Law no. 178/2020, Budget Law 2021, has been published in the Official Gazette no. 322/2020. Among the numerous initiatives put in place, it is worth mentioning, as far as employers are concerned, the measures aimed at coping with the effects of the epidemiological emergency on employment. In particular, here we refer to the forms of protection of employment positions for the year 2021 through Cigo, ordinary allowance, Cigd and Cisoa treatments.
In parallel with the employment support measures, there is a freeze on dismissals for objective reasons, until 31 March 2021, which obliges employers to keep workers employed even if they are redundant with respect to organisational and production needs. Article 1, paragraph 300 of Law No. 178/2020 provides for a new period of wage subsidies with a maximum total duration of 12 weeks. The rule provides that the above-mentioned weeks must be placed in the period between 1 January 2021 and 31 March 2021 for Cigo treatments and in the period between 1 January 2021 and 30 June 2021 for ordinary allowance and Cigd treatments. They represent the maximum duration that can be requested with reason “COVID-19” and the periods of wage supplementation previously requested and authorised under Article 12, Decree-Law 137/2020, placed, even partially, in periods after 1 January 2021, are counted, if authorised, to the 12 weeks introduced by the Budget Law. No additional contribution will be paid for the new period.
Recipient workers are also those hired after 25 March 2020, but in force as of 1 January 2021.
Applications for access to wage subsidies must be submitted to Inps by the end of the month following the month in which the period of suspension or reduction of work began. In case of direct payment, the employer is obliged to send to the Institute all the necessary data for the payment or the balance of the wage supplement by the end of the month following the month in which the period of wage supplement is placed, or, if later, within the term of 30 days from the adoption of the provision of granting.

The Cisoa wage supplement for agricultural workers requested for events related to the COVID-19 epidemiological emergency is granted, by way of derogation from the ordinary limits, for a maximum duration of 90 days, in the period between 1 January 2021 and 30 June 2021. The application must be submitted, under penalty of forfeiture, by the end of the month following the month in which the period of suspension of work began. Periods of integration previously requested and authorised, placed, even partially, in periods subsequent to 31 December 2020, are counted against the 90 days introduced by Law 178/2020. Periods of supplementation authorised pursuant to Decree-Law 104/2020, and pursuant to Article 1, paragraphs 299-314, Law 178/2020, are counted for the purpose of meeting the requirement to consider as agricultural workers permanent employees and other workers, also on an indefinite-term basis, who annually carry out a number of days of actual work, on the same farm, in excess of 180.

Contribution exemption
Private employers, with the exception of those in the agricultural sector, who do not apply for the social shock absorbers provided for by the Budget Law, can benefit from the exemption from the payment of social security contributions charged to them, with the exclusion of premiums and contributions due to INAIL. The exemption is granted for a maximum period of 8 weeks, in addition to the period indicated in Decree-Law 104/2020, which can be used by 31 March 2021, within the limits of the hours of wage subsidies already used in May and June 2020, adjusted and applied on a monthly basis. The actual amount of the exemption may not exceed the employer’s contribution due for the individual months in which the measure is intended to be used, for a maximum period of three months, it being understood that the exemption may also be used for the full amount on the report relating to a single month, where there is sufficient capacity. For the purpose of calculating the exemption, in line with the instructions already provided, the remuneration lost in May and June 2020 should be taken into account, plus the additional monthly payments, taking into account the full contribution rate theoretically due and not any contribution benefits due in the above mentioned months. The benefit is subject to the authorisation of the European Commission, pursuant to Article 108(3) TFEU. Employers who have applied for the exemption from the payment of social security contributions introduced by the Ristori Decree may renounce for the fraction of the exemption requested and not used and, at the same time, apply for access to the wage supplementation treatments referred to in Article 1, paragraphs 299-314, Law 178/2020.




Article 1, paragraph 363 of the 2021 Budget Law (Law 178/2020) provides for an increase in the number of days of compulsory father’s leave from 7 to 10 for children born or adopted in 2021.
As of this year, compulsory leave is also due in case of prenatal death of the unborn child.
The leave must be taken within 5 months of the birth or adoption of the child.
The possibility for the father to take an additional day of optional leave remains in force.




