Economy / Politics

Employment termination reform considered in Italy

The International Monetary Fund praised Prime Minister Renzi’s stated intention of amending Article 18 of the Organic Labor Law, which compels employers to reintegrate workers fired without cause.

It should be noted that Article 18 applies only to enterprises with more than 14 employees, with are not so many in Italy, whose economy is dominated by SMEs. That’s why some observers doubt if it is really worth amending the provision, which would trigger a harsh reaction by the trade unions.

After all, Article 18 had already been amended by the Monti Government.

Mr Renzi would like to exclude the application of Article 18 to new contracts, which would become “incremental protection contracts” instead, with Article 18 applying only after three years or the compulsory reintegration replaced altogether by an indemnity.

Italian fired workers can claim unemployment benefits only in limited cases.

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