NEW MEASURES ON EMPLOYMENT ADOPTED BY THE LETTA GOVERNMENT AND BY THE EU COUNCIL Update
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1 NEW MEASURES ON EMPLOYMENT ADOPTED BY THE LETTA GOVERNMENT AND BY THE EU COUNCIL avv. Guido Callegari avv. Gaspare Roma dott. Matteo Azzurro Labour and Employment
2 CONTENTS I. NEW MEASURES ON EMPLOYMENT ADOPTED BY THE LETTA GOVERNMENT AND BY THE EUROPEAN COUNCIL 2 DECRETO DEL FARE - Urgent measures to stimulate [Italian] economy 3 (Law Decree no. 69 June 21st, published in Official Gazette Italian Republic and entered into force on June 21st, 2013) II. DECRETO OCCUPAZIONE OR DECRETO LAVORO - First urgent measures to promote youth employment and social harmony, as well as in matter value added tax (VAT) and or urgent financial measures 4 (Law Decree no. 76 June 28th, published in Official Gazette Italian Republic and entered into force on June 28 th, 2013) III. 9 EUROPEAN COUNCIL OF JUNE 27/28TH,
3 NEW MEASURES ON EMPLOYMENT ADOPTED BY THE LETTA GOVERNMENT AND BY THE EUROPEAN COUNCIL The government Enrico Letta has recently approved measures to stimulate Italian economy ( so-called Action Decree - Decreto del Fare ) and to tackle youth unemployment, which has risen to alarming rating about 40% ( so-called Employment Decree - Decreto Occupazione or Decreto Lavoro ). This document briefly sets out main measures both se Law Decrees (LD no. 69/ Decreto del Fare and LD no. 76/ Decreto Occupazione ). In particular, main measures contained in Decreto del Fare on matter employment regard: - certificates mental and physical fitness - simplifications for short term employment contracts - safety at work and work contracted out - pregnancy certificates - attestation due payment social taxes and contributions ( DURC ) while main measures provided by Decreto Occupazione concern: - incentives for employment young people - apprenticeships and traineeships - scholarships for pressional traineeships in Sourn Italy - measures for Youth Guarantee - fixed term employment contracts - jobs on call - project work agreements - dismissals for objective and valid reasons ( giustificato motivo oggettivo ) - incentives to hire unemployed workers - termination self-employment contracts - database - joint and several liability parties to contracts to provide work or services and to procurement contracts - collective bargaining employment agreements at local or company level - immigration - groups independent farmers and agricultural companies Italy is not alone in taking important measures to fight unemployment. On June 27th, 2013 all 27 EU governments kicked f a two-day summit to come up with job creation plans and to take concrete action on issues that matter to millions people. The latter part this document describes 3 main areas intervention agreed by European Council. 2
4 It is important to remember, however, that, according to Italian Constitution, two Law Decrees, while having full force law for 60 days after ir publication, need to be converted into a full law by Parliament no later than August 20th, 2013 as to Decreto del Fare and no later than August 27th, 2013 as to Decreto Occupazione. Orwise, y will retroactively lose all force and effect. I. DECRETO DEL FARE - Urgent measures to stimulate [Italian] economy (Law Decree no. 69 June 21st, published in Official Gazette Italian Republic and entered into force on June 21st, 2013) In summary, main measures Decreto del Fare on matter employment are as follows. 1.1 Certificates mental and physical fitness collectors, ski instructors students nursing schools. LD no. 69/2013 repeals a number provisions Italian law imposing duty on certain categories students and/or workers to submit a fitness certificate as a condition for ir admission to school or to get a job. 1.2 Simplifications for short term employment contracts Concerning workers in general, minors and apprentices will no longer be required to submit a socalled certificate fitness to work ( certificato di idoneità all assunzione ) in order to get a job, and candidates for jobs in Civil Service or National Health Service will no longer be required to submit a certificate physical fitness for employment in public sector ( certificato di idoneità fisica per l assunzione nel pubblico impiego ). Likewise, students secondary schools will no longer be required to submit a socalled certificate robust constitution ( certificato di sana e robusta costituzione fisica ) in order to be enrolled at school. Minor provisions repealed concern clerks Court Auditors, tax and A Ministerial Decree to be jointly issued by Labour Minister and Health Minister should simplify duties employers in relation to health information and surveillance for workers hired with employment contracts for terms not exceeding 50 days in aggregate per calendar year. 1.3 Safety at work and work contracted out A Ministerial Decree to be issued by Labour Minister is to set criteria for identifying activities with a low level risk accidents at work and occupational diseases. For se activities Decree will establish a form attestation to replace more complex document evaluation risk accidents at work and occupational diseases (risk assessment form) which employers must currently prepare in accordance with law on 3
