Milleproroghe Decree 2021 and the Italian Budget Law for the year 2021 – Main HR measures

MILLEPROROGHE DECREE 2021- NEWS ON SMART-WORKING

Law Decree 31 December 2020 no. 183 – "Milleproroghe Decree 2021" – has been published on the Italian Official Journal on 31 December 2020.

Among other measures herein provided, the Decree confirms the application of the smart-working employment scheme through the simplified procedure (pursuant to article 90, par. 3 and 4 of Law Decree no. 34/2020 confirmed as Law no. 77/2020, also known as "Relaunch Decree") until 31 March 2021.

Due to the above, and until the end of the COVID-19 epidemiologic emergency (in any case until 31 March 2021):

• The employer with business in the private sector shall communicate to the Labour Ministry, via web, the names of the employees and the ending date of their smart-working employment scheme, by using the official documentation made available by the mentioned Ministry's web site;
• The smart-working employment scheme – as regulated by articles 18 to 23 of Law no. 81/2017 – can be applied by the private employer to any subordinate employment relationship also in the lack of individual agreement on this regard (however, all other legal requirements must be met);
• The obligation to provide an information notice pursuant to article 22 of Law no. 81/2017 can be carried out electronically, also by using the official documentation made available by INAIL website.

THE ITALIAN BUDGET LAW FOR THE YEAR 2021

The "Budget Law for the year 2021" (Law 30 December 2020, no. 178) was published on the Italian Official Journal on 30 December 2020, and it came into force on 1 January 2021.

The Budget Law includes several measures with an employment-related impact. In particular: 

• Extension of the ban to dismiss for redundancy (article 1, par. 309-311): the employer continues to be prohibited from implementing individual and collective dismissals for redundancy, and this ban would expiry on 31 March 2021. At the same time, any pending procedure started on this regard since 23 February 2020 is suspended.

The mentioned ban does not apply in the following circumstances:

- Dismissals due to the definitive shut-down of the company business, as a consequence of the company's liquidation where the prosecution of its business is not authorised (even on a partial basis). 
- Bankruptcy of the company, in the case the prosecution of the business is not planned, or the closure of the business has been issued.
- In the case of company-level bargaining agreement, undersigned by unions mostly representative on a national level, where providing an incentive package for the termination of the employment contracts and to the extent involved employees adhere to such agreement.
- Where the employees involved by the dismissals, already working in the context of supply contract, are re-hired when the new contractor steps in, pursuant to applicable law, national collective bargaining agreement or supply contract's clause.

• Extension of fixed-term employment contracts (art. 1, par. 279): until 31 March 2021, the employer is allowed to extend the duration of a fixed-term employment contract or enter into the renewal of a fixed-term employment contract – only once and for a maximum period of 12 months – also in the lack of "reasons" behind the mentioned extension or renewal, requested by art. 19, par. 1 of Legislative Decree no. 81/2015.
  
• Extension of the wage compensation funds for COVID-19 reasons (art. 1, par. 299 et seq.): employers having their working activity partially or totally suspended for COVID-19 reasons can submit an application for having employees suspended from work benefiting from the ordinary allowance supporting their missed salary ("cassa integrazione guadagni ordinaria" or "assegno ordinario") or the special allowance set out by the State as extraordinary measure supporting their missed salary ("cassa integrazione guadagni in deroga"). The maximum duration of this measure is additional 12 weeks.

These 12 weeks shall be taken in the timeframe between:

- 1 January and 31 March 2021 with reference to the "cassa integrazione guadagni ordinaria";
- 1 January and 30 June 2021 with reference to the "assegno ordinario" measure and "cassa integrazione guadagni in deroga".

During these periods, the mentioned 12-week period entails the maximum duration of the allowances that the employer can request for COVID-19 reasons.

In the case the mentioned allowances were requested by the employer pursuant to Law Decree no. 137/2020 (so called "Ristori Decree", then confirmed as Law no. 176/2020) and they are (fully or partially) taken starting from 1 January 2021, these periods shall be counted – where authorised – as part of the new 12-weeks period set out by the Budget Law.

Should the employer do not submit an application of the mentioned allowances, it will be entitled to benefit from a reduction of its quota of social security contributions (the reduction corresponds to up to 8 weeks). The access to such reduction is granted by 31 March 2021. Furthermore, the reduction applies to the hours of allowance (integrazione salariale) granted in May 2020 and June 2020 and does not cover contributions due to INAIL.

These benefits are granted also towards employees hired after 25 March 2020 and, in any case, to employees employed as of the date the Budget Law came into force (1 January 2021).

