“Too much protection and rigidity. The three reasons limit business operations” (L’Economia del Corriere della Sera, 27 August 2018 – Vittorio De Luca)

Too much protection and rigid obligations. The Dignity Decree is an insidious and difficult law to apply. In the opinion of attorney Vittorio De Luca, Managing Partner of the Law Firm De Luca & Partners, specialised in labour law, “now more than ever, businesses must pay significant attention to the reasons that legitimate the use of fixed term contract and to the finalisation of the related reason. In fact, they represent the main pitfalls of the new law on fixed term contracts”. Indeed, the decree “does not limit itself to call for the obligation to provide a reason for the use of the fixed term contract, but also requires that the reason be due to ‘temporary, significant and non-programmable increases’ of the ordinary business activity. In the case of a dispute, it is difficult, in the majority of the cases, for businesses to provide proof that all three requirements have been met”, the attorney explains. The obligation to provide the reasons has been introduced for the first time in the Italian legal system in 1962, with the Law 230, in a completely different economic context compared to the current one. Only in 2014 it was finally abrogated. Now, the rules have changed again. It will take 12 to 18 months for the labour law expert to see if the changes introduced will help in promoting open-term employment. However, I am afraid that the transformation of fixed term contracts into open-term contracts hoped for by the government will not occur. If this were to be the case, I hope the law-makers will have a change of heart on the effectiveness of the new regulation”, De Luca adds.
“In addition, the requirement to add a reason may drive companies to enter into three 12-month contracts with three different people, rather than hiring a single person for three years. In this case, the possibilities for a stabilisation of the relationship would be reduced significantly”.
To discourage “the excessive use of fixed term contracts”, as it is in the intentions of the government, it would be better to work on the reduction of the tax and social security contribution burden associated with open-term contracts.