LEGISLATIVE UPDATE | Law no. 85/2023 implementing the “Labour Decree”
By August 2023, employers are expected to implement the fixed-term changes confirmed by Law no. 85/2023, which converted the so-called “Labour Decree” (Decree-Law no. 48/2023).
The reform allows collective agreements and, temporarily, individual parties to identify reasons supporting contracts beyond the initial “causale-free” period, within the statutory duration limits. Replacement needs remained a recognised ground.
International businesses may use a fixed term as a substitute for probation or because the Italian operation is new. Neither assumption automatically supplies a lawful temporary reason after twelve months, and repeated renewals add procedural risk.
The contract should state the genuine temporary need with enough factual precision and HR should monitor extensions, renewals and aggregate duration. If the role is structurally permanent, indefinite employment with a valid probation clause is usually cleaner.