In response to the labour market reforms proposed by Prime Minister Matteo Renzi, Italian businesses want the government to introduce active labour market policies, outplacement programmes, and restrictions on the use of so-called “bad” flexible contracts.

Business also want to introduce permanent contracts with gradually increasing protection and benefits, according to a survey from the Permanent Labour Market Reform Observatory, in conjunction with Italian staffing firm Gi Group and OD&M Consulting. 

Employment policies in Italy have traditionally provided strong safeguards for those in work while they paid less attention to the need to get the unemployed into work.

According to the survey, as a result of the Jobs Act, the Legislative Decree introduced in March 2014, more than 60% of survey respondents advised that their use of fixed-term and temporary contracts had not changed and are not expected to change in 2015. Just under a quarter (23%) of respondents reduced their use of temporary contracts, while 8% increased their use.

According to 49.5% of respondents, the government’s top priority in terms of the labour market should be helping the unemployed to find another job via outplacement programmes.

A lively debate is currently underway in Italy on the opportunity to replace the existing permanent contract with a “gradually increasing protection” contract, which would guarantee that an employee who was dismissed without due cause would receive a monetary indemnity proportional to their working age, in addition to outplacement support. The existing permanent contract compels companies to rehire the laid-off employee.  

Four-out-of-10 (42.5%) of companies interviewed in the survey are in favour of a gradually increasing protection contract; but without the obligation of rehiring the employee, without the payment of a monetary indemnity, and without the support of an outplacement programme.  A third (32.6%) of companies do not think that the gradually increasing protection contract necessary, while 24.9% think the employee should have the right to be rehired, but only 3 years after the employment date. 

More than eight companies out of ten (87.4%) think there are too many different types of employment contract.  The first two contract formats that companies would discontinue are the project-based contract (48.4%) and profit-sharing contracts (45.3%). Project work contracts are more familiarly referred to as ‘Co-co-pro’ in Italy – an abbreviation of ‘collaborazione cocolimata a progetta’.

Stefano Colli-Lanzi, CEO of Gi Group, commented: “The Italian Parliament is currently discussing the future of the Italian labour market. The more than 500 companies that participated in our survey are certain that they want a labour market that is primarily focused on active labour market policies. [They also want] a streamlined labour market with fewer types of contracts, by first eliminating the bad flexibility contracts; such as the project-based contracts.”

“Above all, they want a labour market where the permanent contract, which is now in its weakest definition, is replaced by a gradually increasing protection contract where the protection for the worker comes from outplacement services, [which are] the only really useful tool that provides an opportunity to find another job.” 

“As the leading Italian multinational staffing company we really hope that Parliament creates an all-encompassing reform taking into consideration these suggestions. With this type of reform, Italy would have a modern labour market, where the permanent contract would once again be the primary hiring tool used by companies and where staffing companies could provide the system with the flexibility it requires,” Mr Colli-Lanzi concluded.