Analysis
‘Increasing protections’ of an ‘epochal reform’ – all failed
Ten years after Matteo Renzi's signature Jobs Act, the lexical fraud of the maneuver is now clear: employment fell and the ‘increasing protections’ promised to workers were in fact for employers.
Ten years of shenanigans and precarity for workers. Ten years of cost savings and more power for businesses. On March 7, 2015, the so-called “contract with increasing protections,” the centerpiece of Matteo Renzi's signature Jobs Act, came into effect. This lexical fraud introduced by Legislative Decree 23 was never admitted by the authors or by those who took advantage of it.
The “increasing protections” in fact did not exist. The difference consisted simply in the fact that those hired on a permanent basis after that date were no longer protected by Article 18 of the Workers’ Statute, which provided for their reinstatement in case of unjustified dismissal. It created an apartheid system for new hires, who worked side by side with colleagues that had more protections than them. At the same time, firing workers became easier and less costly for companies: from that day on, it was enough to pay a small severance compensation without any judicial process. Another aspect of this apartheid system that not many recall is the fact that the “contract with increasing protections” applied only to laborers, office workers and middle management. Upper management were, and are, exempted from the new system and continue to have the same rights as before.
The then-prime minister and secretary of the PD considered it “an era-defining reform” that would sideline the unions that “are still putting coins into the iPhone.” Although he spoke English poorly, Matteo Renzi has always used it far too much: he stole the name of his “reform” from Barack Obama, echoing the Democratic president's 2011 speech. However, the U.S. bill included $450 billion in investments, public works and tax incentives for families and businesses to create jobs, while the Italian version merely took away workers' rights with zero public investment, while businesses would get their reward with the 2015 budget law: about $14 billion for making fixed-term contracts permanent, which mostly didn’t happen.
Pietro Ichino (the ideologue behind the reform) called it a “stable-flexible contract” – a blatant oxymoron. All to the benefit of businesses, which were made able to dismiss their employees freely even on permanent contracts. It was the triumph of the so-called “cost of dismissal”: any company knew at any time how much it would have to pay to get rid of a worker they didn’t like. In short, as Professor Natalia Paci summarized, the “increasing protections” were in fact “for employers.”
The “era-defining reform” of the Jobs Act (which started with the Poletti decree that made precarious contracts much easier to use) soon turned out to be a failure: from January to October 2015, the share of permanent employment fell from 86.4 percent to 85.4 percent, while that of fixed-term employment rose from 13.6 percent to 14.6 percent. Businesses didn’t even take advantage of the gift of the “increasing protections” contract.
Then, 2018 saw many different developments: the referendums proposed by the CGIL union, led by Susanna Camusso, aimed at restoring (and enlarging) Article 18 were rejected by the Constitutional Court led by Giuliano Amato, in a tight vote and not without internal controversy. But on Sept. 26, the same Constitutional Court dismantled the foundation of the “increasing protections” contract by ruling that the criterion for determining the severance pay was “illegitimate”: “The provision of an increasing severance pay based solely on the worker's length of service is contrary to the principles of reasonableness and equality and is in conflict with Articles 4 and 35 of the Constitution,” which refer to “working conditions” and the “professional path.”
The “Dignity Decree” of the M5S-Lega Conte I government, signed by Luigi Di Maio, decided to increase the severance payments. But not to restore Article 18, despite a bill by the Italian Left. As many as four other rulings (on a law with only 11 articles) have ruled that the “increasing protections” contracts are unconstitutional. The last two rulings in 2024 (numbers 128 and 129) also found unconstitutional the provision (Article 3, par. 1) that excludes reinstatement for dismissal even where the latter is without objective justification and without just cause. Now, CGIL under Maurizio Landini is trying again. The first of the five upcoming referendums concerns precisely the provision of Renzi’s Jobs Act: “Do you wish to repeal Legislative Decree No. 23 of March 4, 2015, on ‘Provisions on the matter of an indefinite-term employment contract with increasing protections, implementing Law No. 183 of December 10, 2014’ in its entirety?”
A Yes vote would restore Article 18 of the Workers' Statute, in the Fornero version, for all workers in companies with over 15 employees: reinstatement in the most serious cases of wrongful dismissal. The second referendum question is also related to the infamous ”increasing protections,” concerning dismissals in companies below 15 employees, and proposing that a judge should decide, whereas now severance pay is the only option. It will be a momentous challenge to get a majority of eligible voters (about 26 million Italians) to the polls. But for a few months, the whole country will be back to discussing workers' rights. And that is already a breakthrough.
Originally published at https://ilmanifesto.it/tutele-crescenti-riforma-epocale-ormai-fallita on 2025-03-11