Meanwhile, the Constitutional Court is surveying the Italian electoral system. Yet, the fate of the next elections could have been dictated by another referendum. This time, the questions proposed by one of the three largest Italian trade-union federations, the left-wing oriented CGIL, are aimed at repealing some controversial employment law provisions. They all deal with labour law reforms deemed to have worsened the position of workers. One in particular - article 18 of Law n. 300/1970 as amended by Renzi’s “Jobs Act” – establishes new remedies in case of unfair dismissal and has been the subject of much debate. The new remedies are indeed connected to the cornerstone of Renzi’s labour market reforms, i.e. the single employment contract with progressive rights and protections, which has caused significant fractures between the ex-Premier and some factions of his party (Partito Democratico). Therefore, since the consultation should take place around May 2017, potentially just a month before the new elections, some commentators suggested that the outcome of the referendum could have potentially influenced if not anticipated the results of the elections.
However, unless further developments are seen with CGIL planning to bring the case before the European Court of Justice, article 18 will remain as is and will not be subject to the upcoming referendum. Indeed, on 11 January 2017, the Italian Constitutional Court rejected the relevant ballot question. Motivations are to be filed in the coming weeks. Leaving aside constitutional issues dealing with the admissibility of the ballot wording and its proposed outcomes, it is important to take a closer look at the actual provisions and the underpinning labour market policies contrasted by CGIL.
Let’s start with the questions that have been upheld by the Court. The first one deals with the so called “vouchers system”. Vouchers are traceable payment instruments (currently valued at 10 euros per hour) introduced for occasional work of up to a maximum amount (7.000 Euro per year). The system was first introduced to allow in certain sectors and for certain activities (eg. domestic work) the engagement of workers outside the scope of standard employment relationships. The instrument was conceived to provide a legal avenue for those activities that would often be paid “cash in hand” in the absence of an alternative legal paradigm for casual employment. However, the latest reforms, by opening the use of vouchers to all sectors in order to capture a greater proportion of irregular work, has triggered, according to many, a significant distortion of the original purpose. The concern is that vouchers would now be chosen, instead of a different employment arrangement, to undercut working conditions.
The second provision deals with the allocation of responsibility for a series of obligations (eg. salary payments) vis a vis employees involved in triangular work arrangements such as subcontracting. The original provision postulated a strict joint liability regime amongst all the entities in a supply chain context. However, following reforms watered down the aforementioned regime. Indeed, the new provision allows the user company or any other company in the supply chain to claim the so called “beneficium excussionis”, thus requiring the employee to proceed against the principal debtor first. Moreover, the provision now also incorporates the possibility to avoid the strict solidarity regime and access a duty-based liability model to be introduced by the industry-level collective agreements. In light of the above, the aim of the referendum would be to restore the previous solidarity regime and allow indirect employees to enjoy the same guarantees as direct employees, regardless of the actual responsibilities of lead companies.
Finally, article 18 of the Italian Workers’ Statute. The question rejected by the Court was aimed at reestablishing the stronger protections, i.e. reinstatement v compensation, provided by the former version of this provision in some cases of unfair dismissal and extend it to all organisations with more than 5 employees. The amendment of article 18 under Renzi’s Jobs Act, in an attempt to make dismissals less onerous for businesses and encourage hiring, introduced a progressive compensation amount based on the employee’s lenght of service (between 4 and 24 month salary) and eliminated the alternative remedy of reinstatement in case of dismissal served for a non genuine redundancy or excessive disciplinary reason.
The labour market reforms underpinning the provisions at issue – all enacted since the wake of the global financial crisis and some finalised by Renzi’s government - are part of a broader European agenda drafted to remove the rigidities of employment protection laws in certain countries. These laws are deemed, according to a particular narrative, to refrain business investments and trigger high unemployment rates. While the long-term results of the reforms at stake are yet to be tested, the risk is that a straightforward repeal of the provisions under scrutiny would probably leave the Italian labour law system unprepared to face the challenges of the modern labour market. Ad hoc adjustments might be auspicable instead.
