COVID-19: first labour market support measures

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Prepared by Francesca Tironi, Giulia Spalazzi and Valentina Panettella

The President of the Council of Ministers, during the night, signed the Prime Ministerial Decree of 9 March 2020 (“Decree”) providing for new measures to contain and contrast the spread of the Covid-19 virus throughout Italy.

The Decree, which became necessary in order to deal with and reduce the spread of the virus as well as to support the economy of the entire Italian Republic, extends to the entire national territory the measures provided for by Article 1 of the Prime Ministerial Decree dated March 8th 2020 (for further information: ).

The Decree establishes the prohibition of any form of crowding of individuals in public/open to the public places and, therefore, amends letter d) of Article 1 of the Prime Ministerial Decree dated March 8th 2020 concerning sporting events and exhibitions.

As a result, sporting events and competitions of all kinds and disciplines are suspended in public or private places.

The Decree takes effect on March 10th 2020 and shall be effective until 3 April 2020. The measures referred to in Articles 2 and 3 of the Prime Ministerial Decree dated March 8th 2020 shall cease to have effect if they are incompatible with the provision of Article 1 herein.

What happens with regard to labor market support measures?

Based on the Decree, there is some uncertainty as to the possible extension, to the entire national territory, of the measures to support the labor market provided for by Law Decree no. 9/20 and the Prime Ministerial Decree of  March 8th 2020,

such as, for example, the redundancy fund in derogation, especially in view of the limitations to the exercise of numerous companies and work activities throughout the country.

As far as the redundancy fund in derogation, provided for by art. 17 of Law Decree no. 9/2020 of among the urgent measures aimed at supporting workers and businesses, to date, regional definition agreements are in progress for its use by way of derogation and for regulating the procedures for the submission of the relevant applications.

On March 6th, 2020, in fact, the Emilia Romagna Region signed the Agreement between the Region, trade unions and trade associations that signed the Pact for Labor. Under this agreement, 38 Million of euros have been made available in Emilia Romagna, and it has been provided that the redundancy fund in derogation will start retroactively from 23 February and will last for one month.

The same can be accessed by way of derogation by private sector employers and production or operating units located in Emilia-Romagna, for the benefit of employees whose employment relationship has been suspended in whole or in part or whose working hours have been reduced due to the negative economic effects resulting from the orders.

Employers are entitled to access said benefit, however, only if they cannot actually benefit from the ordinary shock absorbers as per Legislative Decree no. 145/15 (CIGO, CIGS, FIS and FONDI DI SOLIDARIETA’ BILATERALE), as well as from the various shock absorbers in derogation as per art. 17 of Legislative Decree no. 9/2020, since they have already benefited from them within the maximum limits provided for by law.

In order to be eligible, workers must be employed on 23/2/2020; at the same time, are eligible employees hired by employers having access to “ordinary” shock absorbers, but who, however, do not meet the subjective requirements for access to them (such as a company seniority of less than 90 days).

Moreover, just a few hours ago the Lombardy Region acquired the green light, also from the Social Partners, for the implementation of the redundancy fund/redundancy fund in derogation in favor of Lombardy companies. The measure will be activated with retroactive effect and with an allocation of 135 million euros.