Italy: Impending Changes To Legislation

With the publication in the Official Gazette no. 155/2021 (June 30, 2021), the text of Law Decree no. 99/2021 entered into force and confirmed the ban on dismissals only for the most crisis-ridden sectors until October 31, 2021, conceding at the same time the possibility to textile, clothing and leather industries to request 17 further weeks of Ordinary wage supplementation support ("Cassa Integrazione Ordinaria") for Covid reasons to be used by October 31, 2021. It provided also for the possibility for other companies, that have exhausted the possibility of having otherwise access to social shock absorbers and are facing particularly difficult crisis, to request another 13 weeks of Extraordinary wage supplementation support ("Cassa Integrazione Straordinaria") by the end of 2021.

With the entrance into force of Law Decree no. 99/2021, that follows that of Decree-Laws 41/2021 (so called Sostegni) and 73/2021 (so called Sostegni-bis), the dismissal ban has taken on a variety of deadlines and limits, due to various factors, which it is useful to clarify and set out in a systematic manner.

Law decree 41/2021

Originally, as of March 17th 2020, art. 46 of Legislative Decree n. 18/2020 introduced a dismissal ban for objective reasons aimed at facing the economic consequences of Covid-19 spread. This provision was then prorogated by the Law Decree n. 41 of March 22nd 2020, which introduced two different deadlines for the ban: on one side, for companies entitled to receive the so called "Cassa Integrazione Ordinaria", generally belonging to the industrial sector, the deadline was June 30, 2021, while for companies excluded from the ambit of the "Cassa Integrazione Ordinaria", and so entitled either to the Ordinary Allowance or the "Cassa in Deroga" (different kind of ordinary social shock absorbers) the deadline is October 31st, 2021.

The reason of the split of the mentioned deadline is likely to be identified in the smaller average size of the companies benefiting of the Ordinary Allowance or the "Cassa in Deroga", which furthermore belong to the economic sectors (for instance services, commerce, food & beverages, tourism) more affected by the Covid 19 and that have suffered higher business decrease.

This is therefore a differentiated freeze which, up to the dates envisaged, does not depend on the actual use of the social shock absorbers granted by the same decree to both categories of companies.

Law decree 73/2021

As the 30 June deadline approached, various exceptions to the release from the prohibition on dismissal were gradually introduced. With reference to companies that have access to the "Cassa Integrazione Ordinaria", the Law Decree 73/2021 introduced two exceptions to the release started from July 1^st 2021:

• companies that make use of the "Cassa Integrazione Ordinaria" (or even Extraordinary in case of crisis / reorganization) within the period from 1 July to 31 December 2021 are precluded from executing dismissals, even after June 30, but only for the period of actual use of the said social shock absorbers;
• companies that, having suffered a 50% drop in turnover in the first half of 2021 compared to the first half of 2019, enter into a defensive solidarity contract (that is a company collective contract that allows to reduce the working hours of employees in order to avoid dismissals) for a maximum term of 26 weeks within the period from May 26 to December 31, 2021. In such a case, dismissals are prohibited for the time in which the solidarity contract is in force.

Law decree 99/2021

The last decree maintained the two different deadlines provided for the dismissals ban above said (June 30 for companies that can apply to "Cassa Integrazione Ordinaria" and October 31 for all the others), but added two further exceptions to those already existing:

• textile, clothing and leather industries may request a further 17 weeks of "Cassa Integrazione Ordinaria" for Covid reasons, to be used in the period between July, 1 and October 31, 2021. These companies are precluded from executing dismissals for objective reasons until 31 October 2021. This is regardless of the actual use of the shock absorbers;
• companies that have exhausted the access to social shock absorbers provided for by the law may request, in order to be able to face situations of particular economic difficulty, further 13 weeks of Extraordinary wage supplementation support ("Cassa Integrazione Straordinaria") to be used by December 31, 2021. In such case, those companies are precluded from executing dismissal for the period of actual use of the said social shock absorbers.

It's also important to highlight that all general exceptions to the ban on redundancies, which have been included in successive decrees for almost a year, have remained unchanged. The cases that escape the prohibition are those of personnel involved in a change of contract to which a 'social clause' applies, dismissals motivated by the definitive cessation of the enterprise (with or without liquidation of the company), dismissals due to bankruptcy (when the provisional exercise of the enterprise is not ordered) and consensual terminations of employment incentivized within the framework of company collective agreements.

A small figurative recap

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