Published in the Official Gazette no. 176 of 24 July 2021, Law no. 106 of 23 July 2021, (hereafter the “Conversion Law“), converting Decree-Law no. 73 of 25 May 2021containing “urgent measures related to the COVID-19 emergency, for businesses, work, young people, health and regional services” Support Decree-bis). The measure entered into force the day after its publication in the Gazette, i.e. on 25 July.

Below are the main measures provided for by the “Support Decree-bis” in the employment field, some of which were introduced during its conversion.

Fixed-term and staff leasing contracts

Until 30 September 2022, it is possible to:

• extend or renew fixed-term and staff leasing contracts in the presence of needs provided under the collective agreements referred to in Art. 51 of Legislative Decree no. 81/2015 (i.e. by collective agreements at national level or second level which are signed by the most representative trade unions at national level);
• stipulate a fixed-term contract for more than 12 months, but not exceeding the maximum threshold of 24 months, against specific grounds defined by the same collective agreements described above.

Dismissal prohibition

The conversion law incorporates the provisions of the recent Decree-Law no. 99/2021, and repeals the prohibition of individual dismissals for financial reasons and collective dismissals, merging it into the “Support Decree-bis.”

The prohibition applies:

• until 31 October 2021, for companies covered by the FIS Ordinary Allowance, bilateral solidarity funds and CISOA, and companies in the textile, clothing and leather and similar industries, identified by Ateco codes 13, 14 and 15;
• until 31 December 2021, for companies in the trade, tourism and spa sectors (to which the extension of the prohibition until 31 October 2021 would apply) which, from 26 May 2021, apply for and obtain the exemption from the payment of social security contributions provided for by the ” Support Decree-bis.” This provision has been extended to the creative, cultural and entertainment sector;
• for the duration of the wage subsidy granted, to be used by 31 December 2021, for companies which (a) from 1 July 2021 apply for the “ordinary” CIGO or CIGS funds, availing themselves of the exemption from paying the additional contribution or (b) having reached the limits for the use of the “ordinary” CIG fund, under art. 40 bis of Law Decree no. 73/2021, apply for exceptional CIGS fund to face financial difficulties;
• for the duration of the wage subsidy, to be used by 31 December 2021, for industrial and craft enterprises which, having suffered in the first half of 2021 a 50 per cent drop in turnover compared to the first half of 2019, after having signed a defensive solidarity contract, apply for exceptional CIGS fund Legislative Decree no. 148/2015. This is to obtain a special subsidy of 70 per cent of the salary and not subject to the additional contribution.

Exceptions to the prohibition are confirmed for dismissals motivated by a definitive cessation of business, liquidation, bankruptcy, or collective company agreement on redundancies.

Wage subsidies

In addition to confirming the measures provided for by the “Support Decree-bis” and partially mentioned above, the Conversion Law re-proposes the measures provided for by the repealed Decree-Law no. 99/2021 to ensure continuity of the effects produced by its provisions, and particularly:

• the six-month extension of the CIGS for terminated companies in the air transport sector and the corresponding increase in the air transport solidarity fund;
• an additional 17 weeks of Covid Redundancy Fund from 1 July to 31 October 2021 for companies in the textile sector identified by the above Ateco codes;
• An additional 13 weeks of CIGS fund from 1 July to 31 December 2021 for industrial companies that can no longer use the “ordinary” CIGO and CIGS funds because they have reached the maximum use limit provided by Legislative Decree no. 148/2015.

Expansion contract

The original provision of the Support Decree-bis under which companies with less than 100 employees can sign an expansion contract was confirmed. This tool allows retraining of workers using the redundancy fund and access to favourable early retirement plans for those who are no more than 60 months from age or early retirement.

Re-employment contract

The introduction of the re-employment contract, i.e. the open-ended employment contract aimed at encouraging the integration of unemployed workers into the labour market, was confirmed. An employment condition to be hired under a re-employment contract is for an individual project to last six months and ensure the worker’s professional skills meet the new work situation. This is subject to the worker’s consent.

At the end of that period, the parties may terminate the contract by giving notice from the same date. If neither party terminates the contract, the relationship continues as an ordinary open-ended employment relationship.

The re-employment contract allows exemption from social security contributions for employers who hire unemployed workers from 1 July to 31 October 2021. In the six months before recruitment, the exemption is granted to employers who have not made individual dismissals for objective justified reasons.

Other related insights:

• DID YOU KNOW THAT… The Decreto Sostegni (Support Decree) confirmed the possibility of company agreements to incentivize termination of employment?
• In case of suspension of production, wage subsidies take priority over daily sickness benefits 
• An interview with Vittorio De Luca on labour market hot topics is in today’s L’Economia of Il Corriere della Sera

With order 16382/2021, the Court of Cassation once again ruled on the critical issues connected with the relationship between wage subsidies anddaily sickness benefits. In accordance with well-established case law, the Court pointed out that, where the ordinary lay-off scheme concerns a case of suspension of production and not merely a reduction in working hours, the related wage subsidy replaces the daily sickness benefit in relation to workers who are absent due to illness.

This case derives from a petition brought by a female employee who asked the Court to declare that the conciliation reached with the company was null and void and, for the matters of interest here, to order payment of the difference in salary due to her unlawful placement on the extraordinary lay-off scheme during suspension of employment due to illness.

The First Instance Court and the Court of Appeal rejected the claimant’s requests, ruling out, in particular, the possibility of challenging the conciliation and the ensuing presence of the alleged defects of non-existence of the reciprocal concessions – since the conciliation had taken place in a protected venue in accordance with Article 2113 of the Civil Code – as well as the validity of the claim for payment of salary differences due to the worker’s unlawful placement on the extraordinary lay-off scheme by virtue of the applicability, due to the same rationale, of Article 3 of Law 464/1972.

Continue reading the full version published on Il Quotidiano del Lavoro of Il Sole 24 Ore.