment contract), has gradually crumbled thanks to the introduction of a number of normative and contractual exceptions, the new discipline of time contracts has been at last approved, and came into force on the 24th October. It is not a complete liberalization, but a total change of perspective: the new law does not stem from predetermined legal or contractual hypothesis, but instead provides for the existence of technical, productive, organizational or replacement reasons for the sealing of fixed term employment contracts. Thus, the use of this much more adaptable and efficient kind of contract shall widen, even though the need for a reason to justify it does once again confirm its odd unpopularity. The fundamental difference between indefinite term employment contracts and fixed term employment contracts remains, although the latter is no more subordinate to legal or contractual hypotheses, even if its existence must still be adequately motivated. The interpretation of the admission requirements, and consequently the validity of each fixed term employment contract, is referred to the law which shall probably avail itself of precedents in matter of transfers, which is allowed according to art. 2103 of the civil code only if it is supported by technical, productive, organizational or replacement reasons.

This shall, no doubt, raise many interpretative problems, and it shall actually leave the final word to the magistrate as to its validity. All this represents a major risk: in the event of the judge not considering the alleged motivations as valid, he might provide for the conversion of the contract into an indefinite term employment contract, even though many years may have elapsed from the actual termination of the contract itself.

However, when we consider that this norm should be the enforcement of an EU directive, it is surprising to note that no such condition exists in European norms. In fact, the norm refers to the general agreement signed on 18th march 1999 by Trade Unions organizations (Ces, Ceep, Unice) and this agreement never mentions justifying reasons for fixed term employment contracts, but only the need to establish rules against discriminations. Thus, the EU did not ask us to introduce a reform of fixed term contracts providing for reasons for their signing, nor did it grant collective agreements the possibility to fix limits.

As for the possibility to use fixed term employment contracts for substitutive reasons, we think that this norm matches the old one in every point, i.e. that it is provided for by the former legislation, which specifically referred to the replacement of absent employees, who would, nonetheless, keep their position in the firm.

For what concerns the form of fixed term employment contracts, the norm provides for what was already stated in article 1 of the former law, i.e. that the fixing of a limit has no validity when it does not appear in a written act, unless the length of the contract does not exceed twelve days. As before, therefore, written form is request ad substantiam, even though the inadvertence of the norm does not imply the contract’s invalidity because of the absence of one element, but it does cause its conversion into an indefinite term employment contract. A copy of the written act must be given to the employee within five working days from the beginning of their service.

Art. 2.

Additional discipline for air transportation and airport services. 1. It is possible to limit the length of an employment contract when the hiring is made by firms operating in the field of air transportation, or by firms which supply airport services, and when it concerns flight and land services, passenger service on board, for a total period of six months, between April and October of every year , and of four months for differently assigned periods; its percentage shall not exceed fifteen percent of the work force who, from the 1st January of the year concerned with the new hiring, are assigned to those tasks. In minor airports this percentage can be increased by the firms in charge of airport services, and by leave of the Direzione Provinciale del Lavoro (provincial labour office), following a request supported by written evidence on the part of the firms themselves. In any case, Unions are informed of the request to hire temporary personnel by the aforementioned firms.

This article confirms the discipline contained in subparagraph f. of article 1 of the law n. 230, 1962, introduced by law n. 266 of 23d March 1977, which allows a greater flexibility in the signing of fixed term employment contracts in the field of air transportation. The existence of mere time requirements - considering the particular needs of air transportation - makes the recourse to fixed term employment contracts possible within the legally disposed bounds, without any other justification. The permission for the firms supplying airport services to increase the percentage of fixed term hired workers must be released by the Direzione provinciale del lavoro (provincial labour office) and no longer by the Ispettorato del Lavoro

Art. 3.

Prohibitions

1. Fixing a limit to the length of an employment contract is not possible:

a) in order to replace workers on strike;

b) unless differently agreed with the Unions, in factories in which, in the last six months, there has been a collective dismissal in accordance with articles n. 4 and n. 24 of Law n. 223 of 23d July 1991, affecting a number of employees assigned to the same tasks provided for in the fixed term employment contact - unless the contract is signed in order to replace absent workers, i.e. it is signed according to article 8, subparagraph 2, Law n. 223 of 23 July 1999, and it lasts less than three months;

c) in factories in which employment contracts have been suspended, or working times reduced, with a right to redundancy fund for workers whose tasks are provided for in the fixed term employment contact.

d) for firms that did not make a risk assessment in conformity with article n. 4 of the decree of 19th September 1994, and following amendments.

