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Italy – Monti labour reforms get (first) seal of approval

26 March 2012

The Cabinet of Prime Minister Mario Monti approved the bill to reform Italy’s labour market on Friday, after some trade unions and politicians fiercely opposed the move. The reforms aim to make the market more flexible and create more temporary jobs. 

The Cabinet has so far approved a draft bill since Mr Monti decided against implementing a decree on the labour reforms which would have applied changes to the law immediately. It is unknown when the Government will present the bill to Parliament.

But in a press release the Government confirmed that it had adopted a draft version of the package, which will be adjusted by ministers before going to Parliament. “The cabinet approved today [Friday]... a draft bill on labour reforms, which the country has long been waiting for and which Europe has hoped for,” it said.

The Government also said that the labour reforms will create a “dynamic, flexible and inclusive labour market” that will spur on competition and contribute to growth. However, Mr Monti has been criticised for rushing into the labour reforms, especially after Italy’s largest trade union, the CGIL, has threatened to go on strike over the reforms. The CGIL claims that the proposed changes to the law will fuel mass unemployment.

Particularly the planned changes to Article 18 have caused a stir as this allows workers to sue for unfair dismissal if the company employs more than 15 staff.  However, Mr Monti proposes that companies should pay out employees instead out reinstating them. Just last week McDonald’s was involved in an unfair dismissal case that forced the company to reinstate two temporary workers.

The labour reforms are not expected to come to force before the summer. 

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