Italy: Draft bill to limit number of contract types

A draft bill aimed at organising existing employment contracts in Italy is expected to become law in the next few weeks.

The Jobs Act and the new bill are designed to tackle precariousness. They aim to:

• eliminate atypical contracts, such as joint venture (associazione in partecipazione) and job sharing;
• restrict the use of dependent self-employment contracts (contratto a progetto).

The government hopes that reducing number of different types of employment contracts will cut down the level of litigation affecting many employment relationships. The non-binding opinions of the parliamentary labour committees on the bill have already been given. 

The draft law also aims to recast the individual employment relationships listed below. It should be noted that its provisions do not modify all types of existing contracts. In some cases, the Government only summarised previous regulations, including those enacted as part of the labour law reforms in March 2014 (Decree Law 20 March 2014, no. 34, converted into Law 16 May 2014, No. 78).

Employment contract types

Fixed-term  contracts

Regulation of this type of contract will remain substantially in line with previous legislation. In fact, the rules governing it were amended last year by Law 16 May 2014, No. 78. The draft bill, however, provides that fixed-term contracts can be stipulated between the worker and the firm for a maximum of 36 months; or for 48 months, in the case of an individual agreement between employers and employees under the auspices of the Territorial Labour Office (DTL). Employers are no longer obliged to state the specific reason for the contract; the contract can be renewed up to a maximum of five times within the maximum overall period of 36 months, and can be used for up to 20% of the total workforce. Collective bargaining agreements at national, company or local level can change this percentage. If the maximum time limit is exceeded, a fixed-term contract becomes a permanent one. Infringements of the rules will incur administrative sanctions.

The draft law applies the calculation of the maximum period of 36 months to the individual employment contracts in relation to the ‘performance of equivalent tasks’ and not to  the ‘performance of any task’ as stated by the current legislation. 

Temporary employment contracts

The bill introduces a statutory limit to the number of temporary agency workers a company can use (10% of the workforce can have open-ended contracts), unless agreed otherwise by national collective bargaining agreements. This calculation does not include unemployed people benefiting from a six-month unemployment allowance (with the exception of agriculture sector unemployment benefits).

Texting and emails

The bill allows people to tell the DTL that they are starting a job by using sms and email.

Mini-jobs

Intermittent work done by the same worker can be paid for with vouchers which include social security contributions. The draft law increases the net annual amount a worker can earn to €7,000 per year, in terms of the total number of contractors; €2,000 per year, with reference to the amount received from each employer. 

Apprenticeship contracts

The bill makes no changes to this type of contract, which was revised in 2014 by Act No. 78/2014. This set out that the recruitment contract and the probation agreement must be in writing, but that a written individual training programme is no longer required. The act also stated that workers must be paid for at least 35% of the time they spend in training, unless agreed differently by collective bargaining.

Part-time contracts

The draft law also regulates part-time contracts. It states that any overtime cannot exceed 15% of the weekly working hours agreed in the individual contract, and must be paid for at an hourly rate equal to 15% of the wage. Again, this can be changed by national collective bargaining.

Flexible clauses, if not set by national collective bargaining, can be agreed by the employer and employee at a conciliation commission. However, working time cannot be increased by more than 25% of the yearly working hours agreed in the individual contract. Again, any additional working time has to paid at an hourly rate equal to 15% of the wage.

The draft law also offers workers the opportunity to change from full-time to part-time employment instead of taking parental leave (but this can occur only once and it has to be done before child’s twelfth birthday).

Workers also get the opportunity to convert full-time contracts into part-time ones if they, or a close family member, is suffering from a chronic degenerative disease not already covered by law (such as cancer or a permanent work disability).

Opinion of the Parliamentary Labour Committees

Non-binding opinions on the bill from the Senate Chamber Labour Committee and the Deputy Chamber Labour Committee were issued on 13 and 14 May 2015 respectively. They gave it their general approval but suggested making its provisions clearer. The committees recommended:

• keeping the joint venture contract, to ensure employees and temporary agency workers are treated equally;
• extending the obligations of the user undertakers;
• including jobs-on-call in the framework of part-time work.

The Senate Labour Committee also suggested reducing the limits applying to fixed-term employment, apprenticeships and mini-jobs.

The act should receive final approval in mid-June.

For a complete overview of the Jobs Act reform, please see our articles addressing: the new dismissal regime, the reform of unemployment benefits and of temporary unemployment benefits, the rationalisation of inspection activities, the reorganisation of active labour market policies, the new rules on job tasks, measures targeting economically dependent self-employed work.