The “Salva Infrazioni” decree is in force – Main changes in the regulation of fixed-term contracts in the private sector

On 16 September was published in the Official Gazette the Decree-Law no. 131/2024 (i.e. “Decreto Salva Infrazioni”) – in force since 17 September – which also intervened on the regulation of fixed-term contracts through which the European Union requested Italy to align Italian legislation with EU Directive 1999/70/EC on fixed-term work.

The “Salva Infrazioni” decree amended Article 28, paragraphs 2 and 3 of Legislative Decree No. 81/2015 (i.e. “Jobs Act”), introducing significant changes regarding the compensation indemnity for damages in case of fixed-term contracts declared unlawful. 

Pre-existing regulation:

• In cases of transformation of a fixed-term contract into an open-ended contract, the employee is entitled to a lump sum indemnity ranging from 2.5 to 12-months’ salary of the last reference salary for calculating severance pay.

The maximum limit of the indemnity is reduced to 6 months’ salary in the case of collective agreements that provide for procedures to stabilize fixed-term workers.

Amendments introduced by Decree-Law No. 131/2024:

• The Decree gives to the judge power to set compensation indemnity exceeding 12-months’ salary in cases of unlawful fixed-term contracts,
• Paragraph 3, which allowed the limit of the indemnity of the 6 months’ salary, is abolished.