5 safety at work (Legislative Decree no. 81 April 9th, 2008). Where work contracted out is on list activities identified by above Ministerial Decree, party contracting out work will be permitted to replace risk assessment form which must be jointly prepared with contractor by appointing a fully qualified delegate in charge supervision and coordination parties for purposes compliance with safety at work law. 1.5 Attestation regular payment social taxes and contributions ( DURC ) 1.4 Pregnancy certificates The attestation regular payment by contractors under procurement contracts social taxes and contributions ( so-called Documento Unico di Regolarità Contributiva or DURC ) will be made available by INPS ( Italian social security authorities) to government bodies and or public entities online. Previously, burden obtaining and submitting such attestation was placed upon contractors. Hard copies pregnancy certificates will be replaced by communications to be sent online by doctors National Health Service to National Institute Social Security ( INPS ), in accordance with instructions contained in a Decree Labour Minister still to be issued. Irregular payment social taxes and contributions will lead to freezing payments to contractor under procurement contract. In case irregularities, however, social security authorities will be bound to urge contractor to regularise payments within 15 days. II. DECRETO OCCUPAZIONE OR DECRETO LAVORO - First urgent measures to promote youth employment and social harmony, as well as in matter value added tax (VAT) and or urgent financial measures (Law Decree no. 76 June 28th, published in Official Gazette Italian Republic and entered into force on June 28th, 2013) Its main measures in matter employment are as follows. 2.1 Incentives for employment young people Up to and until June 30th, 2015 employers who hire workers aged 18 to 29 under an employment contract unlimited duration will be granted a reduction social taxes and contributions payable for each such worker for an 18month period from date commencement employment, provided however that worker: 4
6 - has not been in employment, and has not been paid a regular salary for a period time no less than 6 months; and/or - has no secondary school qualification; and/or - lives on ir own with one or more dependents. The same reduction will apply to fixed term employment contracts with workers meeting above conditions, which are converted into employment contracts unlimited duration, for a 12-month period from date conversion contract. The reduction will amount to 1/3 gross monthly salary each employee concerned, with a cap at 650 Euros per month per employee. 2.2 Apprenticeship and traineeship With a view to enhancing apprenticeship as main way for young people to enter la-bour market, Permanent Conference for Relations between State, Regions and Autonomous Provinces Trent and Bolzano/Bozen is required to adopt guidelines by September 30th, 2013 aimed at regulating and facilitating hiring apprentices by micro, small and medium-sized companies for period ending on December 31st, For best university students enrolled for academic year 2013/2014 willing to under-take a pressional traineeship no less than 3 months, Universities will pay 50% compensation payable to m by hosting entities, with a cap 200 Euros per month per student/trainee. 2.3 Scholarships for pressional traineeships in Sourn Italy 56 million Euros for each years 2013, 2014 and 2015 were allocated by Government to finance scholarships for pressional traineeships for people aged 18 to 29 not in employment, education or training ( so-called NEET Generation ) resident in sourn regions Italy. 2.4 Measures for Youth Guarantee For implementation EU programme Youth Guarantee, LD no. 76/2013 creates a task force within Labour Ministry. The task force will be co-ordinated by Secretary General or by a Director General Labour Ministry and will be composed President Italian Institute for Development Workers Pressional Education ( ISFOL ), President State-owned company Italia Lavoro S.p.A. whose mission is promotion labour, employment and social policies, General Manager Italian National Institute Social Security ( INPS ), Chiefs General Divisions Labour Ministry, 3 representatives Permanent Conference for Relations between State and Regions, 2 representatives Union Italian Provinces and 1 representative Union Italian Chambers Commerce. Members task force will be entitled to a refund expenses, but no fee. 5
