Italy: The New Labour Reform In Italy: What's New And What's Old?

Last Updated: 11 September 2018
Article by Giuseppe Bologna and Stefano Becich Di San Servolo

On 11th August 2018 has been published the Law no. 96 of 9th August 2018 (the "Law") for the conversion of the Dignity Decree no. 87 of 12th July 2018 (the "Decree").

The Law has introduced a transitory system for some pro visions contained into the Decree and regarding the dura tion, the renewals and the extensions of the fixed term em ployment contracts.

We rebuild the various disciplines applicable in relation to the dates of stipulation of the various institutes. Below is also a summary of the discipline of dismissal as amended by the Decree.




The extension / renewal shall be done in written form and shall indicate the grounding reasons (with the exceptions of the cases in which the grounding reasons is not required). The grounding reasons can be:

  • temporary and objective, unrelated to the ordinary acti vity of the employer,
  • substitution of other workers,
  • connected to temporary, significant and non- programmable increases in ordinary activities.


The failure of the regulation on the fixed term employment contracts implies the following sanctions:

in case of fixed term employment contract lasting more than 12 months signed without the indication of the grounding rea- sons, such contract will be converted into an open term employment contract from the exceeding of the 12 months' term. In case of renewal / extension of the fixed term employment contract (over 12 months, if permitted, as above indicated into the chart) without the indication of the grounding reasons, such contract will be converted into an open term employment contract from the date of the renewal/extension.

THE DISMISSAL RULES FOR OPEN TERM EMPLOYMENT CONTRACTS (indemnities in case of unlawfulness of the dismissal)

NOTE – The exceptional cases above mentioned are, for example, the oral dismissals and the discriminatory dismissals.


The limit of 30% - The overall number of fixed term em- ployment contracts and the fixed term staff leasing con- tracts in force in a company cannot be higher than 30 % of the overall number of open-term employment contracts in force as of 1st January of the reference year. Therefore, potential renewals or extensions shall be count into the overall number in order to verify the compliance with the abovementioned limit of 30% (in case as of 12nd August 2018 a company has exceed the abovementioned limit of 30%, the company can keep in force the fixed term con- tracts and/or the fixed term staff leasing contracts until the natural expiration term without any sanction).

"Settlement offer" - The Decree no. 23/2015 (Jobs Act) has introduced the "settlement offer": i.e. the possibility for the employer to offer to the dismissed employee (within 60 days from the date of the dismissal) a settlement amount equal to 1 month per each year of service, in a range of minimum 2 months up to 18 months. In case the employee accepts the offer, such amount is net (not subject to tax and social security duties, either for the company and the employee) and the employee shall renounce to challenge the dismissal. As example, if a dismissed employee has 8 years of service and his/her monthly salary is equal to € 2,000, the employer may offer the payment of € 2,000 (1 monthly salary) * 8 months (of service = tenure), for the total amount of € 16,000. The employee accepts the amount and renounces to challenge the dismissal. The company pays to the employee the net amount of € 16,000 (amount which is net for the company as well as for the employee). The payment of the abovementioned amount shall be do- ne by cashier's check at the signing of the settlement agreement.

The Decree has confirmed the increase of the range of the monthly instalments to be paid in such hypothesis starting from 3 months (minimum) to 27 months (maximum).

Voucher – Voucher has been reintroduced, with a lot of limitations. This institute can be utilized only in some speci- fic sectors:

  • agriculture,
  • hotelier,
  • local authorities and
  • other accommodation facilities that employ up to 8 workers (we refer, mainly to B & B, holiday homes, etc. while bars and restaurants seem to be excluded).

Furthermore, the only categories of subjects that can be "hired" by voucher are:

  • pensioners,
  • students under 25 years old,
  • unemployed, recipients of inclusion income or other forms of income support.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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