Legislative Decree no. 23 of 4 March 2015, containing provisions on the open-ended employment contract with increasing protection (“tutele crescenti”), implementing Law no. 183 of 2014 (the so-called Jobs Act), was published in the Official Gazette on 6 March and therefore officially entered into force on 7 March 2015.
The new contract with increasing protection applies to workers hired on an open-ended contract after the entry into force of the decree (7 March 2015), for whom it lays down a new regime for individual and collective dismissals (for workers hired before the entry into force of the decree, the previous rules remain valid).
For discriminatory and void dismissals communicated orally reinstatement in the job remains, as provided for all workers.
For disciplinary dismissals reinstatement remains only where “the non-existence of the material fact alleged” is established.
In the other cases in which it is established that the requirements for dismissal for just cause or justified reason are not met, that is, the so-called “unjustified dismissals”, a certain compensatory remedy is introduced, commensurate with length of service and therefore removed from the discretion of the judge.
The rule applicable to new dismissals is compensation of two months’ pay for each year of service, with a minimum of 4 and a maximum of 24 months.
To avoid going to court, it will be possible to use the new incentivised optional conciliation . In this case the employer offers a sum exempt from tax and social security contributions equal to one month’s pay for each year of service, not less than two and up to a maximum of eighteen months. By accepting, the worker waives the claim.
For collective dismissals the decree provides that, in the event of breach of the procedures (Article 4(12), Law 223/1991) or of the selection criteria (Article 5(1)), the monetary compensation regime that applies to individual dismissals always applies (from a minimum of 4 to a maximum of 24 months’ pay). In the case of a collective dismissal communicated without observing the written form, the sanction remains reinstatement, as provided for individual dismissals.
For small businesses reinstatement remains only for cases of void and discriminatory dismissals and dismissals communicated orally. In other cases of unjustified dismissals, an indemnity is provided that increases by one month’s pay per year of service, with a minimum of 2 and a maximum of 6 months.
The new rules also apply to trade unions and political parties
In summary: to whom does the new open-ended contract with increasing protection apply?
The new rules will apply to:
- all workers hired on open-ended contracts entered into from 1 March 2015;
- all apprenticeship stabilisations, that is, conversions of fixed-term contracts into open-ended ones, made from 1 March 2015;
- where one or more open-ended hirings cause the company to exceed the threshold of 15 employees, the new rules will apply to everyone, including long-standing employees;
- as specified in the text of the law, the new rules must also be applied to employers who are not entrepreneurs and who carry out, on a non-profit basis, activities of a political, trade union, cultural, educational, or religious or worship nature.
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