Premier Matteo Renzi said his government has completed a "Copernican revolution" on Wednesday, when an enacting decree to its Jobs Act labour reform was approved at a cabinet meeting. The controversial Jobs Act was approved in parliament this month, although the bill delegated the government the job of filling in the details with enacting decrees.
The bill passed despite in parliament staunch resistance from several opposition parties and a minority within Renzi's own centre-left Democratic Party (PD).
"It (the reform) gives more protection to those who need it and more freedom to those who want to invest," Renzi told a news conference after a three-hour Christmas Eve cabinet meeting.
The reform has also raised high-voltage protests from two of Italy's three big trade-union confederations, the CGIL and UIL, which staged a general strike against it and the government's 2015 budget law on December 12.
The enacting decree gives gradually rising levels of labour protection to people hired on open-ended permanent contracts.
The aim is to replace a plethora of temporary and other low-paying, no-benefits contracts that have proliferated in Italy in recent years, meaning a regular full time job is increasingly hard to find.
The main bone of contention with the union is the change Article 18 of the 1970 Workers Statute, which protects people from unfair dismissal, for newly hired workers.
If a labour tribunal finds that a firm with over 15 employees did not have just cause to dismiss a worker, in most cases it will now be ordered to pay compensation rather than reinstate the staff member.
The exception would be in cases of discrimination or dismissals made on the basis of groundless disciplinary complaints.
Renzi said the labour law, a key part of his ambitious reform programme, will encourage firms to hire new staff and help combat unemployment, which has reached a record high of over 13% in recession-battered Italy.
But CGIL and UIL say it will undermine a fundamental labour right by softening protections against unfair dismissal.
The New Centre Right (NCD) party, a junior partner in Renzi's coalition government, on the other hand, says the reform does not go far enough in giving more freedom to firms to hire and fire.
The NCD had reportedly been demanding that the enacting decree feature an opt-out for employers that would enable them to give large compensation in the case of unfair dismissal rather than have to rehire the sacked worker. But decree approved by cabinet did not include this opt-out, with Renzi saying the executive would have gone beyond the original remit given to it by parliament had it done so.
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