Italy’s Renzi Wins Senate’s Backing for Labor Reforms

The reformist prime minister clears one parliamentary hurdle but must make haste to liberalize his nation’s jobs market.

French president François Hollande speaks with Italian prime minister Matteo Renzi in Paris, March 15, 2014
French president François Hollande speaks with Italian prime minister Matteo Renzi in Paris, March 15, 2014 (Palazzo Chigi)

Italian prime minister Matteo Renzi has won the support of the Senate for labor reforms, clearing the first parliamentary hurdle in a months-long process to liberalize the country’s morose jobs market.

After a marathon Senate session in Rome, all of Renzi’s Democrats voted for reform, although close to three dozen had said they were principally opposed to the changes.

“We were not elected to erode [workers’] rights,” argued one lawmaker, Walter Tocci.

Renzi’s labor minister, Giuliano Poletti, said the reforms would “reduce precariousness for workers and give certainty to business” by abolishing strict labor laws as well as temporary work contracts that the center-left government believes are too often abused.

What is fair?

At the heart of the debate is a stipulation in the Italian labor code that allows judges to reinstate workers who have been “unfairly” dismissed from companies with fifteen or more employees.

The law does not define what constitutes a “fair” dismissal, leading judges to typically find in employees’ favor.

For trade unions and many on the left, the law is an “untouchable symbol of worker rights,” wrote La Repubblica‘s Kay Wallace last month. Employers see it as a serious impediment to business growth.

Giorgio Squinzi, head of Italy’s business federation, argues it leads to the perception that “in Italy when you hire someone it is for life.”

No time to waste

The reforms now go to the lower chamber for a vote.

There is little time to waste. Unemployment in the eurozone’s third largest economy has exceeded 12 percent. Nearly one in two Italians under the age of 25 is out of work.

Older Italians tend to have secure contracts that are almost impossible to break while many young Italians can only get temporary jobs that offer no employment rights or protection.

Many professions, such as lawyers, notaries, pharmacists and taxi drivers, are also notoriously difficult for newcomers to enter, making it even harder for youngsters to start a career.

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