Point 3 of the present decree expressly indicates cases in which it is not possible to fix a limit to the length of employment con-tracts, thus actually recovering the same situations in which employers can’t resort to temporary work. Apart from the obvious prohibition to stipulate fixed term employment contracts in order to replace workers on strike -something which would frustrate the exercise of the relative right as granted by the Constitution - and apart from collective dismissals involving workers whose tasks would be performed by other workers hired with a fixed term employment contract, this norm more generally penalizes firms which fail to fulfill their obligations concerning safety.

With reference to collective dismissals, we must observe that there is no absolute prohibition here: in fact, the law provides for the fact that Unions might decide differently. The absence of any explanation in the norm does not make it clear what agreements are alluded to.

The Legislator is probably referring to the agreements that can be entered into during a collective dismissal, a practice regulated by the norms mentioned in the same article. In any case, and even without an agreement with the Unions, employers can stipulate fixed term employment contracts in order to replace workers registered in labour mobility lists and also to sign contracts whose length does not exceed three months.

Art. 4.

The discipline of extension

1. The termination of a fixed term employment contract can be postponed, with the worker’s consent, only when the contract’s original length is inferior to three years. In these cases, extension is allowed only once, provided it is required by objective reasons and it refers to the task indicated in the fixed term employment contract. With exclusive reference to this hypothesis, the total length of the fixed term employment contract cannot exceed three years.

2. The burden of proof concerning the actual existence of reasons for the extension of a fixed term employment contract must be carried by the employer. news

The present article confirms the existence of limits to further extensions of fixed term employment contracts, even though there are differences with respect to the past. Law n. 230,1962, in fact, admitted only one exceptional extension, whose length could not exceed the length of the original contract. Moreover, the extension was possible only in the presence of contingent and unpredictable needs and it had to relate to the same tasks for which the original fixed term employment contract had been signed.

Article 4 of the present decree, instead, no longer refers to exceptional or temporary needs, but admits a single extension only if the original length of the contract did not exceed three years, provided the said extension is required by objective reasons and provided it concerns the tasks for which the first contract had been originally stipulated.

The employer must specifically provide the proofs which demonstrate the actual reasons for a possible extension of the contract; obviously, he should also be able to provide proofs of the need for the signing of a fixed term employment contract, as opposed to an indefinite time one.

Art. 5.

Termination and sanctions. Sequence of contracts

1. If the employment contract is still in force after its termination, or after its extensions as provided for by article 4, the employer must pay the employee an increase of salary for each additional day in which the contract has lasted, equivalent to twenty percent up to the tenth subsequent day, or equivalent to forty percent for each additional day.

2. If the employment contract is still in force twenty days after its supposed termination date - if its original length was inferior to six months - or if it is still in progress thirty days after its termination in all other cases, the contract is held as being an indefinite term employment one, dating from the termination of the preceding one.

3. In the event of a worker being rehired with a fixed term employment contract, in conformity with article 1, within ten days from the termination of a former contract lasting up to six months, or within twenty days from the termination of a former contract lasting longer than six months, the new contract is held to be an indefinite term employment one.

4. In the event of two consecutive hirings, i.e. carried out without solution of continuity, the employment contract becomes an indefinite term one, dating from the signing of the first contract.

This article reproposes the system of sanctions inflicted when the contract is still in force after its supposed termination, thus constituting a violation of the discipline on fixed term employment contracts. This system was introduced in article 12 of the law n. 196 of 24th June 1997, which, in its turn, changed article 2 of the law n. 230 of 1962. This law was much stricter, in that it considered any contract dating from the original term fixed or extended as a unique indefinite term employment contract, uniting the length of all contracts. Law n. 196 of 1997, as well as the present Decree, states that the employer is merely expected to pay the employee an increase of salary for any eventual extension of the employment contract following its original termination or extension. In any case, the contract is held to be an indefinite term employment one when it is prolonged for twenty days after its termination date - in case the original contract lasted less than six months, or when it is prolonged for thirty days when it lasted more than six months, but exclusively on termination of these terms.

