Lavoro, Calderone: “The decree does not expand the precariousness”. The government is working to cut the structural wedge

The Minister of Labour, Marina Calderone, says that the new Labor decree approved on May 1 with the news on fixed-term contracts will not increase precariousness. And that the cut of the wedge, financed with around 4 billion in addition to the previous installments by the Draghi government and the Budget law, will become structural.

Causes and precariousness

“Absolutely not, there will not be an increase in precariousness. It’s just a matter of how you want to read a path, Calderone said speaking at 24 Morning on Radio24.

According to the minister’s reading, the Labor decree is an intervention “which eliminates the causes that are difficult to apply and which could generate litigation”. The decree, he explains, “entrusts the definition of the reasons to collective bargaining. Then there is a clause whereby where there is no provision in the contract, the parties are given the possibility to extend for a limited time window with a reminder to technical production reasons”. Calderone points out that the numbers of fixed-term contracts tell us that the question of reasons concerns 2.5% of fixed-term contracts. “97% – she says – last less than 12 months. The change concerns less than 3% of the contracts, for the first 12 months there are no reasons”. Finally, Calderone underlined that for individual agreements, the deadline is 30 April 2024 “to give collective bargaining time to be able to regulate the aspect of the reasons. It is not a worrying issue. There is a dynamism, the contracts must be renewed, I think it is a tool to encourage a new season of agreements”.

“Precariousness – he added – also arises from the abuse of a specific form of contract. Now with this decree we are trying to trace a path. In this period, however, what is increasing is the permanent contract”.

What does the new decree provide?

The text approved by the CDM as expected puts fewer constraints on the reasons for renewals beyond the year (up to twelve months are not required) and no later than 24 months: the causes are entrusted to collective agreements opending the contractual provision, identified by the parties for technical, organizational or production needs (in this case, however, by 31 December 2024). Or for replacements. As he explained Republic in the aftermath of President Mattarella’s warning about precariousness that does not go hand in hand with the country’s growth objectives, action is now being taken on the dignity decree of 2018 (M5S-Lega), already waived by the Draghi government, but for the post-pandemic time until last December 31st.

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There is therefore an expanded return to derogations. The first 12 months of a fixed-term contract remain without reason. Extendable for another 12 months in three cases: if the national collective agreement provides for it, if the parties agree, for the replacements.

1. In a collective agreement – national, territorial or corporate – signed by the most representative employers and trade unions, the renewal of the fixed-term contract beyond the annual term can be regulated.
2. The discipline, in the absence of a collective agreement, can also be written by the parties for “requirements of a technical, organizational or production nature”, until the end of 2024
3. The third concerns the possibility of renewal in case the employer needs to replace other workers.

The second case, noted Repubblica, actually eats the first. And this is because there are very few national contracts that have governed the causes. Both because all companies will tend to use the letter “b”: the direct agreement with the worker, the weaker party, hardly able to challenge the “needs of a technical, organizational or production nature” proposed by the employer. Especially in small companies – 95% of Italian companies have fewer than 9 employees – and which are not unionized. A further extension of up to 36 months is also possible without reason, but it must be stipulated with the “territorial management of the work competent for the territory”. These 12 extra months have existed since Jobs Act of 2015 That in total it reached 48 months without causes.

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The “structural” wedge cut

Another aspect touched upon by Calderone is that of cutting the tax wedge. With the Labor decree there is a cut in the contribution wedge for six months (no longer eight as in the initial hypothesis) and increases by another four points: for the pay periods from 1 July 2023 to 30 November 2023 the contribution exemption rises from the current two points to six points for incomes between 25,000 and 35,000 euros and from the current three years seven points for incomes up to 25,000 euros.

The measures are therefore financed until the end of the year. Without refinancing, from 2024 payrolls will suddenly become lighter again, even for significant amounts.

Calderone says that the government is working to extend the cut in the tax wedge until the end of 2023. so that for those with incomes of up to 25,000 euros there is a reduction of about 70% of the contribution levy. For those with an income of up to 35,000 euros, there is 60%. The commitment is to work to create the conditions for make this intervention structural. There must be a situation that allows it. We must act with prudence with attention to the accounts”. Calderone spoke of commitment and prudence also on the possibility of cuts in contributions for incomes exceeding 35 thousand euros. Considering only the interventions of the Meloni government, between the 5 billion of the budget law and the 4 of the labor decree (but for only six months) the 10 billion of necessary resources abundantly breaks through.