Emp Update Italy 0508

06 May 2008

Caterina Rucci, Giulia Brambilla

Fixed-term contracts: the changes in Legislative Decree no. 368/2001 introduced by Law no. 247/2007


Law no. 247/2007 has introduced some relevant changes to the rules on fixed term contracts of Legislative Decree no. 368/2001: by this legislative decree Italy had enacted in 2001 the EC Directive no. 1999/70/CE.

The reason for the introduction of the new provisions is the need to stop the common practice of a systematic succession of fixed term contracts finalised to avoiding open ended contracts also in cases where a permanent need of employees would exist.

New legislation

First of all, the new law has expressly re-introduced the general principle under which employment contracts are (as a rule) executed for an indefinite term. This principle, never really dropped by the Courts and the jurisprudence also after 2001, was however in contrast with the general purpose of the 2001 Decree, which was oriented to a general increase of flexibility in the labour market.

Another change introduced into Legislative Decree 368/2001 (as modified by the 2007 law), is that the total duration of fixed terms contracts with the same employer cannot exceed 36 months in total, including: new fixed terms contracts; prorogations of the first fixed term contract or of successive ones; and new fixed term contracts also if they respect the statutory interruption period (10 days for contract shorter than 6 months, 20 days for contract longer than 6 months) between one fixed-term contract and the other. Should the total duration of all these contracts, prorogations and new fixed-term contracts exceed such 36 months’ limit, the employment relationship will be considered as a permanent one.

The only case when the 36 months’ limit can be exceeded is if a further fixed term contract between the parties is signed before a special body at the Employment office and with the assistance of a Trade Unions representative. The major Trade Unions at national level shall provide general guidance on the duration of this new additional contract. If this procedure is not respected or the new limit exceeded, the new contract shall be considered as a permanent one.

Current fixed term contracts already in force will continue until their original expiry. However, the period of work already carried out at the time of the entry in to force of the new law will be calculated, together with the following periods of activity, to determine the maximum period of 36 months.

High level executives (“dirigenti”) can still be hired for a fixed–term period of a maximum duration of 5 years, and can withdraw from them by respecting the usual notice period. They are not subject to any of the new rules, but shall be included into calculation of employees for the effects of trade union rights.

The new law has also reintroduced the general right of fixed term and seasonal employees, to have a priority right in case of new hirings on a permanent basis. Such right lasts one year and the employees concerned shall make a specific request, within 6 months from expiry of their fixed term contract.