The Ministry of Labour, with circular 17/2018 of 31 October, signed by the Director General of labor relations and industrial relations Romolo de Camillis, provided the first expected clarifications on the amendments to the Jobs Act on the subject of the discipline of the fixed-term contract and the fixed-term administration introduced by the controversial articles 1 and 2 of the decree-law of 12 July 2018 n. 87, bearing "Urgent provisions for the dignity of workers and businesses", converted, with amendments, by law 9 August 2018, n. 96, the so-called Dignity Decree.
The desirable objective of the circular is to favor the uniform application of the significant innovations introduced by the new regulation, also in consideration of the requests for clarification received by the Ministry from various economic and social organisations.
Specifically:
FIXED-TERM CONTRACT
The new regulations primarily concern the reduction from 36 to 24 months of the maximum duration of fixed-term contracts, with reference to the relationships stipulated between the same employer and the same employee, also as a result of a succession of contracts or periods of fixed-term temporary assignments, concluded for the performance of duties of the same level and legal category, regardless of the periods of interruption.
More precisely, the parties can freely stipulate a fixed-term contract not exceeding 12 months, while the longer duration is recognized exclusively in the presence of specific reasons that justify a fixed-term employment, limited to three categories: temporary and objective needs, unrelated to ordinary activity / need to replace other workers / needs connected to temporary, significant and non-programmable increases in ordinary activity.
To establish whether there is such an obligation, the total duration of the fixed-term contracts between the same employer and the same employee must be taken into account, having regard to both the duration of those already concluded and the duration of the which it is intended to extend if necessary.
The circular provides an example: if you intend to extend a contract with an initial duration of 6 months for a further 10 months, even if the extension occurs when the employment relationship has not yet exceeded 12 months, it will still be necessary to indicate the above requirements in how much overall the fixed-term employment relationship will have a duration of more than 12 months.
The so-called "causal" is, in fact, always necessary when the 12-month period is exceeded, even if the overrun occurs following a contract originally of less than 12 months.
Furthermore, it is useful to remember that even in cases in which the employer is not required to indicate the reasons for entering into a fixed-term contract, the same must in any case be indicated in order to be able to take advantage of the benefits provided for by other legal provisions, such as example for the tax relief granted to employers who take on fixed-term contracts to replace workers on leave.
EXTENSIONS AND RENEWAL
The regime of extensions and renewals of the fixed-term contract has also been modified by the new regulations with regard to the maximum duration and conditions, in line with the aims pursued by the reform (the so-called fight against precariousness).
It will therefore be possible to freely extend a fixed-term contract within 12 months, while the indication of the reason for the renewal is always required.
Moreover, unlike what is maintained by a part of the labor law doctrine, the circular shows that the extension of the fixed-term contract presupposes that the reasons that initially justified the hiring remain unchanged; therefore it would not be possible to carry out the extension by modifying the motivation, as this would give rise to a new contract, falling within the scope of renewal.
It also falls under the hypothesis of renewal if a new fixed-term contract runs after the expiry of the previous contract.
A further novelty of the new regulation is the reduction of the maximum number of extensions, which cannot exceed 4, within the limits of the maximum duration of the fixed-term contract and regardless of the number of contracts and with the exclusion of contracts entered into for the performance of specific seasonal activities.
REFERENCE TO COLLECTIVE BARGAINING
The Dignity Decree did not modify the Jobs Act in the part in which it also gives collective bargaining the power to derogate from the maximum duration of fixed-term contracts for the future.
Therefore, the national, territorial or corporate collective agreements stipulated by the comparatively most representative trade union associations at national level will be able to continue to provide for a different duration, even longer, with respect to the new maximum limit of 24 months.
In particular, the provisions contained in the collective agreements stipulated before 14 July 2018, which, in implementation of the legal postponement, have provided for a maximum duration of the succession of the fixed-term agreements equal to or greater than 36 months, remain valid until the natural expiry of the collective agreement.
However, the faculty to intervene on the new regime of conditions has not been attributed to collective bargaining.
WRITTEN FORM OF THE TERM
Through the elimination of the possibility that the term results also "indirectly" from a written deed, it is excluded that the term of the contract can be deduced from elements external to the contract itself.