With the recent Budget Law 2021 (L. 178/2020), on the subject of subsidised recruitment, the legislator merely revisits, albeit in an expanded form, a number of measures already operative in our system.

Hiring young people
The 2018 Budget Law introduced a form of facilitated hiring that proposed a tax relief for the hiring, with an open-ended employment contract with increasing protections, of young workers who had not reached the age of 35 and had not been employed on an open-ended contract with the same or another employer. The limit of the relief was set at 50 per cent of the social security contributions (excluding INAIL) to be paid by the employers, up to a maximum amount of €3,000 on an annual basis (to be recalculated on a monthly basis).
For the two-year period 2021-2022, for new open-ended hirings and for the transformation of fixed-term contracts into open-ended contracts, the above-mentioned exemption is granted at the rate of 100%, for a maximum period of 36 months, up to a maximum amount of €6,000 per year; these cases now concern persons who, at the date of the first hiring or contractual transformation, are under 36 years of age.
Beware, since the rather stringent requirement that these young people must never have been employed, on a permanent basis, by the hiring employer or by another employer, remains valid. Please note that the following exceptions to this prohibition apply:
• “any periods of apprenticeship spent with another employer and not continued in an open-ended relationship are not an obstacle to the recognition of the exemption”;
• “in the event that the worker for whom the exemption provided for in paragraph 100 has been partially used on a permanent basis is again hired on a permanent basis by other private employers, the benefit is granted to the same employers for the residual period needed to make full use of the benefit, irrespective of the worker’s age at the date of the new hiring”.
For anti-avoidance purposes, it is also provided that the exemption in question “is available to employers who have not, in the six months preceding the hiring, nor will they, in the nine months following the hiring, proceed with individual dismissals for objective reasons or collective dismissals, pursuant to Law No. 223 of 23 July 1991, with respect to workers with the same qualifications in the same production unit”.
The new incentive will also not be applicable, while the old 2018 discipline will be applicable, in the following hypotheses:
• in cases of continuation, after 31 December 2017, of an apprenticeship contract into an open-ended relationship” (it was for a maximum period of 12 months);
• to private employers who hire, with an open-ended employment contract with increasing protections, within 6 months from the acquisition of the qualification, e.g. in cases of school work or professional diploma at the employer’s premises (where a total exemption was envisaged).
An extension of the benefit, up to 48 months, is foreseen for the following Regions: Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia.
Finally, the following general provisions on subsidised recruitment apply as grounds for ineligibility:
• Article 31, L. 150/2015: if the incentivised hiring constitutes the implementation of a pre-existing obligation, established by law or by collective bargaining; if the incentivised hiring violates the right of precedence, established by law or by collective bargaining, to the re-employment of another worker dismissed from an open-ended relationship or terminated from a fixed-term relationship; if the employer has in place work suspensions related to a crisis or corporate reorganisation; in reference to those workers who have been dismissed in the previous 6 months by an employer, which, at the time of dismissal, has ownership structures substantially coinciding with those of the employer who hires, or is with the latter in a relationship of connection or control;
• L. 296/2006: possession by the employers of the Durc; compliance with the obligations of the Law and of the national, regional, territorial and company collective agreements and contracts, stipulated by the most representative employers’ and workers’ unions at national level.
The effectiveness of the provision is subject to EU authorisation.

Hiring women
Amending the provisions of Law 92/2012 – concerning the facilitated hiring of women of any age, without regular paid employment for at least 6 months, provided they reside in regions eligible for funding under the European Union’s structural funds, identified annually by a specific decree, or women of any age without regular paid employment for at least 24 months, wherever they reside – the recent legislation provides for a reduction in social security contributions of 100% and up to a maximum amount of €6,000 per year.
Attention is paid to the specific regulatory requirement, according to which the eligibility for relief is conditioned by the fact that such new hirings must entail a net increase in employment calculated on the basis of the difference between the number of workers employed in each month and the average number of workers employed in the previous 12 months.
In order to avoid circumvention, it is specified that the required increase must also be considered net of decreases in the number of employees in subsidiaries or associates.
The above-mentioned limits set by Law 150/2015 and Law 296/2006 also apply to this benefit, and the EU authorisation is required.

