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What You Need to Know about Italy’s Jobs Act

The Senate in Rome is debating Premier Renzi’s Jobs Act. There is some doubt about whether the reform will pass in its present form or if some modification will be made.

The Jobs Act is a central platform of Renzi’s Italy reform program that also includes, judicial, electoral, bureaucratic and constitutional reforms. There is universal agreement outside of Italy’s vested interests that the reform program must go through if Italy is ever to recover international competitiveness and begin achieving its potential.

The central feature of the Jobs Act is the reform of Article 18. This is the section that makes it almost impossible for employers in Italy to downsize their workforces and is regarded as being the main reason for Italy’s employers’ reluctance to hire new staff. Art.18 denies companies the flexibility to adjust their workforce to economic conditions.

Perversely in Italy, the effect of Art. 18 has led to the growth of temporary contracts under which staff have few employment rights and are arguably worse off. However, as with trade unions everywhere, Italy’s unions are more concerned with protecting the rights of those who have jobs rather than with those millions without work and with no hope of finding jobs.

Art.18 impacts heavily on Italy’s youth who find it increasingly difficult to get a start in the job market. Almost 50% of Italy’s youth are unemployed and without much prospect of starting on a career path.

The opponents of Art.18 reform are asking for changes; Renzi’s reform calls for Art.18 to apply only to existing employees but not to new hires. Opponents want the reform to apply to new hires who are unjustly dismissed. Others opposed to the reform want Art.18 to continue to apply if a worker has been in a job for more than three years.

As usual, Italy’s parties are split. A minority within Renzi’s PD oppose the Premier’s reform; Berlusconi’s Forza Italia will vote against it if Renzi waters down the reform; the New Centre Right seems to agree with Forza Italia and will not support a weakening of the proposals. Naturally enough the major union group, the CGIL, is driving opposition to the changes. However, PD officials believe there will be enough support for the reforms to pass the Senate when the vote is expected on October 8.

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Other aspects of the Jobs Act address the temporary contracts problem by scaling back dramatically the way in which they can be used. This is designed to create permanent jobs even if they are tied to economic conditions and the health of companies. The Act also seeks to establish a minimum wage for Italy and an improved unemployment benefit system.

If it succeeds the Jobs Act will change Italy’s employment market which is currently heavily skewed towards those in jobs, and it will dramatically improve the job prospects of the unemployed, particularly Italy’s jobless youth, and it will give companies the flexibility to run their businesses in line with economic conditions.

At last Italy will have a chance to recover the international competitiveness enjoyed by other nations and remove the sclerosis that has been choking progress and denying Italians opportunity.

By Ex-Australian Politician in Tuscany Stephen Lusher

Stephen Lusher
Stephen Lusher

Stephen Lusher served five terms in the Australian Federal Parliament. He worked around the fringes of politics before setting up Lush on Bondi, a trendy bar on Sydney’s Bondi Beach.

Frequent trips to Italy led to an inevitable love affair with Tuscany. He and his wife Cathy sold up in Sydney and purchased Il Mulinaccio in 2008.

Within two months of moving to the Chianti Hills he was diagnosed with throat cancer. The experience led to him re-focusing his life and priorities. After a few uncomfortable years he thinks he has it beaten.

Stephen’s interests include wine, food, history, culture and travel. He struggles with the Italian language and indulges himself in some occasional writing.

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