The reform also confirms the system of contracts’ renewal, in that it considers as indefinite-term any contract signed within ten days from the termination date of a former six-month term employment contract, or within twenty days from the termination date of a longer lasting fixed term employment contract.

It also reasserts the system of consecutive fixed term hiring made without solution of continuity. In this case, precisely in order to avoid any misuse of fixed term employment contracts, the contract is held to be an indefinite term one dating from the first original signing.

Art. 6.

Non-discrimination principle

1. A fixed term hired worker is entitled to the same amount of holidays, Christmas bonuses, thirteenth month’s instalment, T.F.R., and any other benefit granted to the firm’s employees hired with a comparable but indefinite-term employment contract - i.e. of workers performing the same tasks and working at the same level as defined in collective Agreements - and in proportion to the actual length of working time, unless all this is objectively incompatible with the fixed term employment contract.

This article follows the spirit of 1999/70/CE norm declared in subparagraph 4 (Non-discrimination Principles) of the agreement signed by Unions CES_UNICE_CEEP, which says: "As for working conditions, fixed term hired workers can’t be treated less favourably than comparable indefinite term workers, just because of the nature of their contract, unless there are objective reasons for it". Unlike previous norms, this principle’s new expression clearly explains what is meant by comparable indefinite time workers, i.e. workers that work at the same level as defined by collective agreements. Rather than a non-discrimination principle, this norm seems to be introducing equal treatment, something which had never been mentioned before in our political order, even though we think that past - and consolidated - jurisprudence dealing with this hypothesis is to be held valid. In particular, any reference to economic treatment in the firm, is to be interpreted only in the light of collective treatment, surely not in that of individual one . However the reference to collective agreements might create problems to employers who do not apply them to their employees and who, therefore, are not bound by their criteria.

Art. 7.

Training

1. Workers hired with a fixed term employment contract shall receive an adequate and sufficient training as regards the tasks provided for by the contract, in order to avoid any possible and specific risks involved in the performance of the said tasks.

2. Collective agreements signed by the comparatively most representative Unions can provide for the means to facilitate the access of fixed term hired employees to adequate training facilities, in order to improve their qualifications, enhance their career and better their working prospects.

The present reform should have reinforced the rights of fixed-term-hired workers, by granting them adequate training which, in its turn, would enhance their professional career - as provided for in EU norms. However, the present norm has but blandly transferred this principle. As for the first subparagraph, in fact, it contains obligations stated also in Law n. 626 of 1994 which refers to all categories of workers, while as for training obligations, they are not in charge of employers, but of Collective Agreements.

Art. 8.

Calculation criteria

1. In order to fulfil the obligations stated in article 35 of Law n. 300 of 20th May 1970, workers hired with a fixed term employment contract are to be counted in if their contract lasts more than nine months.

Art 35 of the Workers’ Statute defines the application field of the disposition contained in Paragraph III, concerning trade unions activities (i.e. assemblies, leaves of absence, referendum). Fixed-time workers, therefore, are counted in for this calculation, but only if their work contract lasts longer than nine months. This principle could well have been applied also to calculations made for dismissals, as provided for in article 18 of the Workers’ Statute, which hasn’t been considered.

Art. 9.

Information

1. Collective agreements signed by the comparatively most representative Trade Unions define the means by which fixed time workers are to be informed about vacant posts available in the firm, in order to grant them the same possibilities to obtain an indefinite time employment contract as other workers.

2. The same collective agreements contain the means by which workers’ representatives are to be informed about fixed term posts available.

Another novelty introduced by the present norm concerns the right of fixed term workers to information, as already provided for by Law 1999/70. It refers to both collective and individual information, whose means are once again referred to collective agreements.

Art. 10.

Exceptions and specific norms

1. The present decree is not applied to the following, as already regulated from specific norms:

  1. fixed time employment contracts as provided for in law 24th June 1967, n. 196, and its amendments;
  2. training contracts;
  3. apprenticeship, as well as all the type of contracts connected with training which, even though they are regulated by contracts, are not actual employer-employee relationships.

