JOBS ACT: THE ACT ISSUED BY GOVERNMENT UNDER PARLIAMENTARY DELEGATION TAKES SHAPE

The night before Christmas, the Italian Government has approved the first of the decrees meant to implement the reform legislation approved by the Parliament by the beginning of December, affirmed as aimed at deeply reforming the most sensitive aspects of Italian employment law (i.e., mainly shock absorbers, dismissals and incentives to employment and re-employment). For sure the implementation decree in question, ruling a new discipline applicable to dismissals, is the most awaited Decree among the others which the Government has announced to pass quickly.



The “original” discipline of dismissals, passed in 1970 and debated for decades thereafter, had already found its first attempt to reformation in 2012, after the Monti premiership. With this decree, the present Government seem to overpass in several aspects such previous reformation. However, differently from it, it did not change the rules for those who benefit of the “old” discipline already, excluding from its applicability those who are already hired by employers staffed with more than 15 employees, this representing a undoubtable limitation to the immediate impact of the decree on a significant portion of employers/employees already engaged in an employment relationship.



The new rules will be applicable from the effective date of the Decree, which is forecasted for January 2015.



The following are the main changes regarding safeguards for employees who have been unlawfully dismissed.



a)    Increasing benefits



Without prejudice to those remaining cases in which employees’ security applies (see letter c) below), in those cases where dismissal for disciplinary or financial reasons has been declared unlawful the employee in question shall be due financial compensation only.



The amount of such compensation shall be based on the cause of unlawful dismissal, the size of the company or undertaking, and the years of service of the employee (“a tutele crescenti”, progressively increasing safeguards), and more specifically:



i.    in most cases: 2 months’ pay for each year of service, up to a maximum of 24 months’ pay and subject to a minimum of 4 months’ pay;

ii.   in cases of inadequate grounds for dismissal, or of the lack of the due disciplinary procedure: one month’s pay for each year of service up to a maximum of 12 months’ pay and subject to a minimum of 2 months’ pay;

iii.  in the case of small companies (with no more than 15 employees): the compensation is halved and may not exceed the upper limit of 6 months’ pay.



b)    Deflationary measures: rapid settlement and the annulment of dismissal



In order to encourage the rapid settlement of disputes, it has been established that within the deadline for challenging dismissal out of court (60 days), the employer, in order to avoid legal proceedings, may offer the dismissed employee one month’s pay for each year of service up to a maximum of 18 months’ pay and subject to a minimum of 2 months’ pay. 

Furthermore, in the event of annulment of dismissal within the term of fifteen days following notification of the challenge to such, the employee shall be seamlessly reinstated and shall be entitled to any pay that has accrued, without application of the penalties provided for by the decree.



c)    When reinstatement continues to apply



The decree confirms the reinstatement of the employee in cases of discriminatory or invalid dismissal, or dismissal notified verbally, and in the event of dismissal on disciplinary grounds, in the case of inexistence of the claimed act or fact given as grounds for dismissal.