Fixed-term contracts during the emergency: INL’s clarifications
The severe repercussions for the economy and employment relationships caused by the Covid-19 epidemic emergency have made it necessary to introduce specific provisions on fixed-term contracts. These measures are mainly exceptions to the regulatory provisions under Decree-Law 87/2018 ( Dignity Decree) to encourage open-ended contracts, it has profoundly redefined fixed-term contracts by introducing specific reasons and reducing their maximum duration from 36 to 24 months.
Regulatory references and practice
The law converting Decree-Law 18/2020 (Cure Italy Decree), had introduced two important exceptions.
The possibility of entering fixed-term contracts as an exception to the prohibition on fixed-term contracts or temporary work contracts was introduced in production units with simultaneous recourse to social shock absorbers (art. 20, par. 1, letter C) and Art. 32, par. 1, letter c), Legislative Decree. no. 81/2015).
At the same time, the possibility to stipulate fixed-term contracts as an exception to the obligation to allow a suspension period to elapse between a fixed-term contract and its renewal with the same employer (stop&go, art. 21, par. 2 of Legislative Decree 81/2015) was introduced.
To further relax the emergency regulations on fixed-term contracts due to the essential need to safeguard employment relationships, the “Relaunch Decree” introduced an exemption from the obligation to provide reasons for renewal or extension of fixed-term contracts in progress as of 23 February 2020, by 30 August 2020.
The August Decree subsequently reformulated this exception, providing for the possibility to extend or renew fixed-term contracts without giving a reason for up to 12 months, only once and in compliance with an overall maximum of 24 months.
Contrary to the exception introduced by the Relaunch Decree, the renewed fixed-term contract did not need to be in place on 23 February, increasing the possibility to extend or renew contracts by 31 December 2020, for contracts expiring after that date.
The Support Decree extended the access window for extensions and renewals without reason until 31 March and, later, until 31 December 2021.
In the evolutionary sequence of the legislation providing the exception to the obligation to give reasons, the clarification contained in Art. 19bis Cure Italy Decree) clarified that fixed-term contracts could be extended or renewed even where social safety nets were in place.
The National Labour Inspectorate (INL), with its note no. 762 of 12 May 2021, specified that the exception concerns the emergency wage subsidies provided by the Covid-19 legislation, for “workers on the date of entry into force” of the Support Decree (see Art. 8 OF DECREE LAW 41/2021
According to current law, fixed-term contracts may be extended or renewed until 31 December 2021, without reason, only once and for up to 12 months provided that the overall duration did not exceed 24 months.
At the same time, there is no prohibition on stipulating fixed-term contracts in production units where there is the simultaneous use of the social shock absorbers provided for by the Covid-19 legislation (Art. 20, par. 1, letter C), Italian Legislative Decree 81/2015) and, finally, there is no stop&go obligation for renewals (Art. 21, par. 2 of Legislative Decree 81/2015).
The Labour Inspectorate note
Following a request for guidelines by the Genoa Local Labour Inspectorate (ITL), the INL, with note no. 804 of 19 May 2021, reconstructed the framework of the rules for the succession of fixed-term contracts.
INL pointed out that art. 19, paragraph 2 of Italian Legislative Decree no. 81/2015, limits the maximum succession of fixed-term contracts between the same parties to a total duration of 24 months, or a different limit provided by collective bargaining assuming that the contracts are for tasks of the same level.
Once this threshold has been reached, the parties may sign a further “assisted” exception at the ITL for a maximum of 12 months.
If the contracts signed concern classifications of legal level and category that do not coincide, different counters would be established for calculating the maximum of 12 months. Even if the maximum 24-month threshold was reached between contracts, there will be no need to proceed with the assisted exception at the ITL.
The INL pointed out that when there is a significant succession of contracts formally linked to different classifications, the ITL will check them by focusing on the classification’s effectiveness for the evolution of the tasks and related classification.