by Stefania Fumo

ROME, July 2 (Xinhua) -- Italy's rightwing and populist government on Monday issued a so-called "dignity decree" to increase worker protections and to crack down on companies that move their plants abroad.

The measure increases existing limits on temporary contracts, which provide fewer protections for workers. As of May 2018 at least 3 million people had temporary work contracts and almost 15 million had permanent contracts, official statistics agency ISTAT said in its latest report on Monday. Another 3 million, or 10.7 percent of the labor force, were out of a job, ISTAT said.

"This is the Waterloo of job insecurity," Labor and Industry Minister Luigi Di Maio, who leads the populist Five Star Movement, said in a Facebook video after the cabinet meeting, referring to the battle that marked Napoleon's final defeat in the early 1800s.

"We placed limits on the abuse of temporary contracts, and we increased penalties for unfair job dismissals," said Di Maio, who also serves as deputy prime minister.

This measure was applauded by Tania Scacchetti from CGIL trade union.

"While it is true that permanent contracts still far outnumber temporary ones, it is also true that the explosion of temporary contracts has been the leitmotiv of the past few years," Scacchetti told Sky TG24 private broadcaster.

"Employment has increased, but it is of lesser quality and also lesser quantity in terms of hours worked," she said.

The new measure did not make everyone happy. Changing the rules on temporary contracts is "a step backward" and may have "significant economic impact on businesses (and) negative fallout on employment," small and medium enterprises (SME) association Confesercenti said in a statement.

"It would be a hard blow to bear especially in the tourism and services sector, because the measure arrives when the summer season has already begun and will affect current contracts," explained Confesercenti, which according to its website represents 350,000 SMEs that employ over one million people.

The decree also introduces stiff penalties for domestic companies that benefit from state incentives and then relocate abroad, leaving Italian workers stranded, Di Maio said.

According to a study by CGIA think tank, the number of Italian companies operating abroad rose by 12.7 percent in 2009-2015, when almost 36,000 businesses had joint ventures and manufacturing activities in other countries. The number one destination for these Italian investments was the United States, followed by France, Romania, Spain, Germany, the UK, and China, according to CGIA.

The decree, which has not yet been made public and which will have to be signed by Italian President Sergio Mattarella before it can become law, also contains a ban on gambling advertising, Di Maio said in his video.