DLP Insights

No redundancy benefits if the company closes (Il Sole 24 Ore, 10 April 2015, page 40)

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The definition of “definitive closure” of a business needs to be clarified.
For the overhaul of social shock absorbers in terms of employment, as required by the Jobs Act, the desire of the legislator is to limit the application framework of these instruments, as well as to rid them of the primarily welfare connotation they have assumed over time.
The first principle and guideline criterion of the decree law (183/2014) is the impossibility of authorising unemployment benefits in the case of companies which go out of business permanently.  The requirement of “permanent” in the closure of the business is the result of approval of an amendment which modifies the text transmitted by the Senate and which instead confirmed the impossibility to authorise unemployment benefits in the mere case of closure of a company’s activities or one of its business units.
One wonders if for the exact definition of the expression “permanent closure” the legislator is referring, through a contrasting interpretation, to the criteria (including the use of measures aimed at activating actions for continuation of the company business or recovery of its business; manifestations of interest from third parties; workshops in government or regional venues, aimed at identifying operating solutions for the continuation or recovery of activity) of the ministerial decree 70750/2012 issued to implement the contents of law 92/2012 concerning extraordinary redundancy benefits and bankruptcy proceedings.
Law 183/2014 also includes the need of regulating access to redundancy benefits only when all contractual possibilities of reducing work hours have been used. It should be noted on this point, already in terms of exceptional social shock absorbers, Ministerial Decree 83473/2014 states that “in order to benefit from exceptional unemployment benefits the company has to have first used ordinary flexibility instruments, including the use of remaining holiday time”.
Additional criteria contained in the decree law concern the review of the limits of duration in terms of the maximum number of hours which can ordinarily be worked during the time the redundancy benefits and extraordinary redundancy benefits are applicable and identification of rotation mechanisms. In particular, in terms of mechanisms to provide incentives for rotation one wonders if the possibility of deviating from them will be permanently excluded, as is currently allowed under article 1, paragraph 8, of law 223/1991.
The decree law continues including a greater contribution from user enterprises. This is a bonus-malus mechanism: the more the shock absorbers are used the higher the contribution the user enterprise is responsible for. With the aim of a more equal social division of expenses connected with social shock absorbers, the legislator has established special rates, so to say, based on the sectors and actual use of the shock absorbers.
The government would like to streamline things with this reform by reviewing the application framework of redundancy benefits, extraordinary redundancy benefits and solidarity funds. Thus there will be no more overlapping: it seems like it will no longer be possible to choose between various institutions for the same type of case. In keeping with what is described above, the legislator has also proposed to review the application framework and operating rules for solidarity contracts.


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