7 2.5 Fixed term employment contracts As general rule, typical contract employment in Italy is for an unlimited term. Fixed term employment contracts are permitted only in specific circumstances (e.g. a peak production or need to replace anor worker temporarily absent from work) justifying a limitation ir duration. Law no. 92 June 28th, 2012 ( so-called Legge Fornero ), however, introduced possibility resorting to fixed term employment contracts even in absence a reason justifying a limited duration for workers hired for first time by an employer, provided that term contract is no longer than 1 year ( same principles apply to hiring temporary workers in framework a so-called employee supply arrangement - in Italian somministrazione di manodopera ). LD no. 76/2013 furr extends this possibility to or cases, to be identified by collective bargaining, even at company or local level. Furrmore, no restrictions apply to hiring under fixed term employment contracts unemployed workers dismissed in framework a mass redundancy process. LD no. 76/2013 reduces also previous stop and go minimum term between end a fixed term employment contract and beginning a new one with same employer to 10 days if term former contract was no longer than 6 months, and to 20 days if it was longer than 6 months. 2.6 Job on call Workers may undertake to work for an employer just upon request latter, as formerly contemplated by Legislative Decree no. 276 September 10th, 2003 ( so-called Legge Biagi ), under a specific type employment contract named intermittent work employment contract. LD no. 76/2013 now limits commitment employee to no more than 400 working days per triennium. 2.7 Project work agreements This type contract falls within domain self-employment and has repeatedly been remoulded by Italian legislator mainly with a view to preventing it being used to circumvent employment law rules. LD no. 76/2013 now specifies that a project work agreement must clearly contain follow-ing indications: - duration agreement; - a description project to be implemented by worker and goal to be achieved by worker at end project; - amount fee payable to worker, criteria for its calculation, timing and ways making relevant payments, conditions for reimbursement out--pocket expenses; - how employer and worker will coordinate ir work; - safety-at-work measures applicable to project worker. 6
8 2.8 Dismissals for objective and valid reasons ( giustificato motivo oggettivo ) For employers having more than 15 employees in a single location or within a single municipality, or more than 60 workers in aggregate wherever located, Law no. 92 June 28th, 2012 ( Legge Fornero ) made effectiveness dismissals for 1 objective valid reasons conditional upon carrying out a newly shaped mediation process in front competent Territorial Labour Directorate ( DTL ). LD no.76/2013 has now removed this condition for such dismissals where based on: - an absence from work for sickness for a period time exceeding maximum grace period as set by applicable collective bargaining employment agreement; 2.9 Incentive to hire unemployed workers Employers giving full-time employment unlimited duration to unemployed workers receiving government unemployment benefit ( so-called ASPI ) will be granted an incentive amounting to one half residual unemployment benefit payable to unemployed workers concerned Termination selfemployment contracts The effectiveness resignations and terminations by mutual consent project work agreements and individual joint ventures 2 is made conditional upon carrying out same process confirmation as that contemplated by Law no. 92 June 28th, 2012 ( Legge Fornero ) for resignations from employment contracts. - termination a procurement contract or in general a contract under which a contractor undertakes to do work for, or provide services to or party and entering into a new contract same kind with a new contractor for same work or services, where new contractor is not bound by law to hire all personnel employed by previous contractor for performance work or services concerned; 2.11 Database - completion construction works and closing down relevant construction site. 2 1 Notionally, dismissals caused by objective circumstances, such as e.g. suppression a job position within a company. LD no. 76/2013 provides for setting up a database to be kept by Italian Labour Ministry containing data all individuals, young people in particular, seeking work on labour market. This is aimed at rationalising activities central and local job centres and better matching employment supply and demand, as well as In Italian associazione in partecipazione, an arrangement contemplated by Civil Code under which an individual makes his/her own contribution - in this case his/her services available to anor individual or entity in relation to a specific business for a consideration consisting in a share prits business concerned. 7
