Labour Decree

Decree Law No. 48 of 4 May 2023 (the so-called “Labour Decree”), containing “Urgent measures for social inclusion and access to the world of work”, published in the Official Gazette No. 103 of 4 May 2023 and entered into force on 5 May 2023, introduced the following main innovations:

a) FIXED-TERM CONTRACTS

Article 24 of the Labour Decree has changed the regulation of fixed-term contracts, providing for the elimination of the grounds justifying a fixed-term relationship, the renewal and extension of a fixed-term contract and, hence, for the replacement of Article 19, paragraph 1, points a), b) and b-bis) of Legislative Decree 81/2015 with the following provision:

“The term fixed for an employment contract may not exceed 12 months. A longer term, in any case not exceeding 24 months, may be applied to the employment contract only if at least one of the following conditions is met:

a) in the cases provided for by collective bargaining agreements referred to in Article 51 [i.e. agreements at each level entered into by the organisations that are comparatively more representative at national level, as well as company collective agreements entered into by their company or unitary union representative bodies];

b) in the absence of the provisions referred to in point a), in the collective agreements applied at company level, and in any case by 30 April 2024, for technical, organisational or production requirements indicated by the parties;

c) b-bis)  as a replacement for other workers”.

Basically, without prejudice to the possibility for the parties to enter into the first fixed-term contract for a term of up to 12 months (which remains, therefore, acausal), in order to enter into a new contract or to extend the first one beyond 12 months, companies must make reference to the “cases” provided for by the collective agreements referred to in Article 51 of Legislative Decree 81/2015.

As a second-line option, if collective bargaining fails to define the grounds, the fixed-term contract may continue after the 12-month period by virtue of technical, organisational or production requirements indicated by the parties. This provision shall apply only until 30 April 2024.

Finally, the ground relating to the replacement of other workers is confirmed.

Such provision does not apply to contracts entered into by public administrations as well as to fixed-term employment contracts entered into by private Universities, including foreign ones, public research institutes, public companies promoting research and innovation or private research entities, which shall remain subject to the provisions applicable to the date of entry into force of Law No. 96 of 9 August 2018 (Urgent provisions for the dignity of workers and enterprises).

b) SIMPLIFICATION OF INFORMATION AND DISCLOSURE REQUIREMENTS IN RESPECT OF THE EMPLOYMENT RELATIONSHIP

Article 26 of the Labour Decree introduced certain changes to Legislative Decree 152/1997, as amended by Legislative Decree 104/2022 (the so-called Transparency Decree).

In particular, it is provided that certain information - namely those indicated under (h) duration of the probationary period, (i) right to receive training provided by the employer, (l) duration of leaves, (m) procedure, form and terms of notice in the event of withdrawal, (n) the initial remuneration amount or in any case the compensation and its components, with an indication of the period and methods of payment o) the scheduling of normal working hours and any conditions relating to overtime work and its remuneration, p) the employment relationship with unforeseeable organisational arrangements, and r) the bodies and institutions receiving the social security and insurance contributions due from the employer - may be communicated to the employee with an indication of the regulatory reference or collective agreement, including company agreements, which govern the relevant matters.

Furthermore, the employer is required to deliver or make available to staff, also by means of publication on the website, the national, local and corporate collective agreements, as well as any corporate regulations applicable to the employment relationship.

Finally, with regard to fully automated decision-making or supervisory systems intended to provide information relevant to the recruitment or assignment of a job, the management or termination of the employment relationship, the assignment of tasks or duties, as well as information affecting the supervision, assessment, performance and fulfilment of the contractual obligations of employees, the employer or the public and private principal are required to inform the employee of their use.

c) FRINGE BENEFIT EXEMPTION

Pursuant to Article 40 of the Labour Decree, limited to tax year 2023, The threshold of non-taxability of fringe benefits (as an exception to Article 51, paragraph 3, TUIR – Income Tax Consolidated Law-) is increased to 3,000 Euros, but only for employees with dependent children. Expenses included in the aforementioned exemption include household utilities (electricity, water and gas).

d) YOUTH EMPLOYMENT INCENTIVES

Pursuant to Article 27 of the Labour Decree, private employers who hire from 1 June to 31 December 2023 (i) under-30 youths, (ii) who are not in training programs, and (iii) who are registered in the National Operational Program “Youth Employment Initiative,” are granted an incentive equal to 60 percent of the gross monthly salary for a period of 12 months.

