In Italy, the temporary freeze on layoffs is due to expire at the end of June for the biggest companies while small and medium-sized firms have until the end of October. The freeze, which is unique in Europe, saved thousands of jobs after the pandemic plunged Italy into deep recession.

Companies were first banned from sacking workers in February 2020, when the initial wave of Covid-19 cases sparked Europe's first nationwide lockdown in Italy. The measure was later extended in August to continue supporting all businesses and workers economically harmed by the pandemic. When Marco Draghi replaced the former Prime Minister Giuseppe Conte in February this year, he said the government ‘should protect workers... but it would be a mistake to protect all economic activities equally’.

But the imminent end of the layoff ban is causing tensions in Mario Draghi's national unity government. On one side, the Five Star Movement, the biggest party in parliament, is calling for a further extension for everyone. On the other, far-right League leader Matteo Salvini wants companies to take back the ‘freedom to hire’. Labour Minister Andrea Orlando, from the centre-left Democratic Party (PD), initially raised the possibility of an extension to August subject to certain conditions, before backtracking under pressure from employers. Giancarlo Giorgetti, the minister for economic development and member of the League, has instead proposed extending the freeze for the hardest-hit sectors, such as textiles.

The fear is that Italy could face a wave of redundancies when the ban ends. Trade unions warn about a ‘social tsunami’ amounting to ‘a million more unemployed’ if the measure is not extended for everyone. Head of the Adapt Foundation Francesco Seghezzi, specialized in research on employment, provide a more conservative estimate of between 70.000 to 100.000 ‘which is certainly not negligible, but is not enormous’, he said.

Earlier this month, the European Commission called the layoff-ban ‘ineffective’ and even potentially ‘counterproductive’ as it mainly protects ‘those with permanent contracts, to the detriment of temporary or seasonal ones’, notably women and young people. The Commission asserted that the effects of the pandemic on employment have been less severe in countries that instead offered financial support for people whose hours were cut by struggling companies, such as in France and Germany. Italian trade unions reacted furiously to the European Commission’s position. The EU ‘does not know the reality of our country – we risk an avalanche of layoffs’, said the secretary of CISL union Luigi Sbarra.

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