FURTHER FIXED TERM CONTRACT ESTABLISHED AT THE TERRITORIAL LABOUR INSPECTORATE (ITL)
The employment contract may have a period of validity lasting no more than 12 months. The contract may last longer, but in any case it must not exceed 24 months, only in the presence of at least one of the following conditions:
- temporary and objective requirements, outside the ordinary business, or a need to replace other workers;
- needs connected to temporary, significant and non-programmable increases of the ordinary business.
Unless otherwise provided for in the collective contracts and with the exception of seasonal work, the duration of the fixed term working relationship between the same employer and the same worker, by effect of a succession of contracts, concluded for carrying out tasks of the same level and legal category and regardless of the periods of interruption between one contract and another, may not exceed 24 months, but a further fixed term contract between the same subjects, lasting a maximum of 12 months, may be stipulated with the territorially competent ITL.
If the worker is re-employed with a fixed term contract within 10 days of the expiry date of a contract lasting up to 6 months, or 20 days from the expiry of a contract lasting more than 6 months, the second contract is transformed into an open-ended contract.
With note no. 8120/2019, the INL has provided its own opinion in relation to the assumption in which a request to stipulate a new fixed term contract exceeding 24 months is presented at the ITL, if the latter does not indicate the reasons (or conditions whatever it may be called) or does not respect the dilatory term between one contract and the next (so-called stop and go), specifying that:
- although the intervention of the Labour Inspectorate does not provide a “certification” as regards the effective existence of the reason, limiting itself to checking the completeness and formal accuracy of the contract content and the genuineness of the worker’s consent to signing it, recourse to the procedure is not admitted, if the reason is totally absent in contrast with what is ordered by mandatory requirements;
- it is not possible to proceed with the assisted stipulation of a further fixed term contract if the dilatory terms laid down in the second paragraph of art. 21 (“stop and go”) are violated.
INCREASE OF THE ADDITIONAL NASPI (UNEMPLOYMENT BENEFIT) CONTRIBUTION TO BE APPLIED TO FIXED TERM LABOUR CONTRACT RENEWALS
The so-called “Dignity Decree” (Decreto Dignità) has introduced some modifications to the fixed term contract. In particular, apart from having reduced the maximum duration of the fixed term contract without specifying a reason to 12 months, it has envisaged the increase of the additional contribution that finances the NASpI, payable by the employers, by 0.50%, on the occasion of each fixed-term contract renewal.
The Inps (National Insurance Institute), with memorandum no. 121/2019 and with message no. 3447/2019, provides, after a year, the instructions for managing the fulfilments deriving from the implementation of the above-mentioned measure. Beforehand, it is worthwhile pointing out that the starting date of application of the increase of the additional NASpI contribution in the event of renewal of the fixed term employment contract is established at 14th July 2018.
Article 3, Legislative Decree 87/2018 (Dignity Decree), has ordered that the NASpI contribution (ordinarily equal to 1.40%) will increase by 0.5 percentage points for each renewal of the fixed term contract, even temporary work contracts, except for domestic work contracts. The Institute reminds how, on the general level, the case in point of fixed term contract renewal occurs when the initial contract reaches its originally envisaged expiry date (or the subsequently extended one) and the parties proceed with signing a further fixed term contract.
However, considering that the Dignity Decree has extended the new rules of fixed term contracts also to temporary workers employed with fixed term contracts, the increase of the additional NASpI contribution also operates in the cases in which the same user has established a previous fixed term employment contract with the same worker or in the opposite case.
Furthermore, following discussion with the Labour and social policies Ministry, Inps specifies that, if the reason originally applied to the fixed term contract is modified, it means a renewal and not an extension, even if the further contract follows the previous one seamlessly. In this case, therefore, since it is a renewal, the increase of the additional contribution is payable. Otherwise, in the event of the parties having stipulated a first contract without a reason, because its duration was less than 12 months, and they subsequently extended the duration of the contract to over 12 months, indicating a reason for the first time, it is an extension and not a renewal. Since it is an extension, the increase of the additional contribution is not payable.
As regards the scope of application of the law being discussed, it is shown how the increase of the additional contribution is payable with reference to the renewal of every kind of fixed term contract to which the additional contribution is applied, including the contracts that regulate employment in the maritime sector.
As already mentioned, the increase of the additional contribution is payable by the employers affected with reference to fixed term contract renewals, even temporary work contracts, made from 14th July 2018, when Legislative Decree 87/2018 came into force.
The following remain excluded from the application of the increase of the additional NASpI contribution, because they were already excluded from this additional contribution:
- fixed term contracts of agricultural workers;
- workers employed with fixed term contracts replacing absent workers;
- workers employed with a fixed term contract for carrying out seasonal activities, as laid down by Presidential Decree 1525/1963;
The increase of the additional contribution is not applicable either to fixed term contract renewals of workers employed to carry out activities of teaching, of scientific or technological research, of transfer of know-how and of support, of technical assistance or coordination to innovation, stipulated by:
- private universities, including subsidiaries of foreign universities;
- public research institutes;
- public companies that promote research and innovation;
- private research authorities.
However, these latter cases in point remain liable to the NASpI financing contribution, including the additional contribution payable for fixed term workers, but not to the increase of the additional contribution with reference to the renewals of the fixed term contracts of workers assigned to carry out the activities listed above.
It is finally pointed out that the increase of the additional contribution indicated is not applicable in the event of extending the term of the fixed term contract.
The law, as mentioned several times, states that the additional NASpI contribution is increased by 0.5 percentage points for each renewal of the fixed term contract. Therefore, at each fixed term or fixed term temporary work contract renewal, the increase of 0.50% will be summed to what was previously payable for additional contribution.
For example in the event of a fixed term contract being renewed 3 times, the employer must pay the additional contribution according to the following measures:
- original contract: 1.4%;
- 1st renewal: 1.9% (1.4% + 0.5%);
- 2nd renewal: 2.4% (1.9% + 0.5%);
- 3rd renewal: 2.9% (2.4% + 0.5%);
In this regard, it is worthwhile pointing out that solely for the purposes of determining the measure of the additional contribution to which the increase of 0.5% must be added, contract renewals prior to 14th July 2018 are not taken into consideration.
Therefore, for the above purposes, the first contract renewal is considered the one signed after 14th July 2018, even if the fixed term contract has already been renewed before this date. For any subsequent contractual renewals, the measure of the additional contribution will be determined according to the calculation criteria indicated above.
The Inps also intervenes to clarify the framework of returning this additional contribution. In particular, this may be carried out in the following cases in point:
- transformation of the contract to an open-ended one. In this case, the conditions for returning the additional contribution occur after the trial period has been completed;
- employment of the worker with an open-ended contract within 6 months from the end of the previous fixed-term contract. In this case too, the return of the additional contribution occurs after the trial period has been completed. The measure of this return is determined by deducting a number of monthly payments comparable to the period from the end of the previous fixed term contract to the establishment of the new open-ended contract from the months of additional contribution payable by the employer.
Since the increase of this additional contribution still represents a component of the overall additional contribution, if the conditions determined by one of the 2 cases in point indicated above are met, the measure of the additional contribution subject to return to the employer who transforms the fixed term contract or who employs the worker with an open-ended contract also includes the increase of the additional contribution. It is pointed out that in the event of several contract renewals, the amount of the additional contribution and of the relevant increase regarding the last renewal of the fixed term contract occurring between the parties before the transformation or the re-employment with an open-ended contract is liable to recovery.
The office remains at your disposal for any further clarification.
Arianna De Carlo – Senior Payroll Specialist & Labour Consultant