Italy’s senate today approved a decree that increases limits on temporary contracts and penalises firms that move production offshore.

The so-called ‘dignity decree’ was approved by Italy’s populist government in July, which saw the upper house approve the decree by 155 votes to 125. It had already been passed by the Chamber of Deputies and so the decree now becomes law.

The dignity decree aims to increase job security and bring down Italy’s unemployment rate which stood at 10.9% in July, according to Eurostat.

The decree also includes a ban on advertising of all forms of gambling, which populist five-star movement leader Luigi Di Maio says hurts families' finances and targets the weakest members of society.

In his campaign, Di Maio promised to stop the so-called abuse of temporary contracts after former Prime Minister Matteo Renzi passed a law to liberalise their use.

In order to discourage the use of temporary contracts, the package increases costs for firms that use them, and reduces the number of times they can be renewed to a maximum of two years from three.

According to Reuters, most of Italy's employers' associations, whose members make heavy use of temporary contracts, have criticised the changes but opinion polls show they have strong voter support.

A poll by market research firm IPSOS agency showed support of 55% to 75% for the measures in the decree, with the strongest backing for the penalties on firms moving production abroad, higher compensation for wrongful dismissal and the ban on gambling ads.

During its passage through parliament, the government also introduced financial incentives for companies to hire young people on open-ended contracts.

The decree also increases the compensation companies must pay workers ruled by a court to have been wrongfully dismissed.

This is the first decree for decades that hasn't been dictated by lobbies and vested interests," Di Maio said. "Finally ordinary people have scored a point."

ISTAT data showed that as of May 2018 there were least 3 million people on temporary work contracts and almost 15 million had permanent contracts.

The Italian staffing market had been among the fastest growing in Europe over the past few years but the days of double digit growth may have come to an end.