Italy's Renzi wins confidence vote on labor decree

ROME Wed May 7, 2014 11:26am EDT

Italian Prime Minister Matteo Renzi gestures as he leaves Chigi palace after a meeting with U.N. Secretary General Ban Ki-moon in Rome May 7, 2014. REUTERS/Remo Casilli

Italian Prime Minister Matteo Renzi gestures as he leaves Chigi palace after a meeting with U.N. Secretary General Ban Ki-moon in Rome May 7, 2014.

Credit: Reuters/Remo Casilli

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ROME (Reuters) - Italian Prime Minister Matteo Renzi easily won a confidence vote on Wednesday over his plans to ease rules for companies that hire temporary workers, part of a broader plan to overhaul labor regulations.

The Senate voted 158 to 122 to back Renzi, the 39-year-old former mayor of Florence who took power in February from party rival Enrico Letta.

The confidence vote allows the government to accelerate the passage of the decree that must be approved by the lower house by May 19 to become law.

It will allow businesses to renew temporary contracts for up to 36 months without citing their motives. Currently, companies have to justify each extension beyond 12 months, a law designed to protect permanent contracts.

Because of pressure from a center-right coalition ally, the measure was amended to permit businesses that exceed a limit on temporary contracts to 20 percent of the total workforce to pay a fine rather than hire more permanent employees.

The measure is part of a broader revision to labor rules - called the Jobs Act - that Renzi is putting together as unemployment soars to nearly 13 percent, its highest since the 1970s, after more than two years of recession.

Confidence votes are often used in Italy as a way of truncating debate and hastening the passage of legislation. If the government loses such a vote it is obliged to resign.

The labor measure is one of a series of reforms the media-savvy and popular Renzi is pushing, including tax cuts for 10 million low earners, ahead of elections for the European Parliament on May 25.

(Reporting by Francesca Piscioneri; Writing by Steve Scherer; Editing by Robin Pomeroy)

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