The ban on dismissals remains in place

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Date:
18 Aug 2020

The so-called August Decree (Legislative Decree no. 104 of 14 August 2020) has extended the ban on dismissals (which would have expired on 17 August 2020), varying according to the use of the new 18-week wage supplementation fund or, as an alternative, the exemption from paying social security contributions granted to employers that do not intend to request access to the new fund.

Therefore as it stands, subject to a further in-depth analysis and any further clarifications which may be released, the situation from 16 August 2020 seems to be the following:

  • Employers that intend to apply for access to the new Covid-19 Wage Supplementation Fund will be able to proceed with a collective or individual dismissal for justified objective reason only after having benefited from the fund for the full 18 weeks, which can be used from 13 July to 31 December 2020. The 18 new weeks of the Covid Wage Supplementation Fund are divided in two blocks of 9 weeks, and the first block can also include the weeks of access to the fund under Legislative Decree 18/2020, previously requested for the period starting from 12 July 2020.   
  • Employers that do not intend to request access to the new Wage Supplementation Fund and have already benefited, in the months of May and June 2020, from the previous wage supplementation measures under Legislative Decree 18/2020 and subsequent amendments, will be exempt from paying social security contributions for a period equal to double the hours of wage supplementation fund used in the aforementioned months of May and June 2020 (e.g., companies that accessed the fund for three weeks during those two months, will be exempted from paying social security contributions for six weeks), up to a maximum of four months. In such case, dismissals - under an initial interpretation - would be possible at the end of the period of the social security contribution exemption, varying according to the concrete situation of each company.
  • It would seem (at the moment and taking a prudential approach) that employers that do not intend to request access to the new Fund and do not want or cannot benefit social security contribution exemption, cannot proceed with a collective or individual dismissal for justified objective reason until 31 December 2020 (last date for requesting access for the Fund).
  • In any case, it is possible to proceed immediately with dismissals, both collective and individual, in three cases: a) the permanent cessation of a business by liquidation of the company; b) bankruptcy without temporarily carrying on the business; c) a company-level collective agreement, signed with the trade unions that are comparatively most representative nationally, which provides for layoffs with incentives, limited to the workers who subscribe to such agreement (in this case, the worker will be granted the involuntary unemployment benefit “NASPI”). Remaining in place is the exception to the dismissal ban (which was already provided for) allowing for a change in service contract with the re-employment of the personnel employed by the new service contractor. 
  • Executives (that is, “dirigenti”) remain excluded from the ban on dismissals.