Ministry issues clarifications in respect of the Labour Decree in Italy

Circular 9/2023, issued by the Ministry of Labour on 9 October, provides important clarifications on the changes introduced by the so-called Labour Decree (Decree-Law no. 48/2023, converted into Law no. 85/2023, in force from 4 July 2023). 

Acausality limits

The circular addresses one of the most debated issues of the Decree: the rule, introduced by the conversion law, which allows (for the "old" fixed-term contracts and temporary staffing contracts) to reset the calculation of the months of acausality. These therefore benefit from a new period of 12 months of acausality (that is, 12 months within which recourse to fixed-term employment contracts is allowed "freely", without the need for justifying reasons). 

The circular clarifies that, in order to apply this rule, reference must be made only to the date when the fixed-term employment contract was entered into: whether before 5 May 2023 or after this date. Specifically, for the purposes of reaching the maximum limit of 12 months of acausality of the contract, only employment contracts entered into on or after 5 May 2023 must be taken into account. Any fixed-term employment contracts between the same parties prior to 5 May 2023 are not counted in the calculation of the 12-month acausality limit.

Consequently, as of 5 May 2023, companies may freely use fixed-term employment contracts for a further (maximum) period of 12 months, regardless of any relations already existing between the same employer and the same employee under contracts entered into before 5 May 2023, without prejudice to the maximum duration of the fixed-term contracts, which remains  24 months, unless otherwise provided for by collective bargaining agreements. 

Transitional period

With reference to the transitional period between 5 May 2023 and 4 July 2023 (the date on which the conversion law came into force), the circular clarifies that if the parties have already renewed or extended a fixed-term employment relationship for six months, they will be able to make recourse to fixed-term contracts freely for a further period not exceeding six months. 

Practical examples 

If a fixed-term employment contract entered into before 5 May 2023 expired on 10 October 2023, the same contract may be freely renewed or extended for a further 12 months, subject to the maximum duration of 24 months.

If a fixed-term employment contract extended or renewed before 5 May 2023 expired on 10 October 2023, the same contract may be freely renewed or extended for a further 12 months, subject to the maximum duration of 24 months and the maximum number of four extensions.

If a fixed-term employment contract of five months' duration is entered into on 10 October 2023, it may be freely renewed or extended for a further period not exceeding seven months. 

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