Decree Extension
With the publication in the Official Gazette of D.L. 132/2023 (commonly known as the “Decree Extensions”), in force since September 30th:
- The right to remote work for so-called “super fragile” workers has been extended until December 31st.
- A temporary extension has been granted for the reorganization of the Ministry of Labor until November 30, 2023.
- Payments of taxes, contributions, and insurance premiums due from July 4th to July 31st, 2023, by individuals who, as of July 4, 2023, had their residence or registered office or operational headquarters in one of the municipalities affected by the meteorological events in the Lombardy region, are considered timely if paid in a lump sum by October 31, 2023.
Regarding pandemic-induced smart working, the deadline for “super fragile” individuals has been further extended to December 31st, similar to the previously established deadline for parents of children under 14 and for vulnerable workers (identified as such by the competent medical professional due to increased risk of contagion within the scope of exceptional health surveillance). Therefore, employers must ensure that public and private employees affected by chronic conditions with low clinical compensation and with a particular severity as identified by the Ministry of Health on February 4, 2022, continue to perform their work remotely until that date. This may include assigning them to a different task within the same category or classification, as defined by current collective labor agreements, without any reduction in salary, and subject to the application of the provisions of the respective national collective labor agreements, where more favorable than the law.
Initial ministerial clarifications on the labor decree
D.L. 48/2023, in force since May 5, 2023, and converted, with modifications, by L. 85/2023, in force since July 4, 2023, has modified the regulations on fixed-term employment contracts (Chapter III, Legislative Decree 81/2015). The Ministry of Labor, through Circular no. 9/2023, has provided initial guidance on the changes, specifying that its Circular no. 17/2018 continues to apply for non-incompatible parts with the new provisions introduced by D.L. 48/2023 and the guidelines outlined in the current circular.
| Unchanged Aspects | Maximum duration limit for fixed-term employment relationships between the same employer and the same employee (24 months, except for different provisions in collective agreements, under Article 19, paragraph 2, Legislative Decree 81/2015). |
| Possibility of further stipulating a fixed-term contract, with a maximum duration of 12 months, at the ITL (Article 19, paragraph 3, Legislative Decree 81/2015). | |
| Maximum number of allowed renewals for fixed-term contracts (maximum of 4 in 24 months). | |
| Interruption regime between one fixed-term contract and another (so-called stop and go). | |
| Modified Aspects | Conditions that can legitimize the imposition of a term on the employment contract. |
| Extensions and renewals of fixed-term contracts. | |
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Fixed-term Relationships
Conditions
As for the regulations on conditions justifying the imposition of a term on the employment contract (Article 19, Legislative Decree 81/2015), the previously mentioned conditions have been completely removed:
- For temporary and objective needs unrelated to ordinary activities (former letter a);
- For needs related to temporary, significant, and non-programmable increases in ordinary activities (former letter b).
- The new conditions emphasize the role of collective bargaining in identifying cases where a term exceeding 12 months within the maximum duration of 24 months can be imposed on the contract:
- The new letter a) reaffirms the prerogative, already recognized in collective bargaining, to identify such cases, provided it is done by national, territorial, or company-level national collective agreements stipulated by trade unions that are more representative on a national level, and by company-level collective agreements stipulated by RSAs of these associations or by the RSU;
- The new letter b) specifies that, in the absence of provisions referred to in letter a), which includes all levels of collective bargaining, conditions can be identified by company-level collective agreements (in compliance with Article 51, Legislative Decree 81/2015, regarding the qualification of the contracting parties). It introduces the possibility for the parties to the individual employment contract (in the absence of specific provisions in collective agreements) to identify technical, organizational, or productive needs justifying the imposition of a term exceeding 12 months (but not beyond 24), temporarily until April 30, 2024, a date referring to the signing of the employment contract. Therefore, the duration of the contract may extend beyond April 30, 2024.
The Ministry also clarifies that:
- If collective agreements simply refer to legal cases under D.L. 87/2018, they may be considered outdated by the new regulations, with the consequent possibility of resorting to company-level collective agreements or, only until April 30, 2024, the exercise of autonomy by the parties to the individual employment contract;
- If collective agreements contain reasons attributable to the former Article 19, paragraph 1, letter b-bis) (inserted by Article 41-bis, D.L. 73/2021), they can continue to be used for the duration of the collective agreement;
- Causes introduced by any level of collective bargaining (as defined by Article 51, Legislative Decree 81/2015) that identify concrete conditions for using fixed-term contracts can still be used, as long as they do not simply refer to legal cases under the previous regulations, now outdated by the reform. The new letter b-bis), lastly, reaffirms the employer’s possibility, already provided for earlier, to use fixed-term contracts to replace other workers. Although the wording used is partly different from the previous one (which referred to the need to replace other workers), the Ministry confirms the obligation for the employer to specify in the contract the concrete and effective reasons for the replacement, especially if the employer intends to benefit from the advantages associated with specific hiring scenarios for replacement.
