26
Although the right to reinstatement is a hotly debated issue in Italy and very much central to the platform of the social partners, its impact remains unclear in a
labour market where less than 50 per cent of the employees work in companies with more than 15 employees Figure 25 and the percentage of self-employed is more
than one order of magnitude larger than in France and Germany Figure 26a. Most noticeably, workers hired under the
contratto a progetto
introduced in 2003 by the
legge Biagi
as the most flexible, “atypical”, labour contract, are categorized as self- employed even in cases when they have had only one employer for few subsequent
years.
Figure 25 Share of employment by firm size
5 10
15 20
25 30
35 40
45 50
1 9
9 2
1 9
9 3
1 9
9 4
1 9
9 5
1 9
9 6
1 9
9 7
1 9
9 8
1 9
9 9
2 2
1 2
2 2
3 2
4 2
5 2
6 2
7 2
8 2
9 2
1 2
1 1
P e
rc e
n ta
g e
o f
E m
p lo
y e
d
Share of Employment, by Firm Size
Firms with up to 10 employees Firms with 10-20 employees
Firms with more than 20 employees
Data source: EU LFS 1983-2011
27
Figure 26a Self-employment rate
The new legislation introduced by the Monti government and approved by the parliament under the label
Fornero Reform
before the summer 2012 has reduced the likelihood of an automatic reinstatement clause and gives to the judge the option of
choosing between a full reinstatement or a monetary compensation equivalent to 15 month of the dismissed worker. Before the Fornero Reform, the choice was in the
hands of the employee. As of June 2012, the choice will be in the hand of a judge, though in some specific cases the judge has limited choices. The system is certainly
very complex. As we mentioned above, it is still too early to evaluate whether the reform will have any impact, but it is clear that the uncertainty of the dismissal
procedure- particularly serious in the case of Italy where the labour-trials can last more than few years-is still extremely pervasive in the new legislation.
28
4. Labour Market Segmentation and its Implications for Job Quality
The duality of the Italian labour market is apparent as it divides the labour force into two sizeable different groups, defined in terms of job security - measured by the
duration of employment - compensation and likelihood of receiving on-the-job training. This is not a phenomenon limited to Italy: in most EU Member States, the
proportion of young people in employment who are working in temporary jobs is very high, especially among those under 25 years of age where 40 per cent are in this
position. However, this general statistic does not elicit the large cross-country heterogeneity as the share of temporary employment among workers from age 15 to
24 ranges from more than 50 per cent in SI, PL, DE, ES, PT, SE and FR to less than 20 per cent in CZ, CY, SK, UK, MT, LV, BG, LT and RO. This cross-country
heterogeneity has remained somewhat unaffected by the current crisis when we compare 2007 with 2011, as Table 1 shows.
Table 1 Fraction of temporary contracts in percentage of total employees by age before and during crisis time Country
between 15 and 24 between 25 and 49
between 50 and 64 between 15 and 64
2007 2011
2007 2011
2007 2011
2007 2011
Austria
34.9 37.2
4.7 5.6
2.5 2.4
8.9 9.6
Belgium 31.6
34.3 6.9
7.5 4.3
3.8 8.6
8.9
Bulgaria
10.3 8.3
4.5 3.6
5.0 4.3
5.1 4.1
Cyprus 23.3
17.2 14.0
15.6 5.2
6.2 13.3
13.7
Czech Republic 17.4
22.3 5.8
6.9 9.5
6.8 7.8
8.0
Denmark 22.5
22.1 7.4
7.6 4.3
3.5 9.0
8.9
Estonia
13.8 3.4
3.4 2.2
4.5
Finland 42.4
43.4 14.1
14.3 7.6
6.9 15.9
15.5
France
53.5 55.0
12.0 12.3
6.9 7.5
15.0 15.2
Germany 57.4
56.0 9.9
11.0 4.7
4.8 14.7
14.8
Greece 27.0
30.1 10.5
11.5 6.1
7.4 10.9
11.6
Hungary 19.1
22.9 6.8
8.5 4.8
6.5 7.3
8.9
Ireland
20.5 34.2
5.5 7.8
4.6 5.9
8.0 9.9
Italy 42.3
Latvia
9.3 10.7
3.5 5.9
3.2 6.5
4.2 6.5
Lithuania 9.8
9.1 2.9
2.5 2.9
1.9 3.5
2.8
Luxembourg 34.1
34.5 5.6
6.2 3.0
6.8 7.1
Malta 11.0
17.7 3.8
4.3 5.1
6.5
Netherlands
45.1 47.7
14.1 14.5
6.8 6.8
17.9 18.2
Poland 65.7
65.6 25.1
25.1 18.2
17.6 28.2
26.9
Portugal
52.6 57.2
21.1 21.7
10.6 11.0
22.4 22.2
Romania 4.6
5.8 1.4
1.4 0.9
0.8 1.6
1.5
Slovakia
13.7 18.6
3.9 5.7
4.0 5.2
5.0 6.5
Slovenia 68.3
74.5 14.0
14.7 6.7
7.5 18.4
18.0
Spain
62.8 61.4
31.0 26.3
15.3 11.7
31.7 25.4
Sweden 57.1
57.3 14.0
12.3 7.3
6.0 17.2
15.9
UK
13.3 13.5
4.3 4.9
4.3 4.6
5.7 6.0
EU27 41.3
42.5 12.4
12.4 6.9
6.7 14.6
14.0
Source: EUROSTAT
29
In Italy, the upward trend toward temporary contracts has been steady.
Figure 26b shows how the percentage of temporary and fixed term employees has increased from 5 per cent to 14 per cent during the period that started in 1990 and
finished in 2008. In addition, also the number of self-employed remains substantially larger in Italy than in the rest of Europe.
Figure 26b Employees with temporary contracts
2 4
6 8
10 12
14 16
1 9
9 1
9 9
1 1
9 9
2 1
9 9
3
1 9
9 4
1 9
9 5
1 9
9 6
1 9
9 7
1 9
9 8
1 9
9 9
2 2
1 2
2 2
3
2 4
2 5
2 6
2 7
2 8
2 9
2 1
2 1
1
P e
rc e
n ta
g e
o f
E m
p lo
y e
e s
Employees with Temp Contract
Share of employees with temporary contract
Source: EU LFS 1983-2011
These percentages are especially imbalanced across generations. Comparing
the share of temporary workers by age groups Figures 27a, 27b, 27c and 27d between before 2006 and after the crisis 2011, we find that the share of temporary
workers over total employment has increased by more than 20 per cent for workers under 28 years old, by less than 10 per cent for workers from 28 to 37 years old, and
only by less than 5 per cent in the other age classes. This evidence is consistent with the view that, as total number of people employed fell during the period Figure 27e,
while both young and old workers were laid off because of the crisis, some of the young workers were hired back but only as temporary workers while older workers
had seen a much lower chance of being hired back.
