Italy: Economically dependent self-employed work in the Jobs Act
Labour law reforms under the Jobs Act have ended new job contracts based on one or more specific projects. From 2016, this type of contract will be assimilated into another type of employment contract. Workers whose contracts are expiring are entitled to receive an income support measure called ‘DIS-COLL’, based on their creditable service.
The labour law reform implemented by the Cabinet of Prime Minister Matteo Renzi and set out in the Jobs Act (Law 183/2014) envisages an in-depth review of rules governing different forms of economically dependent self-employed work.
So far, Italian legislation on quasi-subordinate work has featured limitd, inadequate forms of basic protection. This has led to the misuse and exploitation of dependent self-employment contracts, such as the continuous and coordinated contractual relationships (contratti di collaborazione coordinata e continuativa), including those based on one or more specific projects (contratti di collaborazione a progetto), very often with the aim of disguising proper employment relationships.
Given these crucial issues, the reforms adopted over the years initially tried to combat forms of continuous and coordinated contractual self-employment relationships by reclassifying them under the new type of contracts based on one or more specific projects (Legislative Decree 276/2003, Biagi reform). Such forms of contractual relationships were subsequently classified as proper employment relationships if certain conditions were fulfilled (Law 92/2012, Fornero reform).
Economically dependent self-employment work in the new framework of contract types
The Labour Contracts Code (Legislative Decree 81/2015) or 'JACode' of the Jobs Act aims to change the pattern of existing job contracts to bring them more in line with today’s occupational and productive needs at both national and international level. The JACode eliminates job contracts based on one or more specific projects (Articles 61–69a of Legislative Decree 276/2003, now repealed). In the debate at political and trade union level in recent years, this type of job contract has been denounced as the worst kind of job precariousness.
Starting on 1 January 2016, the rules governing employment will also apply to contractual relationships that result in exclusively personal and continuous work activities whose methods of implementation – also in relation to timing and workplace – are organised by the principal (Article 2, paragraph 1, Legislative Decree 81/2015). The only forms of quasi-subordinate work that are still allowed are:
- collaboration relationships envisaged and governed by collective bargaining agreements aimed at meeting the productive and organisational needs of specific sectors;
- forms of collaboration provided for in the framework of intellectual professions for which enrolment in specific professional registers is required;
- forms of collaboration provided by members of boards of directors or of audit committees of businesses;
- forms of collaboration provided in the sports sector.
The reform is therefore designed to hinder the possibility of misusing self-employment contractual forms. Continuous and coordinated contractual relationships that are predominantly personal in nature can still be established, but are no longer covered by specific regulations aimed at protecting workers.
Further to the restrictions introduced on self-employment, the most flexible type of contracts seems to be 'mini-job' relationships. The JACode sets out the scope and rules of this type of contract under which workers are paid through ‘labour vouchers’. It also eliminates the limitations in the use of this type of contract introduced in previous legislation.
A mini-job is an ‘occasional’ working activity that can be offered in all production sectors, with the exception of the public procurement of works and services. The new norm increases the cap on pay for mini-jobs to €7,000 a year. However, the overall payment for a mini-job performed for a single principal – entrepreneur or professional – cannot exceed €2,000. Principals can purchase labour vouchers only through an online procedure. Before the activity begins, principals must inform the relevant Territorial Labour Office (DTL) of the worker’s personal data and the place where the work activity is to be carried out. The duration of the activity cannot exceed 30 days.
The JACode extends the use of labour vouchers to people who benefit from social safety nets. It stipulates that mini-jobs can be performed in all production sectors, including local authorities, and for an overall payment of up to €3,000 per calendar year. This financial compensation can be supplemented with income support measures.
Economically dependent self-employed work in the new framework of active and passive labour policies
From the social security point of view, the Jobs Act – unemployment schemes in case of termination (Legislative Decree 22/2015) or ‘JAUE’ – includes the provision, on an experimental basis for 2015, of unemployment benefits to workers hired under continuous and coordinated contracts or under contracts based on one or more specific projects. This type of contract will disappear under the changes introduced by the JACode. The extension of protection against unemployment to these types of workers, although much debated, has been trialled several times since 2008.
The DIS-COLL indemnity is granted to workers hired under continuous and coordinated contracts or under contracts based on one or more specific projects. In addition they must be enrolled in the special pension fund for atypical workers of the National Institute of Social Security (INPS), not have a VAT number, and have involuntarily lost their job. More specifically, the indemnity is granted to those workers who have:
- at least three months’ contributions paid in the period from 1 January of the calendar year preceding the termination of employment to the beginning of the unemployment period;
- one month’s contributions paid in the calendar year in which the contractual relationship comes to an end.
Working activities can be performed for half the number of weeks for which social security contributions have been paid. However, the maximum duration cannot in any case exceed six months.
The indemnity is equal to 75% if the monthly pay received by the worker amounts to €1,195. It is increased by 25% for pay over this threshold. The maximum indemnity amounts to €1,300 per month and decreases by 3% each month starting from the fourth month.
People who receive DIS-COLL can benefit from an ‘outplacement contract’, a new tool designed to support unemployed people in the search for a new job. This system has been used in several countries, mainly in northern Europe. In Italy, it has been trialled to a limited extent by some regions and in specific sectors.
Under an outplacement contract, the unemployed person is entitled to receive a voucher, funded by the Active Policies Fund, for a variable amount depending on their professional profile and the difficulties they are experiencing in finding a new job. The voucher can be spent by the unemployed person on a public or private service that helps people find work. This service will only receive the payment specified by the voucher if its recipient is successfully re-employed. Through this incentive, the government hopes to develop and boost Italian active labour policies, which are traditionally weak and not very effective.
Social partners’ point of view
The new regulations on economically dependent self-employed work have been welcomed by employers' organisations. The General Confederation of Italian Industry (Confindustria) supports the government objective of stopping the misuse of different types of work collaboration. However, it considers that the new rules unduly extend the scope of proper employment relationships. The Italian Enterprise Network (R.ETE. Imprese Italia), which represents five confederations of small and medium enterprises (SMEs), however, has stressed the need to further simplify the administrative procedures relating to ancillary labour.
Trade unions have adopted a more critical stance. They do not like the the breadth of scope of ancillary labour and the revival of collaboration forms envisaged by the Italian Civil Procedure Code. They allege that these are not supported by forms of protection in favour of workers and could therefore lead to an increase in job precariousness.
The Italian General Confederation of Work (CGIL) has also criticised DIS-COLL because it does not provide a comprehensive form of protection intended to support income, which was one of the original goals of the Jobs Act.
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 reshaping of employment relationships, the rationalisation of inspection activities, the reorganisation of active labour market policies, and the new rules on job tasks.