To assist its readers with employees in Italy has obtained the kind permission of Squire Sanders “best friend” firm VTCS to reprint its newsletter on recent reforms to Italian employment law.

New Reform of Italian Employment Law: Enchancement of Employment and Simplification for Companies

Decree No. 34/2014 – enacted this morning- enters into force today 21st March 2014 with immediate effect. However, its provisions will lose effect if they are not enacted in a new Law by the Parliament within 60 days.

Fixed-Term Contracts (“Contratti a tempo determinato“)

Decree no. 34/2014 significantly reforms fixed term contracts.
a) Originally, fixed-term contracts could be entered into only (i) if the employer has specific temporary technical, organization, production or substitutions needs or (ii) without any need for such reasons for the first employment contract ever with an employee, for a maximum duration of 12 months. As of today, any candidate may be hired on a fixed-term basis, without any need for any temporary reason, for an overall maximum duration of 36 months, inclusive of any extensions of the original contract.

b) Originally, it was highly questionable whether the duration of a fixed-term contract could be extended more than once. According to Decree 34/2014, extensions are allowed up to a maximum of 8 times, within the overall duration of 36 months. This, provided that the employee is assigned to the same duties for the overall duration.

Temporary Agency Work (“Somministrazione a tempo determinato”)

The provisions mentioned above concerning fixed-term contracts apply also to fixed-term employment contracts entered into in the framework of temporary agency work.

Apprenticeships (“Apprendistato“)

Apprenticeship is a contract that combines employment and training.  It entails tax and social security advantages for the employer in terms of reduced costs. The major innovations introduces by Decree 34/2014 are as follows:

(i)  employer shall pay 100% of worked hours, but is allowed to remunerate no less than 35% of the time dedicated to training;

(ii)  attending public course is no longer mandatory;

(iii)  it is no longer required that the “Individual Training Plan” is in writing, while only the contract and the probationary period undertaking (if any) shall be in writing.

Certification of Compliance with Social Security and Insurance Payments  (“Regolarità contributiva” )

Decree No. 34/2014 provides for the introduction of IT methods for the access to data concerning employers’ compliance with their obligations to pay social security and insurance contributions. These will in most cases avoid the need for paper documents requested to and issued by the relevant Social Security Agency.