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Covid-19 coronavirus: The “Ristori Decree”: extension of the measures about dismissals and furlough plans in Italy

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Livio Bossotto

Partner

Milan

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Chiarella Claudio
Claudio Chiarella

Employment Senior Associate

Milan

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Valentina Barbanti

PSL Counsel

Rome

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04 November 2020

On 28 October 2020, the “Ristori Decree” (Law Decree 28 October 2020, n. 137) was published on the Official Gazette of the Italian Republic (Gazzetta Ufficiale): the “Ristori Decree” concerns urgent measures related to the Covid-19 outbreak and aimed at supporting those economic activities restricted by the Decree of the President of the Council of Ministers (the “D.P.C.M.”) adopted on 24 October 2020.

Among the main measures introduced by the Law Decree, it is worth mentioning:

Dismissals ban extension: the “Ristori Decree” extends until 31 January 2021 the collective redundancies ban, as well as it extends the dismissals ban for objective reasons originally introduced by the “Cure Italy Decree” (Law Decree 17 March 2020, n. 18) and extended by the “Relaunch Decree” (Law Decree 19 May 2020, n. 34), and by the “August Decree” (Law Decree 14 August 2020, n. 104) until 31 December 2020. The “Ristori Decree” refers again to the dismissals ban exceptions, already provided for by the “August Decree”:

  1. dismissals related to the definitive termination of business activity with liquidation of the company;
  2. dismissals related to company collective agreements providing for the termination of the employment relationships upon the payment of an incentive to leave: in this case, workers have to agree to such agreements; and
  3. dismissals related to the bankruptcy of the company and without a temporary exercise of the activity, or in case of suspension of business activity.

Ordinary furlough plan: similar to the abovementioned law decrees, the “Ristori Decree” provides for the possibility for employers to apply for the Covid-19 related ordinary furlough plan for a maximum term of six weeks between 16 November 2020 and 31 January 2021. This plan is guaranteed to those employers who have already benefitted from the nine weeks Covid-19 related plans provided for by the “August Decree” and to those employers whose economic activities have been restricted by the D.P.C.M. adopted on 24 October 2020. Employers that intend to apply to the aforementioned plan have to pay an additional contribution in the amount of:

  1. 9% of the employee’s global wage for working hours not performed because of the restriction of the working activity, if the turnover reduction is lower than twenty per cent in relation to 2019; and
  2. 18% of the employee’s global wage for those working hours not performed because of the restriction of the working activity, if there is no turnover reduction for the employer.

The additional contribution is not applied to those employers subjected to a turnover reduction equivalent to or higher than 20%, to employers who began exercising the business activity after 1 January 2019, and to those employers whose economic activities have been restricted by the 24 October 2020 D.P.C.M.

Exemptions from social contributions payments: it is also renewed – for additional four weeks – the possibility for employers (with the exception of those in the agricultural sector) to be exempted from the payment of social security contributions available until 31 January 2021 if they do not take advantage of the ordinary furlough plan provided for by the “Ristori Decree” and within the boundaries of the plan that they benefitted from in June 2020.

Measures for restricted economic activities: lastly, the “Ristori Decree” disciplines the suspension of November 2020 social security contribution and insurance premium payments for those employers with the headquarter in Italy and whose economic activities have been restricted by the 24 October 2020 D.P.C.M. until 24 November 2020, such as employers operating in the context of restaurants, swimming pools, gyms, stadiums and hotels. The total amount of contributions must be paid by the employer without the imposition of any fines or interests by 16 March 2021. Alternatively, employers may apply for the four months instalment plan: in this case, the first payment must be made by 16 March 2021.

In this respect, please note that, after having approved such measures, on Friday October 30th the Government has announced that the ban of dismissal and Covid-19 related ordinary furlough plan – at today in place until the end of January 2021 - will be likely further extended until 21 March 2021, in line of the forecast about the pandemic situation.

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