The « dignity » decree : a first step towards revising the italian Jobs act

O n Saturday 14 July the new Italian government enacted its first significant legislative act. By passing a decree-law called "dignity", the m inister of labour Luigi di Maio started the revision of the Renzi government’s emblematic Jobs Act , following up on his election campaign promise . The decree aims at tightening the conditions for companies’ use of temporary employment contracts, but also includes other elements that could reintroduce rigidities in the Italian labour market . Indeed, the legislation also imposes financial penalties for Italian companies that relocate production after receiving government aid. T he text will most certainly be modified during its review in parliament before being officially converted into law (before 12 September) , as , for the time being , it does not clearly identify which of companies ’ activities will be penalised in the event of relocation and also does not specify which government aid is concerned. More than four years after the first reform of the Jobs Act , there is evidence that some of the newly created temporary contra cts have simply been previous permanent contracts . That said, it is also the case that total employment in Italy is still rising as there are more t emporary jobs created than permanent ones lost . The main purpose of the "dignity" decree is to rebalance th ese developments i n the labour market . However , we do not believe that repealing the Renzi government’s reforms without introducing incentives to hire on permanent contract s is the right solution.