The Budget Law extends the exception to extensions and renewals of fixed-term contracts

According to ordinary fixed-term contract rules (Art. 19 et seq. of Legislative Decree no. 81/2015), the extension exceeding 12 months and a renewal must be justified by one of the following reasons:

• 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,

under penalty of changing the contract into a permanent relationship.

The dangers of serious economic and employment relations damage led the legislator to introduce specific exceptions for fixed-term contracts, as part of the regulatory framework to deal with the Covid-19 epidemic.

Art. 1, paragraph 279, of Law 30 December 2020, no. 178 ( Budget Law) extended until 31 March 2021 extending or renewing fixed-term contracts without the obligation to provide reasons.

This extension ensures greater flexibility, and was first introduced by the “Relaunch Decree” until 31 August 2020, then extended until 31 December 2020 by the “August Decree” and now extended by the Budget Law until next spring.

Under the above emergency legal framework extending or renewing without providing a reason is only allowed once. This means that, even if the regime’s expiry date is changed from 31 December 2020 to 31 March 2021, those who have already benefited from an extension or a renewal under the August Decree cannot use it again under the Budget Law.

A further condition provided for by the law concerns the maximum extension or renewal duration without providing a reason, of 12 months, without prejudice to the maximum total duration, when added to other periods of 24 months.

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The exception rules contained in the August Decree, and amended by the Budget Law up to the regime’s final term, have generated many interpretation doubts. Deviation from the rules governing the “stop and go” (i.e. the time that, according to the ordinary rules, must elapse between a contract stipulation and its subsequent renewal) and the maximum number of extensions.

Due to the legislator’s objectives and the wording used, The National Inspectorate of Labour, with its note no. 713 of 16 September 2020, specified that

• if the relationship has been extended four times, it will be possible to further extend its duration for a maximum of 12 months, and
• it will be possible to renew it even before the expiry of the buffer period, provided that the maximum of 24 months is met.

Other insights related:

• New exceptions to extensions and renewals of fixed-term contracts in the Budget Law