Decontribution in the South
A rule provided for in the so-called August Decree (Decree-Law 104/2020) is also amended, which was intended to facilitate employment relationships whose place of work is located in regions that in 2018 had a per capita gross domestic product lower than 75% of the EU27 average or, in any case, between 75% and 90%, and an employment rate lower than the national average.
This exemption from social security contributions was equal to 30% of the employers’ social security contributions (excluding INAIL premiums).
According to the new amendment, this exemption, which will apply until 31 December 2029, is regulated as follows:
• 30% of the total social security contributions to be paid until 31 December 2025;
• 20% of the total social security contributions to be paid for the years 2026 and 2027;
• 10% of the total social security contributions payable for the years 2028 and 2029.




Article 1, paragraph 279, Law 178/2020 (Budget Law 2021), extended until 31 March 2021 the acausality regime for extensions and renewals of fixed-term contracts, provided for by Decree-Law 104/2020 until 31 December 2020.
In particular, the regime of derogation on causality for extensions and renewals, granted only once, for a maximum period of 12 months and within the limit of 24 months, as provided for by Article 93, Decree-Law 34/2020, and as subsequently amended by Article 8, Decree-Law 104/2020, under which the validity of the measure was extended to 31 December 2020 from the original 30 August 2020, was extended until 31 March 2021.
As in so many other passages of the Budget Law, the Legislature has slavishly and superficially reproduced the content of the previous emergency Decrees, modifying only their date of validity.
The derogation provided for concerns Article 21, Legislative Decree no. 81/2015, which, as is well known, ordinarily provides for the obligation of one of the reasons contained in Article 19, paragraph 1, in the event of extension leading to a duration of the relationship exceeding 12 months, or always, regardless of the duration, in the event of renewal.
In light also of what is stated in the INL note no. 713/2020, contracts signed pursuant to Article 93, Decree-Law no. 34/2020, in addition to not being subject to the obligation to provide a reason, do not have to comply with the mandatory breaks (10 or 20 days depending on the duration of the contract) in case of renewal and are not subject, as regards extensions, to the limit of 4 extensions.
Therefore, for fixed-term contracts expiring until 31 March 2021, if the maximum limit of 24 months has not yet been reached, it will be possible to proceed, once only, with an extension or renewal, of a duration not exceeding 12 months, without the obligation of a reason.
As mentioned above, if an acausal extension/renewal has already been made under Article 93, a further derogation is precluded.
Obviously, if a fixed-term contract has been extended, without a reason, because the overall duration was less than 12 months (in which case the application of the derogation rule is not necessary), and is due to expire between 1 January 2021 and 31 March, it may be further extended on an acausal basis for a maximum period of 12 months and up to a limit of 24 months.
If it has already been extended four times, the derogation allows not only for the reason not to be specified, but also for the fifth extension.
Entering, then, into the merits of the deadline set for the emergency rule, it should be noted that the date refers to the time of conclusion of the extension or renewal, not the expiry of them. Therefore, the expiry date of the contracts may go well beyond 31 March, the important thing being that they are signed by 31 March 2021.
The possibility of early extensions for contracts expiring after 31 March 2021, a hypothesis which from a contractual point of view does not present any irregularity, so as to benefit from the acausality, could entail risks for the employer. In fact, it should be recalled that there is a precedent on this issue, referring to the entry into force of the Dignity Decree, where it was established that the extension, unlike a constitutive contract, is relevant precisely at its functional moment, i.e. at the time when it takes effect, and it is precisely at that moment that the applicable rules are determined (Court of Milan, 22 June 2020).
The same Court of Milan, ina judgment of a few days later (10 August 2020), came to the opposite conclusion, pointing out in a much more straightforward manner that it is the moment of signature of the deed that determines the applicable rules. While this reading seems to be the correct one, or at least closer to the general principles of civil law, the risks of an unstable jurisprudential framework are evident (as we obviously cannot wait for legitimacy rulings).




