November 25, 2014 / 6:29 PM / 3 years ago

Italy's Renzi clears hurdle in parliament on labor law

ROME (Reuters) - Italy’s lower house of parliament voted on Tuesday to pass Prime Minister Matteo Renzi’s Jobs Act, clearing the way for final approval in the Senate next month of a law aimed at making hiring and firing rules simpler.

Italy's Prime Minister Matteo Renzi speaks during a meeting on the sidelines at a Europe-Asia summit (ASEM) in Milan October 17, 2014. REUTERS/Alessandro Garofalo

The labor bill, fiercely resisted by unions and some parts of Renzi’s center-left Democratic Party (PD), is a central part of a broader reform program the 39-year-old premier has promised in an effort to revive Italy’s stagnant economy.

The 630-member lower house voted by 316 for and six against to pass the bill, but around 40 PD deputies and most of the opposition left the chamber in protest against the reform.

The labor reform will weaken some of the barriers which make it hard for large employers to lay off staff in Italy, creating a new system which offers rising levels of protection with increasing length of service.

The complexities of the Italian legislative system mean many details of the reform have still not been decided, leaving it unclear what the final effect for employers and workers will actually be.

The bill passed on Tuesday was a so-called delegating law, which gives the government the power to make new legislation. The specifics of how the law will work will not become clear until approval of further decrees to bring it into effect.

STRIKE

Renzi hopes the new law will encourage employers to invest in new jobs, but dissidents in Renzi’s own party and the PD’s traditional allies in the unions are incensed at what they see as an attack on workers’ rights.

Two of Italy’s biggest unions have called a one-day nationwide strike to protest Renzi’s labor and economic polices for Dec. 12.

Most of the opposition has centered on Article 18 of the workers’ statute, which offers workers in companies with more than 15 employees the right to go to court to try to win their jobs back in cases of wrongful dismissal.

Renzi says the old rules, which only apply to employees on full contracts, discriminate against the growing number of workers on short-term contracts that offer virtually no protection.

The measures going through parliament would allow workers laid off for business reasons a financial payoff but no right to reinstatement.

They would keep provisions that allow courts to order a company to reinstate workers ruled to have been dismissed wrongfully for certain disciplinary reasons.

Writing by James Mackenzie; editing by Andrew Roche

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