2. The present decree is not applied to work contracts between agricultural employers and fixed term hired workers as defined in article 12, subparagraph 2, of decree n. 375 of 11th August 1993.

3. In the field of tourism and shops, collective agreements signed by local or national representatives of the most significant Trade Unions Organizations make it possible to directly hire workers to carry out special services which do not last longer than three days. The accomplished hiring must be communicated to the local competent authority (the "centro per l’impiego") in five days time. To these kind of contracts the present decree is not applied.

4. The signing of fixed term employment contracts is allowed, provided they do not last longer than five years, with executives ("dirigenti"), who can nonetheless withdraw from them after three years and in conformity with article 2118 of the Civil code. To these kind of contracts the present decree is not applied, except for what concerns articles 6 and 8.

5. The decree is not applied to contracts signed by firms operating in the field of export, import and wholesale trade of fruit and vegetables.

6. Norms provided for in article 8, subparagraph 2, of the law of 23d July 1991, n. 223, article 10 of the law of 8th March 2000 n. 53 and article 75 of the law of 23d December 2000, n. 338 are still in force.

7. The fixing of limited quantities, even if not fixed quantities, in the use of fixed term employment contracts signed in conformity with article 1 , subparagraph 1, is referred to collective agreements signed by the most representative national Trade Unions Organizations. Time fixed employment contracts are always exempt from quantity limits when:

a) they have been signed during the starting phases of new activities for periods which shall be defined by collective agreements, admitting for different limits in different areas or market-sectors;

b) by reason of substitution or seasonal work, including the activities mentioned in the list attached to Decree 7th October 1963, n. 1525 and the following amendments; c) because of the increase of work during particular times of the year;

d) for specific entertainments, i.e. specific radio or television broadcasts. Fixed term employment contracts are exempt from quantity limits when they are signed at the end of a training or stage period, and are used to promote the employment of new young workers, when they are signed by workers older than 55, or signed with employees hired for the specific execution of tasks or services which are temporary, extraordinary or occasional.

8. Fixed term employment contracts which do not fall within those provided for in subparagraph 7, and which do not last more than 7 months, including the occasional extension, or which do not last more than what is provided for in collective agreements with reference to difficult employment situations in specific areas are exempt from quantity limits. The exemption just mentioned is not applied to single contracts signed for the aforementioned periods of time and that concern tasks for which similar fixed term employment contracts had already been signed and have consequently terminated.

9. Collective Agreements signed by the most representative National Trade Unions Organizations are in charge for fixing a right of precedence in the hiring in the same firm and for the same tasks in favour of workers who have already been employed by means of a fixed term employment contract for the cases provided for in article 23, subparagraph 2, of law 28th February 1987, n. 56. workers hired by means of the aforementioned right of precedence do not fall in for the calculations of the percentage of reserve described in article 25, subparagraph 1, of the law 23 July 1991, n. 223

10. In any case, the right of precedence its terminates within a year from the termination of the employment contract and the worker can exercise it on condition that he manifests to the employer his intention to do so within three months from the termination of the contract.

The present norm lists all the existing norms in the field of fixed term employment contracts and exempts them from the application field of the new law. Thus, for example, the new discipline of fixed term employment contracts can’t be applied to cases specifically disciplined by the law on temporary work, nor can it be applied to training contracts, nor to apprenticeship, nor stage which do not constitute an employment contract. It also confirms what has already been settled by past legislation concerning fixed term employment contracts for Executives. As already provided for by article 4 of the law n. 230 of 1962, in fact, it is possible to seal a fixed term employment contract lasting less than 5 years with executives, who can nonetheless recede from it after the first three years, by giving the due notice, in conformity with article 2118 of the Civil Code. Executives are then expressively excluded from the application field of the new law, excepting for what concerns articles 6 and 8: which means that for these kind of employees there is no need for validity requirements in order to make the fixing of a term possible; the latter will thus always be valid, provided it is fixed within the approved time limits. In particular, there will be no need for justifications. The non-discrimination principle shall instead be applied to Executives as well.

