SINTESI IN INGLESE DEI CONTENUTI DEL DISEGNO DI LEGGE PER LA TRANSIZIONE A UN REGIME DI FLEXSECURITY

Italian Law Proposal 1481, 25th March 2009 – Senator P. Ichino et al.

 1.       Possibility for the industrial relations system to experiment a new labour law for new hires, at plant level or at the level of a group of companies, of local, regional or national dimensions, in order to give way to the transition to a flexsecurity regime

2.       A collective “transition contract” which can be negotiated by one or more firms with one or more unions:

2.1.  Need to establish an agency, whose structure can be that of a bilateral entity, managed with equal representation by firm and employer, or that of an usual private employment agency

2.2.  Agency financed by firm(s)

2.3.  Workers represented by (at least) one union, whose sole requisite is that it is rooted in not less than four Italian regions

2.4.  If the “transition contract” encompasses not only new entrants, but also insiders, it must be negotiated by a union or a coalition of unions showing enough representativeness in firm-level elections

2.5.  The contract can be broken with advance notice of no less than 6 months: in this case, employment relationships that have been stipulated in the new regime keep being disciplinated by the new regime; the old regime will apply only to new entrants

 

3.       A “labor relocation contract”:

3.1.  For workers with at least 1 year of service (provided it’s not a disciplinary firing)

a)     Trial period: 6 months

b)     Unemployment benefits: 90% (year 1), 80% (2), 70% (3), 60% (4) of wage not exceeding 40000 euros per year. Minimum duration = seniority post probation period, Maximum duration = 4 years.

c)      Intensive job finding assistance, with best practice in the industry

d)     Training

e)     The worker has to be available for a schedule equal to previous work schedule

f)      The worker’s job search will be controlled by a tutor or job advisor appointed by the agency

g)     Benefits can be suspended if the worker fails to comply

3.2.  Services sub c), d), e), f) will also be offered to workers who have passed the trial period but have less than 1 year of service

3.3.  Independent evaluation of quality of training and placement

3.4.  Worker can break the relocation contract without notice

3.5.  Agency can break the contract if the worker fails to comply (rejects a job or a training offer without adequate justification)

 

4.       Financing:

4.1.  Guidance, coaching, training and placement services are funded by contributions by regions (public bodies which in Italy have a full legislative and administrative competence on these matters), firms and, possibly, European Social Fund money

4.2. Complementary unemployment benefits (which are added to the general unemployment insurance, in order to reach the 3.1.b standard) are entirely funded by firms

4.3.  Financial equilibrium is guaranteed

4.4.  Social security contributions must be paid nevertheless

4.5.  In case of insolvency, agency’s debts must be paid by the firm which has dismissed the worker

4.6.  The State will contribute to the agency with 0.5% of gross wages for small firms which are today exempt from the regulations of article 18 of Statuto dei lavoratori (the statute of 1970 which disciplines today dismissals in firms with more than 15 employees, foreseeing the reinstatement and a high indemnification for the worker whose dismissal is qualified by the court as unfair or unlawful)

 

5.       Duration of contracts:

5.1.  Employee in a position of economic dependence : a worker who receives at least two thirds of his/her labor income from the same firm, except in the case
   ‑ of free lances earning more than 60000 euros per year
   ‑ of independent workers exerting regulated professions not compatible with a subordinate position: e.g. barristers

5.2.  The labor contract will always be of indefinite duration except for seasonal jobs, replacement of other worker temporarily out of work, show business, commercial events, research or teaching

 

6.       Types of dismissal:

6.1.  Always in writing

6.2.  Trial period no longer than 6 months

6.3.  After the trial period, the contract can be broken due to:

a)      Important fault by worker

b)      Economic, technical or organizational reasons

6.4.  Disciplinary dismissal: the existing Workers’ statute is applied (judicial control, art. 18 of Statuto dei lavoratori)

6.5.  Discriminatory dismissal: the existing Workers’ statute is applied (judicial control, art. 18 of Statuto dei lavoratori)

6.6.  Non-profit organizations and productive units with less than 16 employees, belonging to firms with less than 61 employees, if they lose a case for unfair disciplinary dismissal, the reinstantement will not be ruled

 

7.       Dismissal for economic, technical or organizational reasons

7.1.  Notice period of one month for each year of job seniority, with a minimum of 3 months and a maximum of 12 months

7.2.  Severance pay of 1 month of wages (in the latest year) per year of service, net from notice period pay (i.e.: within the limit of the first 12 months, dismissed workers can choose to stay at work, being paid the normal monthly salary, or to stop working enjoying the severance pay)

7.3.  Notice period pay is subject to social security taxes, severance pay exceeding notice period pay is not

7.4.  Notice period and severance pay are halved in the case of
   ‑ non-profit organizations and productive units with less than 16 employees, belonging to firms with less than 61 employees
   ‑ worker having reached the retirement requisites

7.5.  The economic, technical or organizational reasons are not subject to judicial review (i.e.: apart from any discrimination complaint, their sole filter is constituted by the firing cost)

7.6.  Severance pay is increased by 0.5 months of wages for each year of seniority above 10 years. For seniority above 20 years the dismissal is considered discriminatory on the ground of age, except for proof of the economic, technical or organizational reasons in court

7.7.  Firms with more than 15 employees which dismiss more than 4 workers in 120 days are subject to the procedural requirements for collective dismissals considered in EU law

 

8.       Pensions

8.1.  Pension contributions amount to 30% of gross wages for all the workers in a position of economic dependence, as defined in subsection 5.1.

8.2.  Except for other more favorable regimes for apprenticeship

 

9.       Financial coverage

9.1.  Costs derived from Article 4.5 will be covered by tax revenues rising from higher employment derived from this law