The new “Labour Decree”: main news

Legislative Decree No. 48/2023, commonly known as the “Labour Decree”, entered into force on 5 May 2023, and introduces some important changes to employment regulation.
 
The following is a summary of the Decree's most important new features.
 
Fixed-term employment agreements regulation
The Labour Decree provides that, when fixed-term employment agreements have a duration (including extensions) between 12 and 24 months (which is the maximum duration allowed for Italian fixed-term employment agreements) or are renewed regardless their duration, a term exceeding 12 months can be applied only in the following cases:

• in the cases provided for by collective agreements referred to in article 51 of the Legislative Decree no. 81/2015;
• for replacement needs of other workers.

 
Only for agreements executed between 5 May 2023 and 30 April 2024 and upon the condition that no rules are provided under applicable CBAs can parties agree in writing on other different business needs. Each case should be evaluated carefully in order to minimise the risk of conversion of the employment relationship into one that is permanent.
 
Simplification of information obligations
The new law simplified some of the information obligations introduced in 2022 by the “Transparency Decree”.
 
The Decree provides that some information (e.g. duration of paid leaves and holidays, procedures, form and terms for termination, working hours, etc.) may be communicated to the employee with an indication of the regulatory reference or both national and company collective agreements applied to the relationship. The employer is now required to make applicable collective agreements and company policies available to each employee.
 
Finally, it is also specified that the information given to the employees on the employer's use of automated decision-making or monitoring systems in relation to different aspects of the relationship (e.g. assignment of tasks or duties, surveillance, evaluation, performance and compliance with the contractual obligations of the workers) must be provided only in the presence of systems that are "entirely" automated.
 
Inclusion allowance and hiring incentives
A new income support measure, the Inclusion Allowance (“Assegno per l'inclusione”), will be granted to households composed of at least one disabled, underage or over 60-year-old person or invalid civilian as of 1 January 2024.
 
The following further incentives are provided for employers of the private sector hiring the recipients of this allowance:

• a 100% social security discount up to EUR 8,000 for up to 12 months if the employee is hired with an open-ended employment or apprenticeship contract. Except for disciplinary dismissals if the employer dismisses the employee within 24 months following the hiring date, the employer must pay back all the social security contributions normally due in addition to sanctions;
• a 50% social security discount up to EUR 4,000 for up to 12 months in case the employee is hired on a fixed-term basis, when certain conditions are met.

 
To benefit from the above incentives, the employer must have correctly fulfilled the obligations related to the regular payment of social security contributions and compulsory employment under Law No. 68/1999.
 
Finally, from 1 June 2023 to 31 December 2023, employers may apply for an incentive lasting for 12 months, ranging from 20% to 60% of the monthly gross compensation of an employee for the hiring of young people who:

• have not yet reached the age of 30;
• are neither working nor in education or training (i.e. they fall under NEET – "Not in Education, Employment or Training");
• are registered in the National Operational Programme 'Youth Employment Initiative'.

 
Partial exemption of social security contribution and fringe benefits
With reference to the period from 1 July 2023 to 31 December 2023, the exemption of the employee’s share of social security contributions for disability, old age and survivors has been increased by 4 percentage points without any effect on the 13-month salary instalment.
 
The Decree confirms that for tax year 2023 the increase of the tax exemption threshold for fringe benefits up to EUR 3,000. This measure was envisaged for 2022 but now is provided only for employees with dependent children.
 
Further measures for business crisis and reorganisation
The Decree also introduced new rules in matters of expansion contract and CIGS (i.e. the extraordinary redundancy fund system).
 
Until 31 December 2023, for the expansion contracts of groups of companies regulated by article 41 of the Legislative Decree no. 148/2015 and stipulated by 31 December 2022, the Decree allows for remodelling, with an integrative agreement at the ministerial level, the terminations of employment relationships, which allow access to retirement within 12 months following the original term of the expansion contract itself. This is to allow for the full implementation of the recovery plans of those groups of companies with more than 1,000 employees.
 
Health and safety
New obligations are introduced in matters of health and safety. The new Decree extends the obligation to appoint a company doctor whenever the applicable Risk Assessment Document (“Documento Valutazione Rischi”) requires it and not only if provided by Legislative Decree no. 81/2008.
 
Furthermore, to carry out pre-hire medical checks, new provisions provide that the company doctor can ask employees to share medical files issued by their previous employer.