However, it remains understood that, in some situations, the termination of the employment relationship can continue to be inferred indirectly according to the specific motivation that gave rise to the hiring, such as in the case of replacement of the worker on maternity leave, of which it is not possible to know in advance the exact date of return, always in compliance with the maximum term of 24 months.
ADDITIONAL CONTRIBUTION PAID BY THE EMPLOYER
The 0,50 percent increase in the additional contribution of 1,40 percent of the taxable salary (due for non-permanent employment contracts) is applied incrementally for each contract renewal.
However, the 0,50 per cent increase does not apply in the event of an extension of the contract, as it is envisaged that the additional contribution is increased only upon renewal.
EMPLOYMENT ADMINISTRATION
The provisions envisaged for fixed-term contracts have also been extended to fixed-term employment relationships stipulated between the employment agency and the worker.
As a result of this extension, compliance with the maximum limit of 24 months of the individual employment relationship (or in the case of succession of fixed-term contracts) would have to be assessed with reference not only to the employment relationship between the worker and the employment agency , but also to relations with the individual user, having to consider, for the 24-month limit, both the periods carried out with a fixed-term contract and those of administration for the performance of duties of the same level and legal category.
Likewise, the calculation of the 24 months of work must take into account all the fixed-term contracts between the parties, including those prior to the date of entry into force of the reform.
The extension of the provisions envisaged for the fixed-term contract also to temporary agency work relationships has left the recognized possibility of collective bargaining, applied by the employment agency, of regulating the regime of extensions and their duration unchanged.
As with the fixed-term contract, in the event of a temporary contract for a period exceeding 12 months at the same user or its renewal, the fixed-term contract must indicate a reason referring to the user's needs. On the other hand, for this purpose, the periods spent with different users cannot be combined, without prejudice to the maximum limit of the total duration of 24 months of fixed-term contracts, unless a different threshold is set by the collective bargaining agreement.
The obligation to specify the reasons for the fixed-term contract arises not only when the periods refer to the same user for a duration of more than 12 months, but also when the same user has already established a previous fixed-term contract with the same worker for the performance of tasks of the same level and category.
In this regard, the ministerial circular provides the following examples:
- In the event of a previous fixed-term employment relationship lasting less than 12 months, any subsequent period of mission to the same person always requires the indication of the reasons as this case is similar to a renewal;
- In the event of a previous fixed-term employment relationship lasting 12 months, it is possible to carry out a temporary temporary assignment between the same subjects for the remaining period, specifying the reason;
- In the case of a fixed-term assignment period of up to 12 months, it is possible for the user to hire the same worker directly with a fixed-term contract for a maximum duration of 12 months, indicating the relative motivation.
QUANTITATIVE LIMIT OF ANNEXED WORKERS
The new regulation of fixed-term work has, for the first time, introduced a limit to the use of fixed-term workers. In fact, the need to respect a proportion between permanent and temporary workers present in the company is envisaged, even if it can be derogated from the collective bargaining applied by the user.
Therefore, without prejudice to the envisaged maximum percentage of 20 per cent of fixed-term contracts, there may be present in the user company workers with fixed-term contracts and temporary agency workers within the overall maximum percentage of 30 per cent of the number of permanent workers.
Also in this case, the faculty of collective bargaining to identify different percentages remains unchanged, to take into account the needs of the various productive sectors. In this sense, it can be assumed that the current national, territorial or company collective agreements maintain their validity until their natural expiry, both with reference to the quantitative limits possibly set for the fixed-term contract and to those fixed for the use of fixed-term contracts .
The percentage limit of 30 per cent applies to each new fixed-term or temporary contract hire starting from 12 August 2018. Therefore, if there is a percentage of fixed-term and temporary contract workers at the user company with contracts stipulated before of last August 12, higher than the legal limit, the relationships in progress will be able to continue until their initial expiry, but new hires or extensions of the relationships in progress will not be possible until the user returns within the new limits.
For last, having completed the transitional period, which provided for the application of the new rules on renewals and extensions only after 31 October 2018, all the provisions introduced with the reform now find full effect, starting from 1 November, including the obligation to indicate the conditions in the event of renewals (always) and extensions (after 12 months).