The Budget Law for 2021 contains the pre-announced extension of the prohibition on dismissals related to the ongoing pandemic, in continuity with what was provided, most recently, by the Ristori Decree until 31 January 2021, but already before by the Cura Italia, Rilancio and Agosto Decrees, albeit with some adjustments to the different regulatory texts.
Therefore, until March 31, 2021, the procedures under articles 4, 5 and 24 of Law 223/1991 are precluded, and pending procedures initiated after February 23, 2020 are also suspended, except in cases where the staff affected by the termination, already employed in the contract, is rehired following the takeover of a new contractor by virtue of law, collective bargaining agreement or clause of the contract.
Until the same date, the employer is also precluded, regardless of the number of employees, from withdrawing from the contract for justified objective reasons, pursuant to Article 3 of Law 604/1966, and the procedures underway pursuant to Article 7 of the same Law are also suspended.
It should be noted that, with the conversion into law of Decree-Law 104/2020 (the so-called August Decree-Law), the possibility to revoke the dismissal for objective justified reason intimated in violation of the legal prohibition, introduced by the Relaunch Decree and then extended by the August Decree itself, but not confirmed, has disappeared. It remains possible to revoke the dismissal in the version introduced by Law 92/2012 within 15 days from the communication to the employer of the challenge to the dismissal.
With the extension of the prohibition by the Ristori Decree, the link between the possibility of proceeding with gmo dismissals and the full use of the COVID-19 shock absorbers or, alternatively, the exhaustion of the social security relief has also disappeared.
In case of non-compliance with the prohibition, labour inspectors may issue a provision, granting the employer a deadline to revoke the dismissal, which, if not complied with, may lead to the application of a sanction between €500 and €3,000, which cannot be deferred, without prejudice to the possibility that employer and employee reach an agreement to accept the dismissal, presumably not without economic incentives.

The suspensions and exclusions do not apply:
• in the event of redundancies motivated by the definitive cessation of the undertaking’s activity, following the liquidation of the company without any continuation, even partial, of the activity, in cases where in the course of the liquidation there is no transfer of a group of assets or activities that may constitute a transfer of the undertaking or a branch of it pursuant to Article 2112 of the Civil Code;
• in the hypothesis of a company collective agreement, entered into by the most representative trade unions at national level, of an incentive to terminate the employment relationship, limited to the workers who adhere to the aforementioned agreement; these workers are in any case entitled to the NASpI treatment;
• redundancies announced in the event of bankruptcy, when there is no provision for the provisional exercise of the undertaking, or when it is ordered to be closed down. In the event that the provisional exercise is ordered for a specific branch of the undertaking, redundancies in branches not included in the same branch are excluded from the prohibition.
It seems appropriate to recall that dismissals do not fall within the boundaries of the prohibition:
• disciplinary (for just cause or subjective reason);
• for exceeding the period of comporto;
• of managers (with some caution);
• during or at the end of the probationary period;
• of domestic workers;
• of apprentices at the end of the training period.
According to INL, on the other hand, the hypothesis of supervening unfitness for work is included in the exclusions.



With the Decree of the Ministry of Labour of 15 December 2020, published in the Official Gazette on 14 January 2021, companies in difficulty due to the COVID-19 emergency will be able to apply for the CIGS for company crisis even in the absence of the recovery plan and with suspensions of work even in derogation to the limit of 80% of the hours that can be worked in the production unit in the time frame of the authorised programme.
The Decree, in fact, provides that, for the year 2020 and, in any case, until the end of the epidemiological emergency, for the purposes of approving the company crisis programme resulting from the sudden and unforeseen event of the COVID-19 pandemic, external to the company management, referred to in Article 21, paragraph 1, letter b), Legislative Decree 148/2015, and Article 1, Ministerial Decree 94033/2016, the case is assessed, without prejudice to the protection of employment, with reference to the periods of validity of the emergency measures limiting production activity:
• also in the absence of the recovery plan provided for in Article 2, letter c), Ministerial Decree 94033/2016, and
• with suspensions also in derogation of the limit set out in Article 22, paragraph 4, Legislative Decree 148/2015.


LDP Payroll stays at your disposal for any further information,

Arianna De Carlo
Head of Payroll Department

LDP provides Tax, Law and payroll  scalable and customised services and solutions. LDP Professional have also matured a significant expertise in  M&A, Corporate Finance, Transfer Price, Global Mobility Consultancy and Process Automation. 

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