Co-funded by the European Union

Italy: novelties in the extension of fixed-term contracts

  • The Italian government extended the ability for employers to use fixed-term contracts.  
  • The change increased the ability to renew fixed-term contracts and increased the maximum duration of working on a fixed term contract.  
  • The changes applies to fixed-term contracts concluded by employers and employment agencies alike. 

As already described in the June issue of the IOE-WEC Newsletter here, the Relaunch Decree (Decree Law N. 34 adopted on 19 May 2020) allowed for an extension of the duration of fixed term contracts or their renewal without having to specify the reason until 30 August 2020.  

This legislation was welcomed but not considered  optimal due to the specific situation faced by companies in the recovery phase, or during the potential  second wave of the virus. The agency work sector advocated for maintaining these measures till the end of 2021.  

With the August Decree (Decree Law No. 104 of 14 August 2020),  new changes to the renewal of fixed-term contracts have been determined. Similar to the previous legislation, this Decree allowed for an one-time only extension of the fixed-term contracts for a maximum of 12 months and only once, without having to specify the reason and respecting the 24 months maximum duration of the different fixed-term contracts in total, until 31 December 2020. This is valid for “direct” fixed-term contracts signed between the company and the employee and for fixed-term contracts through a temporary work agency . 

The Italian Labour Inspectorate’s note No. 713/2020 further clarified the following: 

    • the 12 months extension is possible even if there have been already four extensions of the fixed-term contract, which is the maximum number of extensions foreseen in the fixed-term work legislation (legislative Decree N. 81/2015).  
    • the renewal is possible even without respecting the usual break between one contract to another (10 or 20 days, according to the duration). 
    • 31 December 2020 is the deadline to extend the contract. This means that contracts signed before the end of 2020 will be extended  until the end of 2021. 

The note sheds light on important elements of this  regulation, which provides the necessary flexibility to a labour market that has been extremely hit by the global crisis.