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.


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.

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Law 30 December 2020, no. 178 (2021 Budget Law) introduced a new protection period from 1 January 2021 to the following 28 February for public and private at-riskemployees. INPS clarified this with its message no. 171 of 15 January. This protection involves equating the period of absence from work to hospitalisation for workers in possession of certification indicating their at-risk status. They must provide documentation about their disability or risk condition resulting from immunosuppression or the results of oncological diseases or due to life-saving treatments. Equating the absence with illness means recognising the worker’s financial benefit and contribution within a maximum period provided for by the legislation for the employee qualification and working sector. In addition: This protection allows the at-risk employee to carry out their duties in smart working, including (i) the assignment to different tasks included in the same classification category or area, as defined by collective agreements or (ii) the performance of specific vocational training activities which can be done remotely.

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Budget Law 2021 covers a wide range of measures in labour, taxation, liquidity support areas and business development and, in 1,150 paragraphs, outlines the financial manoeuvre rules.

Art. 1, paragraph 279, of Law 30 December 2020, no. 178, extended until 31 March 2021 the possibility of extending or renewing fixed-term contracts by repealing the strict and controversial obligation to include reasons introduced in the fixed-term contracts’ general regulations by Legislative Decree no. 81/2015 ( Jobs Act), as amended by the Dignity Decree (Decree Law 87/18 as converted by Law 96/18).

This important exception, which provides newfound flexibility in the use of fixed-term contracts, was first introduced by the Relaunch Decree until 31 August 2020, extended until 31 December 2020 and further extended until next spring by the Budget Law. This “favourable” extension or renewal is allowed only once and for a maximum of 12 months, within the maximum duration limit of fixed-term employment contracts of 24 months.

Continue reading the full version published in Guida al Lavoro of Il Sole 24 Ore.

Italian Law no. 178 of 30 December 2020 (known as “Budget Law”) has extended the provision of salary supplements due to COVID for a further 12 weeks. Unlike what was envisaged by the previous measures, this time the financial support is free. This means that employers are not required to pay an additional contribution in the event of a reduction in turnover of less than 20% compared to 2019 or in the absence of contraction. The 12 weeks must be used within the timeframe between (i) 1 January 2021 and 31 March 2021 for the ordinary financial support fund and (ii) 1 January 2021 and 30 June 2021 for the “Assegno Ordinario” and “Cassa Integrazione in Deroga” wage supplements. On the other hand, employers that do not require the financial support measures in question are exonerated from paying social security contributions (excluding premiums and contributions due to INAIL (Italian workplace accidents insurance institution)) for a maximum of 8 weeks, which can be used by next 31 March. This exemption is limited to wage supplement hours paid in the months of May and June 2020 and is benchmarked and applied on a monthly basis.

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