• Reduction of contributions in the case of "under 35" hirings (art. 1, par. 10-15): newly hired employees (on an open-term basis) and movements from fixed to open-term employment contracts implemented during the years 2021 and 2022 benefit from certain reduction of contributions pursuant to art. 1, par. 100 to 105 and 107 of Law no. 205/2017: in particular, the employer benefits from 100% reduction of contributions, for a maximum period of 36 months, and up to an overall annual amount of EUR 6.000. Without prejudice to the other requirements, the period of reduction is increased to 48 months if the place of work of the newly-hired employee is the employer's office or business unit located in Abruzzo, Molise, Campania, Basilicata, Sicilia, Puglia, Calabria and Sardinia.

The mentioned reduction applies to employers who (i) did not implement during the 6-month period before the hiring, and (ii) will not implement in the 9-month period after the hiring, individual dismissal for redundancy or collective dismissal procedure involving employees having the same position and working in the same business unit (of the newly-hired employee).

The effectiveness of this provision is subject to the European Commission's authorisation. 

• Reduction of contributions in the case of "women" hirings (art. 1, par. 16-19): the employer can benefit from a reduction of contributions in the case of female-employees are hired during the years 2021 and 2022 and these hirings imply an net occupational increase (calculated as the difference between the number of employees in force recorded during each month, and the number of the employees in force as an average in previous 12-month). The reduction of contributions is 100%, up to EUR 6.000 per year, in accordance with art. 4, par. 9 to 11 of Law no. 92/2012.

The effectiveness of this provision is subject to the European Commission's authorisation. 

• Reduction of contributions for South Areas (art. 1, par. 161-169): there is a reduction of contributions for the purpose of limiting the COVID-19 impact on occupational levels and for the purpose of safeguarding the occupational levels of certain areas of the South of Italy with a deep and serious social-economic disadvantage (Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicilia). In particular, according to art. 27, par. 1 of Law Decree no. 104/2020, employers of the private sector would benefit from a reduction of contributions until 31 December 2029. 

In particular, the reduction of contributions will be equal to:

- 30% of social security contributions to be paid until 31 December 2025;
- 20% of social security contributions to be paid and relating to the years 2026 and 2027;
- 10% of social security contributions to be paid and relating to the years 2028 and 2029.

The effectiveness of this provision, where referring to the timeframe between 1 July 2021 and 31 December 2029, is subject to the European Commission's authorisation. 

• Extension of the so-called "Social APE" (art. 1, par. 339): the effectiveness of the experimental measure called "Social APE" – envisaged to expire on 31 December 2019, then extended until 31 December 2020 – will be in force until 31 December 2021.

This is a special allowance, borne by the State, paid by INPS in favour of individuals (to the extend certain age and other conditions are met) until they meet pension requirements. 

• Extension of the early retirement called "isopensione" (art. 1, par. 345): certain employees will have the chance to be granted with an early retirement (called "isopensione") in the case they reach the minimum pension requirements within 7 years from the date of termination of the employment relationship. The effectiveness of this experimental measure is extended until the year 2023.

• "Expansion Professional Contract" (art. 1, par. 349): the experimental measure recently created for the purpose of supporting the generational turnover of "big companies" (called "Expansion Professional Contract") will continue to be effective for the year 2021 and will cover also "small companies".

This measure was addressed to companies employing at least 1,000 individuals: now also employer employer (minimum) 500 employees (or employers having in force (minimum) 250 employees where the hirings are linked to the exit of employees close to the pension requirements) can have access to this measure.

Companies with more than 1,000 employees would benefit from additional reduction of the costs for the early retirement where the termination of three relationships correspond to one hiring.

• New leave for the employee-father (art. 1, par. 25): the employee-father is entitled to one day off in the case of perinatal death of the child.
  
• Paternity leave (art. 1, par. 363-367): the mandatory leave granted to the employee-father is increased from 7 to 10 days starting from the year 2021.
  
• Fragile employee and with serious disability (art. 1, par. 481-484): the effectiveness of all measures stated by Law Decree no. 18/2020 for the safeguard of fragile employees and employees with serious disabilities are all confirmed until 28 February 2021.

In particular, the mentioned extension includes the equal treatment between the absence from work and the public and private employees' hospitalization (where having a suitable medical-legal official documentation issued on this regard).

Furthermore, a new general rule is issued, according to which fragile employees shall perform their working activities pursuant to a smart-working regime, performing different duties and tasks (to the extent they belong to the same contractual level or category), in line with applicable bargaining agreements' provisions, or performing specific professional training also remotely. 

This newsletter is not a legal advice and it does not have the purpose of providing a detailed and exhaustive description of the pieces of legislation therein mentioned: this briefing wishes only to update its addressees on new piece of legislation.

Authors: Giorgio Manca, Paoloa Mariani and Edoardo Pozzolini.