Italy court rejects labour law referendum

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Italy's constitutional court today rejected a petition calling for a referendum on a key plank of labour market legislation that was a flagship reform of ousted premier Matteo Renzi.

The court rejected a trade union-sponsored petition calling for a vote to repeal the key provision of a law known as the Jobs Act, which made it easier for companies to hire and fire employees.

The Jobs Act, made up of a package of reforms adopted in 2014-15, was seen as the most significant measure adopted under Renzi, who quit after losing a December referendum on unrelated constitutional questions.

The court upheld the unions request for referendums on two other elements of Renzi's labour market reforms - a voucher system for paying some employees payroll taxes and new rules on public sector tenders.

But as these are already subject to review, a referendum on them is not certain to take place.

Had the court accepted the petitition for a referendum on Article 18, which was signed by 3.3 million people, the vote would have taken place between April and June.

Political observers said that could have prompted the current centre-left government to go to the polls as early as March to avoid the risk of having to fight an election in the aftermath of another referendum setback.

Today's decision will also be seen as a boost for Renzi's chances of a comeback. He wants to lead his Democratic Party into the election but that would have been politically impossible if a reform he had championed had been rejected by voters.

Renzi and his allies say the Jobs Act has introduced long overdue flexibility into the Italian labour market and claim it is already fostering job creation. Its critics say it has diluted workers' rights with no sign of it generating new jobs.