In case of cumulation with other incentives, exemptions or reductions in funding rates, the incentive is recognized to the extent of 20 percent of the gross monthly salary taxable for social security purposes for each NEET worker hired.

The incentive is paid to the employer by means of adjustment in the monthly contribution return.

The application for the incentive is submitted through an online procedure to INPS, which within 5 days provides a specific communication regarding the actual existence of resources for access to the incentive.

The applicant is then given a peremptory deadline of 7 days to arrange for the conclusion of the employment contract in question, which is followed by a peremptory deadline of the next 7 days, in which the applicant has the burden of notifying INPS that the contract has been concluded.

If the aforementioned deadlines are not met, the applicant loses the amounts recognized by the incentive.

Said incentive applies to hirings under open-ended contracts, including those for staff leasing purposes, and to the professional or trade apprenticeship contract, while it does not apply to domestic work relationships and is, moreover, cumulative with the incentive provided for the contribution exemption for hiring young people under 36 years old.

e) INCENTIVES FOR THE WORK OF PEOPLE WITH DISABILITIES

Pursuant to Article 28 of the Labour Decree, a fund is established for the purpose of granting a subsidy to third sector entities, voluntary organizations, social promotion associations, and non-profit organizations for each person with disabilities and under 35 years of age hired under a permanent employment contract between 1 August 2022 and 31 December 2023, for the performance of activities in accordance with the by-laws.

f) PARTIAL EXEMPTION OF SOCIAL SECURITY CONTRIBUTIONS PAYABLE BY EMPLOYEES

Pursuant to Article 39 of the Labour Decree, for pay periods from 1 July to 31 December 2023, the partial exemption on the employee’s share of social security contributions for disability, old age and survivors is increased by 4 percentage points, with no further effect on the accrual of 13^th month’s pay.

g) AMENDMENTS TO LEGISLATIVE DECREE NO. 81/2008

Legislative Decree No. 81 of 9 April 2008  – Safety Consolidation Act – is amended as follows:

– the employer shall appoint the competent physician to carry out health surveillance in the cases provided for in said Legislative Decree and when required by the risk assessment referred to in Article 28;

– the competent physician shall be obliged, during pre-employment medical examinations, to request from the worker the health records issued by the previous employer in order to assess suitability and, in case of impediment for serious and justified reasons, to notify the employer of the name of his/her substitute who meets the requirements of Article 38 for the performance of statutory obligations during the relevant specified time interval;

– anyone who rents or grants for use work equipment shall acquire and retain, throughout the duration of the rental or concession, a self-certifying statement from the person who rents, or in concession for use, or from the employer, certifying that specific training and instruction has been provided;

– the employer who makes use of equipment requiring special knowledge provides appropriate education and training aimed at ensuring that the equipment is used in a suitable and safe manner;

– the employer and the manager shall be punished with imprisonment from three to six months or a fine from €3,071.27 to €7,862.44 for breach of the employer’s obligations under this decree and the employer’s training obligations for the use of equipment requiring specific knowledge.

h) PENALTIES FOR FAILURE TO PAY SOCIAL SECURITY DEDUCTIONS

Pursuant to Article 23 of the Labour Decree, in the case of failure to pay social security and welfare deductions applied by the employer on the wages of employees, if the amount not paid is not more than 10,000 euros annually, a milder administrative fine, ranging from one and a half to four times the amount not paid, shall apply.

It is also specified that for breaches referring to the periods of non-payment from 1 January 2023, the details of the breach must be notified by 31 December of the second year following the year of the breach.

i) EXTENSION OF THE EXPANSION CONTRACT

Pursuant to Article 25 of the Labour Decree, up to 31 December 2023, for group expansion contracts entered into by 31 December 2022 and not yet expired, it is possible to reschedule terminations of employment with access to the early retirement mechanism  within a time frame of 12 months following the original expiry date of the expansion contract. However, the overall spending commitment and the maximum number of workers eligible for the early retirement mechanism provided for by the original expansion contract remain.

j) EXTRAORDINARY REDUNDANCY PAY FOR EXCEPTIONAL CASES OF BUSINESS CRISIS AND REORGANISATION

Pursuant to Article 30 of the Labour Decree, it is provided that for companies that have faced situations of enduring business crisis and reorganization and have not been able to fully implement, during 2022, the reorganization and restructuring plans originally envisaged due to prolonged unavailability of business premises, for reasons not attributable to the employer, at the request of the company, even if it is in a state of liquidation, exceptionally and by way of derogation from Articles 4 and 22 of Legislative Decree No. 148/2015, the Ministry of Labour and Social Policies may authorize a further period, in continuity of already authorized safeguards, of extraordinary redundancy payments until 31 December 2023, in order to safeguard the employment level and the wealth of skills acquired by employees.

