The Economic Crisis and Labour Law Reform in Italy

Abstract

This article analyses the labour law reforms enacted in Italy in recent years, paying special attention to their ambiguous relations with the economic crisis and EU requirements. Between 2007 and 2013, Italy's GDP contracted by 8.7% and average per capita income fell by around 10 percentage points: from this starting point, significant improvement in terms of the economy and employment is likely to be hard to achieve. This is a matter of concern for the European institutions, giving rise to the need for structural reform of the labour market. The Italian government has been forced to focus on employment protection measures in their legislative action, since extensive action in terms of public funding in favour of employment and income would be untenable due to insufficient budgetary resources and the need to avoid any further expansion of public spending. In this connection, this article focuses on the approval in February 2015 by the centre-left Renzi Government of the decree aimed at further reform of the labour market introducing a new form of open-ended contract with a growing level of economic protection against unfair dismissal, and concludes by examining the implications for job security.