COVID-19 Italian Decree issued with employment related provisions

To assist businesses following the continuing economic repercussions from the coronavirus pandemic, a significant Decree is now in force containing the following implications for employers:

1. Extension of state-funded furlough: Furlough due to COVID-19 (paid by the state) has been extended for further 18 weeks. To benefit from this extra period of furlough, employers need to pay a fee calculated on a complex formula based on comparison between revenues in the first semesters of 2020 and 2019. No fee is due if there was a drop on revenues more than 20% in 2020. Employers can choose to benefit from this extra weeks of furlough between 13 July and 31 December 2020.

2. Suspension of social security payments: Payments of social security contributions is suspended in the following two cases:

   A) up to 4 months (until 31 December 2020) for companies which were on furlough in May and June 2020 but who do not now seek to make use of the additional 18 weeks of furlough under point 1) above; and

   B) up to 6 months for companies who hire new employees on a permanent basis in the period 15 August-31 December. There is a cap on the maximum exemption.

3. Relaxation of requirements re: extension of fixed term contracts: It is possible to extend or renew fixed-term contracts for a maximum period of 12 months up to 31 December without (as would normally be required) indicating any specific reasons to do so.

4. Extension of ban on economic dismissals: The ban has been extended until the end of either the extra period of furlough (see point 1) or the exemption of payment of social security contributions (see point 2). It is possible to dismiss dirigenti. It is also possible to dismiss in the event of winding up of the company. In practice, the extension of the ban is rolling and linked to the use of furlough. The Decree is not clear on when it is possible to dismiss for companies who have never asked for furlough - clarification on this crucial point is expected.

Please contact us for further details.

See our coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.