9 activating Youth Guarantee contemplated by EU legislation Joint and several liability parties to contracts to provide work and/or services and to procurement contracts Under Sect. 29 Legislative Decree no. 276 September 10th, 2003 ( Legge Biagi ) both parties to contracts under which a contractor undertakes to provide work and/or services to or party are jointly and severally liable for payment salaries and social taxes and contributions employees used by contractor (and by sub-contractors, if any) for contracted work and/or services. LD no. 76/2013 extends such joint and several liability to payment fees and compensation, as well as social taxes and contributions, self-employed workers used for performance contracted work and/or services. Such liability can be limited by collective bargaining agreements, but not for social taxes and contributions. LD no. 76/2013, however, makes clear that above joint and several liability does not apply to parties to procurement contracts Collective bargaining employment agreements at a local or company level LD no. 76/2013 confirms possibility introduced by Law Decree no. 138 August 13th, 2011 for collective bargaining agreements at company or local level to derogate from a wide range provisions employment law and/or national collective bargaining agreements, provided however that relevant company or local agreements are filed with compe-tent Territorial Labour Directorate ( DTL ) Immigration The hiring a non-eu national residing abroad is made conditional upon negative result a check to be made in advance by employer as to wher re is a worker in Italy available for job Groups independent farmers and agricultural companies LD no. 76/2013 introduces possibility for groups independent farmers and agricultural companies to jointly hire personnel who may work for all and any members group. This also applies to parties to a network agreement 3 provided however that at least 50% m are independent farmers or agricultural companies. In above cases all members group or all parties to network agreement are jointly and severally liable for obligations employer arising from employment contracts concerned (including those in matter social taxes and contributions). 3 In Italian contratto di rete which is an agreement that may be entered into by two or more companies, partnerships or individual entrepreneurs in order to increase ir innovative capability and competitiveness. 8
10 III. EUROPEAN COUNCIL OF JUNE 27/28TH, Youth employment The fight against youth unemployment is an immediate commitment EU, considering un-acceptably high number young Europeans who are unemployed. The EU will mobilise all available means supporting youth employment. The European Council agreed on a comprehensive approach based on following measures: - in strengning Structural Funds, a particular focus will be placed on youth employment. As a first step to this end, unspent Structural Funds will be reprogrammed, where appropriate. The Commission and Member States will exploit all possibilities fered by European Social Fund (ESF), which is one main financial tools at EU level for social purposes. In particular, ESF will finance not only welfare measures, but also creation new jobs for young workers. The Member States are invited to improve ir capacity to administer ESF, building up best practices even with support enhanced technical assistance from Commission; - all necessary steps will be taken for Youth Employment Initiative (YEI) to be fully operational by January Funds will be allocated prevalently in favour EU regions experiencing a youth unemployment rate higher than 25%. The former overall allocation 6 billion Euros for MultiAnnual Financial Framework (MFF) covering years 2014 to 2020 was increased to 8 billion Euros, out which 6 billion Euros were allocated for, and will be made available to beneficiaries in years 2014 and Member States benefiting from YEI are expected to adopt a plan to tackle youth unemployment, including implementation Youth Guarantee before end year In year 2016 Commission will report on implementation Youth Guarantee and YEI; - Member States are expected to make new efforts to promote mobility young job-seekers, including strengning use Your First EURES Job programme. Member States are encouraged to use part ir ESF allocations to support crossborder mobility schemes. The Erasmus + programme fostering cross-border vocational training is expected to be fully operational as from January An agreement between European Parliament and Council on recognition pressional qualifications would be particularly welcome. The proposals Commission for creation a network public employment fices should be rapidly examined. As to Italy, European Council allocated 1.5 billion Euros to be spent in years 2014/2015 to tackle youth unemployment. 9
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