INL: clarifications on the amendments made by the Decreto Sostegni (Support Decree) bis to the rules on reasons for fixed-term contracts

With note no. 1363 of 14 September 2021, the National Labour Inspectorate (“INL”) provided some clarifications concerning the amendments made by Decree Law no. 73/2021 ( “Decreto Sostegni bis“) to the regulation of the reasons for fixed-term contracts.

New reason

The “Decreto Sostegni bis“, as converted by Law no. 106/2021, supplemented the rules set out in Art. 19 of Legislative Decree no. 81/2015, introducing the first part (letter a), the possibility for collective bargaining (at the national, local and corporate level) to identify specific needs for the stipulation of a fixed-term contract lasting more than 12 months. These requirements are in addition to the other justifying reasons set out in the same Article.

As for the “specific needs” substantial features, INL clarified in the circular in question that the rule does not set any content constraints since they are only required to be specific and actual and avoid generic formulations.

INL pointed out that the delegation to collective bargaining to identify the reasons affects the stipulation of the first contract for a period longer than 12 months and the rules governing renewal and extension, under art. 21 of Italian Legislative Decree no. 81/2015.

The addition of one of the reasons identified by Art. 19 is always required (under penalty of conversion of the fixed-term contract into an open-ended contract) for renewals and extensions only when the contract duration exceeds 12 months.

It will be possible to renew or extend a fixed-term contract under the new collective bargaining provisions (specific needs)

Time limit

By letter b) of the same paragraph 1 of Art. 41 bis, paragraph 1.1 was added to Art. 19, according to which “the time limit exceeding 12 months, but not exceeding 24 months, referred to in paragraph 1 of this Article, may be applied to employment contracts which meet the specific needs provided for by the collective labour agreements referred to in Article 51, under letter b-bis) of the same paragraph 1, until 30 September 2022“.

Many interpretative doubts had arisen concerning the application scope of the 30 September 2022 time limit under the new provision.

The INL note dispelled any uncertainty, clarifying that the time limit (30 September 2022) for the use of the new reason (needs identified by collective bargaining):

• applies only to a first fixed-term contract with an initial duration of more than 12 months; while
• does not apply to renewals and extensions.

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In the light of INL’s clarifications, we can conclude that:

• until 30 September 2022, it will be possible to stipulate a first fixed-term contract with an initial duration of more than 12 months, according to the needs identified by collective agreement (and the other reasons determined by Art. 19 of Legislative Decree 81/2015).  And the deadline of 30 September, as clarified by INL, refers to the contract formalisation, which may provide for a relationship duration which exceeds that date (subject to the overall limit of 24 months);
• after 30 September 2022, it will be possible to stipulate a first fixed-term contract with an initial duration of more than 12 months, but only by using the other reasons set out in Art. 19 and 1 of Italian Legislative Decree no. 81/2015, namely:
• temporary and objective needs, unrelated to normal operations, or needs to replace other workers;
• needs associated with temporary, significant and unforeseeable uptakes in normal operations.
• the rules on renewals and extensions are not time-bound. It will be possible to extend or renew fixed-term contracts on the grounds provided for by collective bargaining (in addition to the other reasons mentioned above), even after 30 September 2022.

Other related insights:

• DID YOU KNOW THAT… The Decreto Sostegni (Support Decree) confirmed the possibility of company agreements to incentivize termination of employment?
• Exceptions to the motivation obligation in fixed-term contracts and the reason behind the Inspectorate’s note of 12 May 2021