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09.102014

JOBS ACT – LABOUR MARKET REFORM – SENATE APPROVES BILL ALLOWING AMENDMENTS ON ARTICLE 18

In its session on Wednesday 8 October the Senate approved the government amendment, entirely replacing the delegating bill no. on labour (so-called “Jobs Act”), the approval of which the Executive had called a confidence vote. The text of the proposal now passes to the Chamber for a second debate.

The main contents of the current version of the bill are highlighted below based on the above major amendment, that focuses on long-term contracts and allows amendments on article 18.

  1. Long-term contracts amendments and increasing protection

For the amendment of long-term contracts the Government will draw inspiration from two main fundamental points: (i) place priority on long-term contracts, making it more convenient compared to other types in terms of direct and indirect costs; (ii) long-term contracts for newly hired employees, with increased protection based on seniority, also through the expected amendments on article 18.

  1. Dismissals and article 18: rehiring or economic compensation

Also in order to privilege long-term contracts, the Government is authorised to make changes to article 18, Law no. 300/70 and, at the current status of the talks, the following interventions are likely: (i) for dismissal on economic grounds, rehiring will be eliminated, replaced by a “ certain and increasing” economic compensation, based on seniority. It remains to be seen of the elimination of rehiring only involves individual dismissals or also collective ones; (ii) through the amendment of article 18 a dual system for disciplinary dismissals would be introduced: rehiring for the most serious unjustified dismissals, in the other cases a defined and certain economic compensation; (iii) for discriminatory dismissals rehiring will be reconfirmed.

  1. Unemployment benefits not for company activity termination

The possibility of unemployment benefits in the case of companies or company branches which go out of business will be excluded; bureaucratic procedures using electronic and digital instruments will be simplified; the introduction of standardised approval mechanisms and implementation of certain and payable instruments; access to unemployment benefits will be possible only after all contractual possibilities of reducing working hours have been attempted. In the event of involuntary unemployment, the aim of the proposal is to standardise the application of unemployment benefits, with the extension of ASPI (unemployment benefits for certain categories) to long-term consultants.

  1. Demotion for crisis within specific limitations

Demotion in the event of a company crisis may only occur based on objective parameters with precise “limits to the modification of job status” and must take into account “the interest of the company in the useful employment of personnel” and “the interest of the worker in safeguarding his job, professionalism and lifestyle and economic conditions”. Collective bargaining, “ including company or second level”, may identify other possibilities.

  1. Amendments on remote control discipline

A “revision of subsequent controls, taking into account technological evolution" is envisaged, but at the same time " company production and organisational needs" must take into account the "protection of the workers’ dignity and confidentiality".

  1. Maternity and family protections and safeguards

To protect maternity leave and balance between free time and work the following will be done: (i) recognition of the categories of workers benefiting from maternity leave from a broader perspective; (ii) guarantee semi-subordinate workers the same benefits even when contributions are not paid by the employer; (iii) introduction of a tax credit for female workers with minor or disabled children; (iv) provide incentives for forms of balancing work and family life, such as telecommuting; (iv) allow the granting of vacation time to colleagues who need to take care of children.

  1. Single labour inspection agency

Labour market reform will focus on inspections. A single agency is planned to be established for labour inspections, by integrating the inspection departments of the Ministry of Labour, INPS and INAIL in a single structure, setting up instruments and forms of coordination with the inspection units of local healthcare agencies and regional environmental protection agencies.

  1. Outplacement and employment agencies

For the outplacement of unemployed or never previously employed the proposal sets down active policy principles which connect support measures to income and those for outplacement, including with agreements with employment agencies who take over the people to outplace and are paid “ based on the actual hiring at least for an adequate period”.