Fixed-term contracts: National Labour Inspectorate – INL’s operating instructions on the new reasons

With its note no. 1363 of 14 September 2021, the National Labour Inspectorate (“INL“) has provided operating instructions on the amendment to regulations on the reasons to be included in fixed-term contracts.

Regulatory references

The rules on fixed-term employment contained in Legislative Decree no. 81/2015 – as amended by Italian Legislative Decree no. 87/2018, converted into Law 96/2018 – have been substantially changed following the enactment of Decree Law no. 73, converted with amendments, by Law no. 23 July 2021, no. 106.

Article 19 of Legislative Decree no. 81/2015 has been amended with the insertion of letter b-bis) to paragraph 1 and paragraph 1-bis.

The legislator has provided for the possibility of a new type of reason defined by fixed-term contracts in national, local or company collective agreements stipulated by comparatively more representative trade union associations at national level and company collective agreements stipulated by their company trade union representatives or the unitary trade union representative body. In addition, employers may enter into a first fixed-term contract lasting more than 12 months, but not exceeding 24 months, if there are specific needs provided for by collective labour agreements until 30 September 2022.

INPS clarifications

The INL stated that the reasons are required for contracts exceeding 12 months, and in the following cases:

1. contract extension when the 12-month period is exceeded (Article 21, paragraph 1), Legislative Decree no. 81/2015);
2. renewal of the fixed-term contract (Article 21, paragraph 1), Legislative Decree no. 81/2015);
3. further fixed-term contract, having reached the threshold of 24 months, stipulated at the Labour Inspectorate – ITL and of up to 12 months (Article 19, paragraph 3, Legislative Decree no. 81/2015).

The new legislation impacts each of the profiles identified above, since the reference contained in Article 21 paragraph 1 (the additional contract at the ITL falls within the regulations on the obligation to provide a reason, being qualified as a renewal) refers directly to Article 19, paragraph 1.

To be valid, the collective bargaining measure (“specific needs provided for by the collective agreements referred to in Article 51”) must meet two requirements:

1. a) the “legitimate” collective agreements must be those provided for in Article 51 of Legislative Decree no. 81/2015, i.e. the “national, local or company collective agreements entered into by comparatively more representative trade union associations at national level and company collective agreements entered into by their company trade union representatives or by the unitary trade union representative body”;
2. b) collective agreements must identify “specific needs” to terminate the contract, if necessary.

If the application uncertainties on representation remain unchanged, it is worth paying attention to the need for agreements to “specify needs” since there are no certain indices of measurement. The ITL correctly considered that collective bargaining must identify practical cases, without using general formulations, for example the well-known “technical, organisational, and production reasons.”

The above is a useful support in agreements signed based on the new delegation, and as an interpretative key for referring to provisions generally contained in national collective bargaining. Even in the absence of an express delegation of powers, national collective bargaining has previously identified the reasons for using fixed-term contracts and the new legislation removes any doubts as to the legitimacy of such contractual provisions. The absence of these provisions could have played a role in detailing/supplementing the reasons during litigation without being “legally binding.”

Compared to proximity bargaining, under Article 8, Decree Law no. 138/2011 – which can be exploited in derogation from the mandatory system of reasons – the bargaining under Article 51, Legislative Decree no. 81/2015 does not require the purposes outlined in Article 8 and does not need trade union majority mechanisms.

According to the new regulations “the time limit exceeding 12 months, but not exceeding 24 months, referred to in paragraph 1 of this Article, may be applied to employment contracts which meet the specific needs provided for by the collective labour agreements referred to in Article 51, under letter b-bis) of the same paragraph 1, until 30 September 2022”.

As the INL pointed out, the provisional nature of the regulations is for specific cases where it is necessary to provide reasons, i.e. when a first contract duration exceeds 12 months.

There are two consequences:

1. to use reasons for contracts with a duration exceeding 12 months, the deadline for signing the individual contract is 30 September 2022, regardless of the expiry date, which may be later;
2. after 30 September 2022, the collective bargaining reasons may still be used in the remaining cases where there is an obligation to provide reasons which do not fall under paragraph 1-bis (extension beyond 12 months, contract renewal and additional contract at the ITL).