Such an extraordinary protection measure requires no procedures for consultation, joint examination and agreement between the parties, nor compliance with the deadlines for submitting applications under Articles 24 and 25 of Legislative Decree No. 148/2015.

k) MARITIME LABOUR PROVISIONS

Pursuant to Article 36 of the Labour Decree, limited to ro-ro and ro-ro pax ferries, registered in the international register, engaged in commercial traffic between ports belonging to the national, mainland and island territory, including following or prior to a voyage from or to another state, it is possible to derogate, for a period not exceeding three months, from the restrictions set out in Article 1, paragraph 5 and Article 2, paragraph 1-ter of Decree-Law No. 457 of 30 December 1997, converted, with amendments, by Law No. 30 of 27 February 1998 by means of national collective agreements entered into by the comparatively more representative employers’ and employees’ trade unions at the national level.

l) OCCASIONAL SERVICES IN THE TOURIST AND THERMAL SECTOR

Pursuant to Article 37 of Labour Decree, for the occasional services referred to in Article 54 bis Decree Law No. 50/2017, converted into Law No. 96/2017, the threshold for use is increased from Euro 10,000 to Euro 15,000 for users operating in the sectors of congresses, fairs, events, spas, and amusement parks, except, however, for users who have up to twenty-five permanent employees on their payroll.

m) REPEAL OF SOLIDARITY INCOME

Pursuant to Article 13 of the Labour Decree, the beneficiaries of the solidarity income and pension (reddito e pensione di cittadinanza) will keep benefiting from the related economic benefit until its natural expiry date and in any case no later than 31 December 2023. This is also without prejudice to the enjoyment of the incentives provided to companies and workers for employment relationships established by 31 December 2023.

As of 1 January 2024, the solidarity income will be repealed and, pending the entry into force of the poverty support and inclusion measures provided for by said decree, it will be granted up to a maximum of seven monthly payments and in any case no later than 31 December 2023. Such limit shall not apply to income recipients who, prior to the expiration of the seven months, have been taken in charge by social services because they cannot be activated for work and whose taking in charge has been communicated to INPS by 30 June 2023.

n) INCLUSION CHEQUE

As of 1 January 2024, the “inclusion cheque” is introduced, which consists of an income supplement disbursement in favor of family units that include a person with disabilities, a minor or a person over 60 years of age and that meet certain requirements, relating to the applicant’s citizenship or residence permit, length of residence in Italy and economic conditions.

The economic benefit of the inclusion cheque is composed of a family income supplement up to the threshold of €6,000.00 per year, multiplied by the corresponding parameter of the equivalence scale, or €7,560.00 if the household is composed of persons all aged 67 or older or persons aged 67 or older and other family members with severe disabilities or non-self-sufficient.

The benefit is disbursed monthly on a continuous basis for a period not exceeding 18 months, and may be renewed, subject to a one-month suspension, for a further 12 months.

o) SUPPORT FOR TRAINING AND WORK

Pursuant to Article 12 of the Labour Decree, as of 1 September 2023, the Training and Work Support is established as a measure to activate to work people at risk of social and labour exclusion, through participation in training, qualification and retraining projects, orientation and accompaniment to work and through the performance of community service.

This tool can be accessed by members of households aged between 18 and 59 in absolute poverty, with an ISEE value not exceeding € 6,000.00 who are not eligible for the inclusion cheque. Members of households receiving the inclusion cheque who are not calculated in the equivalence scale and who are not subject to the obligation of adherence and active participation in training and work activities will also be eligible. Such an instrument is incompatible with the solidarity income and pension, as well as with other income support tools.

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For any further information please contact Chiara Zecchetto.