D.L. 48/2023 has also repealed paragraph 1.1, Article 19, Legislative Decree 81/2015 (inserted by Article 41-bis, D.L. 73/2021), which temporarily recognized, within the framework of pandemic emergency measures, the possibility for collective agreements to identify specific needs to impose terms on fixed-term employment contracts exceeding 12 months but not exceeding 24 months. However, this possibility is now permanently confirmed by the new letter a).
For fixed-term contracts entered into by public administrations, private universities (including branches of foreign universities), public research institutes, public companies promoting research and innovation, or private research entities with workers involved in teaching, scientific or technological research, knowledge transfer, support for innovation, technical assistance, or coordination and direction thereof, Article 19, paragraph 1, Legislative Decree 81/2015 does not apply (both the overall maximum term of 24 months and the new reasons indicated by D.L. 48/2023, with the previous reasons provided by Article 36, Legislative Decree 165/2001, which allows the use of such contracts only in the presence of “proven needs of an exclusively temporary or exceptional nature” with mandatory indication, regardless of the duration of the employment contract). On this point, subject to any clarifications from the Department for Public Administration, the Ministry specifies that the maximum duration of fixed-term contracts remains 36 months.
Extensions and Renewals
In light of the changes, paragraph 1, Article 21, Legislative Decree 81/2015 now more uniformly regulates the regime of extensions and renewals, which, in the first 12 months, can occur freely without specifying any conditions (required for subsequent periods), with the transformation of the contract into an indefinite-term contract for violations of the specified provisions. Regarding the distinction between extensions and renewals, what was explained in Circular no. 17/2018, § 1.1, still applies (the extension presupposes that the reasons justifying the initial fixed-term employment remain unchanged, except for the need to extend its duration, with the consequence that it is not possible to extend a contract by changing its justification, as this would result in a new fixed-term contract falling under the renewal discipline, even without a break in the previous relationship; the renewal scenario also occurs if a new fixed-term contract starts after the expiration of the previous contract).
During the conversion into law of the decree under discussion, a provision was introduced to allow additional causeless fixed-term contracts for a maximum of 12 months, regardless of any previous relationships between the same employer and the same employee before May 5, 2023. Specifically, the provision states that, for the purpose of reaching the maximum limit of 12 months (provided for both the original establishment of the relationship and for causeless extensions and renewals), only contracts entered into from May 5, 2023, are considered. This excludes any fixed-term relationships that may have occurred between the same parties earlier. This provision is in effect from July 4, 2023, and as a result, employers can freely resort to fixed-term employment contracts for an additional period (maximum) of 12 months, without having to resort to specific conditions, regardless of any relationships already established with the same employee through contracts entered into before May 5, 2023. The term “contracts entered into” refers to both renewals of previous fixed-term employment contracts and extensions of contracts already in force. For example, if a fixed-term contract established before May 5, 2023, expires after that date, it can be freely renewed or extended for an additional 12 months; if between May 5 and July 4, 2023, a contract was renewed or extended for 6 months, the employer can use the fixed-term contract for an additional period not exceeding 6 months “without conditions.”
Staff Leasing Relationships
Upon the conversion of the decree, Article 31, paragraph 1, Legislative Decree 81/2015 on indefinite-term staff leasing was modified:
- For the purpose of complying with the limit of 20% of the number of permanent workers in force with the user on January 1, unless otherwise indicated by collective agreements applied by the user, temporary agency workers hired with an apprenticeship contract by the leasing agency do not count;
- Quantitative limits for the leasing of certain categories of workers, explicitly identified, including unemployed individuals who have been receiving non-agricultural unemployment benefits for at least 6 months or social safety nets, and disadvantaged or very disadvantaged workers, do not apply.
It should be noted that disadvantaged workers are those who meet, alternatively, one of the following conditions:
- have been without regular paid employment for at least 6 months;
- are aged between 15 and 24 years;
- do not have a high school or vocational school diploma (ISCED 3 level) or have completed full-time education no more than 2 years ago and have not yet obtained their first regular paid job;
- are over 50 years old;
- are adults living alone with one or more dependents;
- are employed in professions or sectors characterized by a gender pay gap exceeding at least 25% the average gender pay gap in all economic sectors if the worker belongs to an underrepresented gender;
- belong to an ethnic minority of a EU Member State and need to improve their linguistic and professional skills or work experience to increase prospects for stable employment.
Very disadvantaged workers fall into the category of those without regular paid employment for at least 24 months and those who, without regular paid employment for at least 12 months, belong to one of the categories indicated in letters b to g above.
LDP is available for any further clarifications.
