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Italian reforms, the consequences of the Jobs Act

The new Italian Jobs Act, one of the key actions within the Italian post-crisis strategy, brings to completion a process of decimation of workers’ rights and protections which began in the 1990s. A substantial downsize of workers’ protections

The law 183 of 2014, evocatively named the `Jobs Act’, has been one of the key actions within the Italian post-crisis strategy. A strategy based, as in the other Southern European countries, on supply side policies as the main road to recover competitiveness, growth and employment. Bringing to completion a reform process begun in the 1990s, the Jobs Act has determined a substantial downsize of workers’ protections.

The main changes are the following:

i) a new contract type – designed to become the prevalent one in the Italian labour market – has been introduced for new hires, removing any form of obligation for workers’ reinstatement in case of firms invalidly firing them,

ii) legal constraints for firms intending to monitor workers through electronic devices have been substantially weakened

iii) the use temporary contracts is now easier due to the elimination of previous restrictions on their adoption – before the Jobs Act implementation, firms were allowed to hire using a maximum of 20% temporary over the total amount of contracts

iv) the limit of earnings that can be received in vouchers – hourly tickets, used to compensate workers up to 7.5 euros per hour – has been revised upward. This new discipline strikes with the original aim of vouchers. In fact, the latter were originally designed for accessory and occasional job relationships only, while after the Jobs Act they are increasingly used to remunerate dependent work in a strongly precarious way.

However, the major novelty regards the introduction of the new ‘open-ended’ contract. The new contract allows, for the first time, extremely cheap (for firms) layoffs depriving workers of the reinstatement right which used to protect them during the last 45 years. This element constitutes a substantial reshape of the power balance within the capital-labor bargaining process. In addition, just before the introduction of the new contract, a substantial monetary incentive – lasting three years and taking the form of a reduction in firms’ social contributions burden per employee – has been provided to firms hiring using the new contract form or transforming other contracts into the new one.

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