Governo, Towards a flexible and fair labour market in Italy

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di redazione

Roma,

28 Giugno 2012

The Italian Parliament on Wednesday approved a reform of the labour market that lays the foundation for increased productivity, economic growth and employment.The reform creates a more flexible labour market overall that is less segmented thanks notably to the introduction of an unemployment insurance system, which provides supports also to those most concerned by the increased flexibility. It allows firms to cope with temporary adverse cyclical developments cutting hours worked instead of shedding labor, thus preserving valuable human capital. The reform is complemented by active labour market policies to help the young into their first job and assist those temporarily unemployed find another job rapidly.The implementation and impact of the reform will be carefully and regularly monitored, including with a view to take additional measures if and when necessary. More flexibility, less segmentation.The reform safeguards, and increases, the high flexibility in the Italian labour market, achieved since the early 90s, whilst removing the scope for improper uses. The use of temporary contracts is made easier by reducing red tape, enabling companies to cope better with cyclical developments. A person employed and trained for an adequate length of time is, however, expected to be offered an open-ended contract.Open-ended contracts are generally made more attractive for employers. First, by widening the scope for hiring on apprenticeship contracts, giving more opportunities to screen and train young workers. In a country like Italy, which is the European Union’s second manufacturing nation after Germany, such contracts must become the main port of entry into the labour market. Second, the standard open-end contract becomes more flexible in that it will be easier for employers to adjust their workforce in response to their specific needs. The reform introduces a fast, compulsory, out-of-court settlement procedure at local level to handle disputed dismissals for economic or other objective reasons. If conciliation fails, the worker can obviously take the case to a judge, as in France, Germany or other countries. Only when the economic or other objective reasons for dismissal were found ‘manifestly inexistent’, will a judge be able to decide for reinstatement plus a maximum 12 month wages compensation, which is expected to happen only in extreme cases. Before there was no limit to the financial compensation. In all other cases where a judge ascertains that the economic dismissal was simply not justified, the compensation will be capped at 24 month wages. Again there was no limit before.