DLP Insights

The new draft of the stability law raises the ceiling for relief from social security contributions to EUR 8,060 (from EUR 6,200) for new hires with permanent contracts and confirms that starting 1 January 2015, subsidised contracts will cease for workers who have been unemployed for more than two years (as provided for in Law No. 407/1990).

The Government aims to eliminate reinstatement for individual economic redundancies, which are no longer in high numbers (18%, according to labour experts), whereas nothing has yet been planned or announced for collective economic redundancies under Law 223/1991, which have been the most frequent types in the recent years of the crisis (estimated to be 60% of the total).

In its session on Wednesday 8 October the Senate approved the government amendment, entirely replacing the delegating bill no. on labour (so-called “Jobs Act”), the approval of which the Executive had called a confidence vote. The text of the proposal now passes to the Chamber for a second debate.

With Circular No. 23/2014, the Ministry of Labour has enunciated the process for the granting of relief from social security contributions that, starting 21 March 2014, accompany solidarity contracts supported by the Extraordinary Redundancy Benefit Fund (CIGS).

Tommaso Nannicini, an economist at the Bocconi University in Milan and one of the closest advisors to Prime Minister Matteo Renzi, confirmed that the Government’s objectives in reforming art. 18 of Law 300/1970 are to specify the “extreme cases” of illegal disciplinary dismissals where job reinstatement will be permissible, whereas real protection will be completely eliminated for economic redundancies.