The Law modifies the rules on fixed-term contracts and strengthens some labour institutions that can facilitate economic recovery.

Following the modifications that were made to Legislative Decree No. 81/2015 of Law No. 96/2018 (the so-called "Dignity Decree") for fixed-term employment contracts, also for Agency Work, stipulated from 14 July 2018, in accordance with Art. 19 of the aforementioned Decree, the maximum duration of a fixed-term contract is:

12 months, as general rule

24 months, only if at least one the following conditions is met:

temporary and objective requirements, unrelated to ordinary operations

replacement requirements of other employees;

requirements relating to significant and unplanned temporary increases in ordinary operations.

With art. 41-bis, the legislator has made significant changes to the discipline of the fixed-term contract with two amendments, specifically on the conditions for setting themaximum term referred to in Article 19 of Legislative Decree No 81/2015, with the aim of promoting and supporting temporary employment in the phase of exit from the pandemic.

The first amendment is contained in subparagraph a) of Art. 41bis, which adds, in Article 19, “specific needs provided for by collective agreements referred to in Article 51” asan additional condition for setting the 24 months fixed-term contract.

It means that collective bargaining is now entrusted with the task of defining the reasons, or rather identifying the "specific needs" that legitimise the application of the 24 months term, when required by the legislation, to fixed-term employment contracts. The legislator now entrusts the social partners with the definition of "specific needs", thus requiring a precise determination of the conditions under which a fixed-term contract may be set.

Moreover, it provides that collective bargaining at any level, pursuant to Article 51 of Legislative Decree No. 81/2015, may identify the specific needs that legitimise the imposition of the term to the contract, including an interconfederal agreement or a national, territorial or company collective agreement, at the condition they are concluded by the most representative trade unions at national level or at company level.

It should be noted that, before the last changes, the fixed-term contract, after the twelfth month, may be renewed and extended only in the presence of the reasons expressly provided for by law (pursuant to Article 19 of Legislative Decree 81/2015) and, specifically, temporary needs unrelated to ordinary activities, replacement of other workers and related to increases in activity. The new provision now recognises the possibility for national, territorial and corporate collective agreements to identify, in a flexible manner, new reasons dictated by the specific needs of the sector, the territory or the company in the presence of which it is possible to append to the contract a term of duration exceeding 12 months but, in any case, not exceeding 24 months.

It is also relevant to point out that, the conditions set out in Article 19(1) of Legislative Decree 81/2015, and therefore the grounds, also apply to fixed-term employment contracts for the purpose of supply.

With the second amendment, the legislator introduced a new employment hypothesis, which allows temporary employment provided for by collective bargaining, with the limit of the minimum guaranteed duration of the contract 'exceeding twelve months'. This enables workers to be able to rely on a sufficient period of employment until 30 September 2022.

The legislator therefore used the fixed-term contract as governed by collective bargaining, in this second hypothesis, as an employment promotion tool, temporary but not too short (at least one year), as an active labour policy measure.

• Assolavoro and Confindustria published their analysis on this important reform of fixed term contract and its application, and they both commented it in a positive way.

The General Director of Confindustria, Francesca Mariotti, at a hearing in connection with the examination of the decree-law at the Joint Budget, Treasury and Planning Committees of the Chamber of Deputies on May 2021, had pointed out that “[t]he decree lacks an intervention on fixed-term contracts, aimed at overcoming the current numerous constraints related to reasons, duration of contracts and additional contributions. With appropriate adjustments, which could also be made with the help of bargaining, firms could better size their workforce, while fully respecting all the economic and regulatory protections already provided to temporary workers. The coming months of 2021 could be the months of recovery, provided that the vaccination campaign is rapidly concluded, and the country embarks on the path of reforms and orderly implementation of the National Reform Programme. To this end, it is necessary to abandon particularism and build a strong partnership between the public and private sectors that, while respecting their respective roles and in a spirit of collaboration, will accompany the country in its recovery, making it more modern, inclusive and sustainable. Businesses are ready to play their part”.

The Chief Executive Officer of Assolavoro, Agostino Di Maio, commented that “[t]he innovation made to the regulation of fixed-term contracts has been strongly supported by the Association, which, in constant collaboration with Confindustria, has supported the modification activity aimed at overcoming the rigidity imposed by the Dignity Decree with a view to greater flexibility in the matter subject to the intervention of collective bargaining”.