Collective agreements are in charge for determining the percentage of allowed fixed term employment contracts - but no longer deputed to establish new or further applications of fixed term hiring. Collective agreements stipulated by the most representative national Trade Unions Organizations shall therefore fix the highest percentage of fixed term employment contracts to be signed. The lack of a normative limitation and the common-law-system which now regulates collective agreements do not make it possible to extend this limits to employers who are not members of any Trade unions organizations and who do not apply collective agreements. In this case, according to the spirit of the norm, there shall be no quantity limitations for the signing of fixed term employment contracts. Likewise, the same impossibility to extend the norm to employers who do not apply collective agreements might be advanced with reference to the right of precedence in hiring which from now on shall be introduce in collective agreements. It must be noted that this right was generally provided for in article 23 of the law n. 56 of 28th February 1987, article 8-bis of law n. 79 of 25th March 1983: both these norms have been repealed with the following article 11.

Limitation of quantity, anyhow, is not applied to fixed term employment contracts signed during the starting phases of new business activities or to all the cases already mentioned in law n. 230 of 1962 as the only ones in which it was possible to stipulate fixed term employment contracts (i.e. substitutions, seasonal work, specific entertainments or the intensification of work). Finally, there are no limits to fixed term employment contracts signed at the end of trainings or stage, or stipulated with workers over 55 years of age, or to brief contracts (less than 7 months).

Art. 11.

Repeal and transitory discipline

1. From the issuing of the present decree, law n. 230 of 18th April 1962 and the following amendments, article 8-bis of law n. 79 of 25th March 1983, article 23 of law n. 56 of 1987, as well as all other provisions which are incompatible with it, even if they are not listed here, are hereby repealed.

2. As to the effects deriving from the repeal of the dispositions mentioned in subparagraph 1, all clauses in collective agreements stipulated according to article 23 of the aforementioned law n. 56 of 1987 and valid at the time in which the present law comes into force shall temporarily - and unless other agreements have been reached - keep their validity until the termination of national collective agreements. 3. Individual contracts defined in accordance of the pre-existent discipline shall be valid until their termination.

4. Norms provided for in articles 4 and 5 do not apply to all artists and technicians employed in musical foundations as described in decree n. 367 of 29th June 1996.

With the issuing of the present decree, all articles of law n. 230 of 18th April 1962, as well as article 8-bis of law n. 79 concerning seasonal work of 25th March 1983, and article 23 of law n. 56 of 1987 which made it possible for collective agreements to fix further cases in which to recur to fixed term employment contracts, shall be repealed.

This norm, however, provides for a transition period in which employers will have to comply, except in case of newly stipulated agreements, with the dispositions provided for in currently valid collective agreements, until the said agreements come to their termination, i.e., in case of an ultra-validity clause, to their renegotiating. Thus we can call the whole process a staggered deregulation, although it is not easy to define its limits. We think that this provision wants to maintain the limitations concerning fixed term employment contracts provided for by collective agreements - obviously only up to the agreements’ own termination. These limitations are not those provided for in article 1, in that the reasons for their introduction are neither technical, nor organizational, nor productive nor substitutions. Thus, among the various cases of fixed term employment contracts not provided for by this decree, only fixed term employment contracts provided for by national collective agreements will still be valid, albeit transitorily, and they shall be subjected to the limitations fixed by the same collective agreements. We do not exclude, however, that jurisprudence might furnish other possible interpretations of this norm, especially when we consider CGIL’s disagreement on this matter.

Art. 12.

Sanctions

1. In case of non-compliance with the obligations deriving from article 6. the employer is punished with an economic sanction from Lit. 50.000 ( 25,82) to Lit. 300.000 ( 154,94). If the non-compliance concerns more than 5 workers, the sanction rises from Lit. 300.000 ( 154,94) to Lit. 2.000.000 ( 1.032,91).

Finally, sanctions inflicted in case of non-compliance with the dispositions contained in article 6, i.e. concerning the non-discrimination principle between fixed term workers and indefinite term workers, have not changed, but are still the same contained in law 230 of 1962.

This information has been prepared by the firm as a service to our clients. As it is a general guide we recommend that you seek professional advice before taking action. No liability can be accepted by the firm for any action taken as a result of this information.

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If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions