Employment 2024 Comparisons

The main distinction between blue-collar and white-collar workers is as follows:

• Blue-collar workers (operai) collaborate with the employer by performing tasks that are primarily related to the company’s production process. Examples include factory workers and manual laborers.
• White-collar workers perform organisational/administrative functions (eg, office employees, clerks).

Article 2095 of the Italian Civil Code introduces two additional categories of employees:

• Quadri: This category is intermediate between “dirigenti” (executives) and “impiegati” (middle managers). They consistently perform functions of significant importance for the growth of the company and the achievement of its targets.
• Dirigenti: This represents the highest category of employee. As defined by collective agreements, they possess a high degree of professionalism, autonomy and decision-making authority. Their activities are directed towards promoting, co-ordinating and managing the achievement of the company’s targets.

The standard employment contract form in Italy is the open-ended or permanent contract. However, Italian legislation allows employers to enter into fixed-term agreements under certain conditions.

According to Articles 19–29 of Legislative Decree No 81 of 15 June 2015, as amended by Law Decree No 87 of 12 July 2018, a fixed-term contract can be freely executed (ie, without any specific reason) only if the duration does not exceed 12 months. For contracts exceeding 12 months (in any case, up to a maximum of 24 months), at least one of the following must apply: (i) conditions established by national/territorial/company-level collective bargaining agreements; (ii) in the absence of the provisions referred to in (i), and in any case only for contracts executed not later than 31 December 2024, technical, organisational or productive reasons identified by the employer; or (iii) reasons related to the replacement of other employees.

The main rules of the fixed-term contract can be summarised as follows:

• The original term can be extended up to four times within the 24-month maximum duration.
• The number of employees employed through fixed-term contracts cannot exceed 20% of the number of employees hired under a permanent contract as of 1 January of each year. Failure to comply with this provision entails the payment of a fine, but the fixed-term agreements remain valid.
• The duration of an employment contract can be validly fixed only if the contract itself is stipulated in written form. Otherwise, the clause regarding the fixed-term of employment is null and void, and the relationship is considered to be for an indefinite period of time.

As for the contracts’ formal requirements, as a general rule, there is no obligation for the employment contract to be in writing. However, written form is required for the validity of certain contracts or covenants (eg, fixed-term employment contracts, non-competition agreements or probationary period clauses) or in relation to the burden of proof (such as in agreements with temporary employees).

Legislative Decree No 104/2022 (Decreto Trasparenza), which implements EU Directive 2019/1152, and aims to ensure “transparent and predictable working conditions for employees in Member States”, came into force in August 2022. The decree regulates employees’ right to information on the essential elements of the employment relationship, working conditions and related protection.

According to the said decree, the employer must provide the employee with information in writing at the date of hiring or at least within seven days after the commencement of the employment relationship, including, but not limited to:

• the identity of the parties;
• the place of work;
• the registered office or domicile of the employer;
• the date of commencement of employment;
• the initial remuneration and the items that compose it with details of the timing and method of payment;
• the employee’s contractual category;
• level and job title;
• the specific type of contract (eg, fixed-term), and its duration; and
• the scheduling of normal working hours and any conditions relating to overtime work and its remuneration, etc.

Please note that certain information – ie, the right to receive training provided by the employer, if any; the procedure, form and terms of notice in the event of termination by the employer or employee – may be provided within one month of the commencement of work. It is also permissible to refer to the National Collective Bargaining Agreement (CBA) governing the employment relationship or to other relevant company documents that are routinely delivered or made available to employees, for more detailed information on these matters.

Working time is regulated by Legislative Decree No 66/2003 and by the CBA applied by the employer as well as by collective agreements entered into at local/company level, if any.

Said decree provides that:

• normal working hours are 40 per week;
• collective agreements may establish shorter normal working hours and define them based on an average over a period not exceeding 12 months; and
• the average working hours cannot in any case exceed 48 hours, including overtime, in each period of seven days, and they are calculated over a period of four months; however, the decree also states that collective agreements can raise said limit up to six months, or twelve months in case of objective or technical reasons, or reasons inherent to the organisation of work, specified in the collective agreements.

Italian law provides working hours restrictions for certain categories of employees. For example, pregnant employees and those with children under one year old cannot work between midnight and 6 a.m.

All work in excess of forty hours per week is considered overtime.

Article 5 of Legislative Decree No 66/2003 provides that the use of overtime must be limited, and usually, it is voluntary. Collective agreements typically provide the conditions for performing overtime work. If collective agreements do not cover when overtime can be required, it is allowed only with the consent of the employee and for a maximum of 250 hours per year.

Finally, overtime is calculated separately. Any increased salary for overtime is typically specified in the collective agreements; alternatively, the agreements may entitle the workers to take additional leave in lieu of increased salary.

According to Section 36 of the Italian Constitution, an employee is entitled to be paid in accordance with the quality and quantity of work performed, and payment must be sufficient to guarantee to the employee and his/her family a free and dignified existence.

There is no national legislation that establishes a minimum wage, which is determined by the CBAs for each category of employee.

Even if there is no CBA applicable to the company, an employee can still commence a lawsuit to challenge the sufficiency of wages paid. According to Section 2099 of the Italian Civil Code, the judge can determine the fair wage by reference to the salary level provided by the CBAs commonly applied in the sector of the company’s business or in similar sectors.

An employer and employee, within the individual employment contract, may agree to salary differences which in any case cannot be less than the minimum indicated by the CBA applied to the employment relationship.

The part of pay exceeding the minimum wage or base salary is called the “super minimum”.

An additional fixed item of remuneration, named the annual 13th monthly salary, is paid once a year on the occasion of the Christmas holidays. It usually corresponds to one month’s remuneration. In addition, CBAs or even individual agreements may establish a further payment of a 14th instalment, usually paid in June.

Salary incentives may be agreed in individual employment contracts or in a collective bargaining agreement. They are typically based on individual and/or company performance, and subject to the rules of the agreed scheme.

Certain employees, especially those at management level, usually receive additional benefits, the most common of which are a company car, mobile phone and laptop, which may be used for either mixed use (ie, business and personal) or exclusively for business purposes.

Fringe benefits – whose value changes according to their nature – are a form of payment in kind, and they are subject to tax, social security contributions and insurance contributions. The relevant amounts and procedures vary according to the benefit.

Finally, adjustments to compensation, such as salary increases, are typically negotiated at the national level through collective bargaining between trade unions and employer associations.

Article 36 of the Italian Constitution and Article 2109 of the Italian Civil Code provide for employees’ right to annual paid vacation. The employee cannot waive this right.

The minimum length of paid vacation is four weeks per year, but the applicable CBA may provide for a longer period.

The four-week period can be used for almost two consecutive weeks at the employee’s request, and the other two weeks (or the remaining higher period provided by the applicable CBA) have to be used within the eighteen months starting from the end of the accrued year. For example, vacation accrued but not used in 2024 has to be used by 30 June 2026.

Employees are also entitled to eleven days off as public holidays. Almost all the CBAs provide for a supplementary holiday – patron saint days.

An employee is entitled to leave in the following cases:

• Sickness leave: An employee is entitled to keep his/her job position for a certain period of time that changes accordingly to each collective agreement, and lasts almost 180 days in the space of one year (the “periodo di comporto”). This period is a suspension of the employee’s contractual obligation to carry out his/her working activity, during which the employee is entitled to receive their full salary. A portion of the salary is paid by the National Institute for Social Security (Istituto Nazionale Previdenza Sociale, INPS), and the applicable CBA may require the employer to pay the remaining portion. The CBAs provide the length of such period and the rate of salary to be paid. They may also require that the protected period be included in calculations of length of service for seniority and social security purposes. With regard to executives, sick leave payments are fully borne by the employer. In cases where no CBA applies to the employment relationship, Article 2110 of the Italian Civil Code states that the length of such period is determined with equity.
• Maternity leave: Mothers are entitled to a paid leave of five months (normally two months before and three months after the child’s birth), during which employees have the right to an indemnity from the INPS equal to 80% of their salary; however, almost all CBAs provide the obligation for the employer to pay the remaining 20%.
• Paternity leave: Fathers are entitled to a paid leave of ten days, continuous or otherwise (20 days in case of a multiple birth). During maternity leave, the working father can take compulsory leave as an alternative to the mother in the following situations: (i) if she does not benefit from it; (ii) if she dies or she is affected by a serious illness; (iii) if she abandons the newborn baby; or (iv) if the father has exclusive custody of the newborn baby. During this period, which is called alternative paternity leave,  the father receives an indemnity as the mother would.

• Parental leave: Each parent, during the child’s first twelve years of life, is entitled to parental leave. The total combined leave available to both parents is limited to ten months, except where the father takes at least three months of leave, whether continuously or in segments. In such cases, the total leave available increases to eleven months. The right to parental leave applies to:
1. mothers, after maternity leave, for a maximum period of six months;
2. fathers, from the birth of their child, for a maximum period of six months, extendable to seven months if at least three months of leave is taken, whether continuously or in segments;
3. single parents, for a maximum period of ten months; and
4. adoptive parents, within twelve years from the date of adoption, provided it is before the child turns 18 (during this period, until the child reaches the age of twelve, both parents are entitled to receive an indemnity equal to 30% of their salary for a total of three months each; additionally, until the child turns six, this indemnity may be increased to 80% for one month, to be taken by either parent, while a further three months, shared between the parents, may be taken with the 30% indemnity).
• Marriage: Any employee, except during the trial period, is entitled to special paid leave if they get married. White-collar employees receive fifteen days, while blue-collar employees receive eight days. Almost all the CBAs provide for fifteen days of paid vacation.
• Disability: Disabled employees or those assisting disabled relatives are entitled to three days of paid leave per month.

Other situations granting leave include medical leave (eg, for drug addiction treatment or blood donation), political office, personal reasons, and study/training leave.

Pursuant to Section 2105 of the Italian Civil Code, “an employee cannot engage in business, either for his/her own account or for third parties in competition with his/her employer, or divulge information pertaining to the organisation and methods of production of the enterprise, or use it in such a manner as may be prejudicial to the enterprise”. This provision establishes a “duty of loyalty” effective as long as the employment relationship exists. According to case law, this duty of loyalty prevents the employee from disclosing or communicating to a third party any confidential information or trade secrets relating to the business of the enterprise which may have come to his/her knowledge during the employment relationship. Therefore, the confidentiality obligation automatically follows the employment relationship, and it is not necessary to insert a specific clause which provides such an obligation in the employment contract or in subsequent agreements. Disciplinary sanctions (including dismissal) may be applied if the above duties are violated.

In addition, an employer may be able to obtain some relief against an employee who has improperly disclosed or used his employer’s or ex-employer’s confidential information or trade secrets. Such activity by the employee might be considered a criminal offence under Section 623 of the Italian Criminal Code.

Furthermore, the behaviour of the employee after the termination might be considered to be “unfair competition” pursuant to Section 2598 of the Italian Civil Code (eg, an employee setting up a new company using the confidential information obtained through its previous employer). In this case, the employer can ask the court to issue an injunction to stop the activity in competition.

In addition, an unlawful act or a breach of duties might entail the employee’s liability for damages caused to the employer. In this case the employer should prove the damages, the breach of duties as well as the fact that the damage is connected to that breach.

According to Section 2125 of the Italian Civil Code, the post-employment non-compete covenants may be deemed valid and enforceable only if they:

• are specified in writing;
• set forth a specific consideration in favour of the employee;
• have a limited scope and geographical extent; and
• have a specific duration, that shall not exceed three years (five years for “dirigenti”).

That said, parties rarely enter into non-compete agreements for such a long period of time, partly because this can lead to enforceability issues. Therefore, the duration normally agreed is between six months and one year from the termination of the employment relationship.

In order to assess the validity of a non-competition covenant, it is necessary to ascertain whether the combination of its terms and conditions, scope and reach unduly restricts the employee’s ability to secure alternative employment or infringes upon their right to maintain their professional skills.

Case law indicates that the following conditions need to be considered when making such an evaluation:

• the content of the covenant (particularly with regard to the scope and geographical reach, to be assessed jointly); and
• the skills and experience of the employee.

The assessment must also take into account the amount of consideration paid to the employee for his/her non-competition obligations.

The law does not prescribe a specific amount for this consideration; however, case law requires that the compensation be “congruous” with the restrictions placed on the employee in terms of their right to maintain their professional skills and their ability to work. Therefore the compensation has to be evaluated on a case-by-case basis in light of the other terms agreed (ie, duration, scope, geographical reach and the skills and experience of the employee). From a practical perspective, the compensation should be in the range of 20%-30% (or more) of the monthly salary received by the employee for each month of duration of the obligation.

Non-compete clauses are enforceable provided that the requirements indicated above are met.

The enforceability of the clause does not depend on the reason for termination of employment. In fact, unless it is specified otherwise, it applies to all types of termination, including dismissal for “just cause” (ie, gross misconduct).

There is no legal regulation of non-solicitation of employee restraints. Therefore, it is crucial that such restraints are clearly drafted and explicitly define which employees fall within their scope.

Given the absence of any legal regulation on non-solicitation of employee restraints, the restraint can cover any employee of the company or group – regardless of whether the employee had any dealings with them.

There are no requirements in terms of duration of a non-solicitation restraint. However, this restraint is usually inserted in a non-competition agreement and therefore the parties usually agree that this restraint will last for the same duration as the non-competition restraint.

As to the compensation, it is debated whether the above statutory requirement for non-compete agreements would also apply to the non-soliciting covenant.

As for the customers, there is no legal regulation as well. It is simply a matter of enforcing a contractual undertaking. So it is important that the non-solicitation restraint is clearly drafted and states which customers are within the scope of the restraint.

The restraint can potentially cover non-solicitation of customers with whom the employee has had no dealings with previously or prospective customers with whom he/she has dealt with. There are no requirements in terms of duration of a non-solicitation restraint. However, it is common for this restraint to be inserted in a non-competition agreement and therefore the parties usually agree that this restraint will last for the same duration as the non-competition restraint.

Italy is currently subject to the Italian Data Protection Act (Law No 196/2003), as amended by Legislative Decree No 101 of 10 August 2018, and the GDPR.

Data protection legislation must apply jointly with the employment laws set out in the Workers’ Statute (Law No 300/1970). According to its Section 4, the instruments and equipment that are potentially able to monitor employees are permitted only to the extent they are required for organisational, productive or safety reasons or for the safeguarding of company assets, and provided that their use is agreed with the works council or most representative trade unions or authorised by the Labour Office, depending on the specific case.

Such rules do not apply (thus no agreement or authorisation is needed) to the instruments and equipment used by employees for their work (eg, laptop or mobile phone) or to devices that are used by the employer to register employees’ access and attendance at the workplace.

In addition, the data and the information collected through such instruments and equipment can be used for all purposes related to the employment relationship, provided that the employees have been adequately informed of how the instruments can be used and how the controls can be carried out, in compliance with data protection legislation.

From a privacy perspective, the Italian Data Protection Authority (DPA) on 1 March 2007 issued some provisions (“Guidelines applying to the use of email and the internet in the employment contest”) requiring data processors to define internal policy for the use of the internet, email and IT equipment and, in general, internal procedures for data protection purposes. The employer should inform employees in advance and unambiguously about any processing operations that may concern them in connection with possible controls. In particular, employers are required to provide information and instructions on the appropriate use of the IT devices supplied and relevant controls (eg, monitoring), if there are any. More specifically, employers must inform their employees about the type of tools being used, as well as the nature of the controls in place.

Every year, the Italian authorities set quotas for the maximum number of regular work permits that may be applied for (so called “quotas”).

However, pursuant to Legislative Decree 286/1998 (the so-called Immigration Act), highly skilled individuals or employees who perform specific activities can apply to stay and work in Italy under an “extra quotas” procedure.

As for highly qualified individuals, the law provides that they shall have the proper educational or professional qualifications. Alternatively, they should have a so-called blue card issued by another EU member state or have attended professional, civic, and linguistic training in their home country.

EU nationals can stay in Italy up to three months from their arrival with no particular requirements. If the period is longer, they must register with the registry office of the city where they settle.

Non-EU nationals can be hired, but their employment is subject to quotas set by ministry decree (unless they are employed for special activities or are highly qualified employees). The employers shall obtain authorisation from the competent immigration desk, which is typically issued within 60 days from the request. Once hired, non-EU employees must apply for a permit to stay (permesso di soggiorno) within eight days of entering Italy with a long-term visa.

Smart working, a novel method of conducting the employment relationship, is governed by a mutually agreed upon contract between the parties involved and subject to notification to relevant authorities. This approach allows for flexible work organisation based on phases, cycles, and objectives, without strict constraints on time or location, leveraging technological tools to accomplish work activities.

These activities may be carried out both within and outside company premises, with no fixed location, provided the legal and collective bargaining agreement limits on daily and weekly working hours are observed. The employer assumes responsibility for the safety and functionality of the technological equipment provided to employees for work purposes. In turn, employees are entitled to protection against accidents and occupational illnesses, even while working outside company premises and during commutes between home and chosen work location.

The smart working agreement must be formalised in writing for administrative and evidentiary purposes, addressing the specifics of work performed outside company premises, including equipment usage, managerial control, and potential conduct outside company premises warranting disciplinary action. The agreement must also clearly define rest periods and outline technical and organisational measures to ensure employee disconnection from work-related technology.

The agreement may be established for a fixed or indefinite term. In the latter scenario, termination requires a minimum 30-day notice (90 days for disabled workers). For justifiable reasons, either party may withdraw prior to the expiration of a fixed-term agreement, or without notice for an indefinite-term agreement.

The “National Protocol on Smart Working” by the Ministry of Labour and Social Policies, in conjunction with social partners, elaborates on the requirements and specifics of individual smart working agreements.

Crucially, smart workers must receive equitable treatment compared to colleagues performing similar tasks and holding equivalent responsibilities within the same company.

While Italian law and CBAs explicitly address leave for specific purposes such as study, personal reasons, or political office, there is no express statutory framework for sabbatical leave. Such time off remains subject to negotiation and ultimately rests within the employer’s discretion.

During a sabbatical, employees typically forgo remuneration while retaining their positions, though they do not accrue seniority during this period.

The emergence of digital platforms and the gig economy is inextricably linked to both globalisation and the digital revolution. While these advancements have enabled sophisticated and technologically advanced work management systems, they have also raised concerns about the lack of protection for gig workers, including limited access to union representation.

Initially, there were two primary perspectives on the legal status of work via digital platforms: one advocating for its autonomous nature and another proposing the creation of a “tertium genus”, an intermediate category between subordination and autonomy. Recently, however, both in Italy and across Europe, there has been a growing trend towards classifying gig workers as subordinate employees. This shift is often based on specific indicators, such as the methods of carrying out work, particularly in cases like food delivery riders.

New technologies often allow for increased employer control and direction over workers’ activities. In response, the Italian legal system is moving towards ensuring the protections of subordinate work whenever the worker’s autonomy is deemed illusory.

The Italian Constitution provides the freedom to form or to join trade unions.

In our system, trade unions are considered unincorporated associations that do not need any authorisation or registration to be recognised. The trade unions’ associations are governed by their bylaws, which do not need to be checked by any authority.

Workers have the right to establish trade unions, to join them and to take part in union activities within the workplace.

The infrastructure in Italy for collective employee’s representation is organised at two levels: inside and outside the company. In particular there are:

• Outside the company: Trade unions, typically organised by industry sector, are the primary entities. Multiple trade unions representing different industries (eg, food, steel, textile) can join forces to form a “Confederation”. The major Italian trade union confederations are the General Federation of Italian Trade Unions (Confederazione Generale Italiana del Lavoro, CGIL), the Federation of Italian Workers Trade Unions (Confederazione Sindacati Lavoratori Italiani, CISL) and the Italian Work Union (Unione Italiana del Lavoro, UIL). Such confederations bring together different national trade unions. In principle, each national trade union brings together the trade unions organised at regional, provincial or municipality level. The trade unions at national level are those involved in the execution of the CBAs. They also have some information and consultation rights.

• Inside the company: the work councils.

The main union organisations within the workplace are the company-level trade union representation (rappresentanze sindacali aziendali,RSA) and the unified trade union representation (rappresentanze sindacali unitarie,RSU).

In Italy, trade unions have the option to establish either an RSU or RSA within a company. Therefore, a trade union that decides not to establish an RSU maintains the right to set up an RSA (provided that the requirements mentioned below are met). On the other hand, trade unions that wish to participate in the election of an RSU have to formally waive the right to establish an RSA within the same company.

• Section 19 of the Worker’s Statute states that an RSAmay be formed through the initiative of the employees in plants with more than 15 employees within the trade union associations that (i) have executed the collective agreement (at any level) applied by the company or (ii) participated in the bargaining process concerning the collective agreement (at any level) applied by the company, even if they did not execute it. The RSA is usually appointed by the territorial trade union associations (without a general election by the workers).
• An RSU can be formed in plants with more than 15 employees. The members of such union organisations are elected directly by the workers. In fact, such union organisations were introduced in order to allow the workers to choose their internal representatives within the works councils in a more democratic manner as compared to the RSA.

The key function of the RSA/RSU is to negotiate with the employers at company level, while also being entitled to specific information/consultation rights (such as in the event of collective redundancy, transfer of business, etc).

Collective bargaining agreements in Italy primarily take place at two levels: at industry/national level – the most important one – and at company or, sometimes (very rarely), territorial level.

In Italy, for almost each industry sector there is a national collective bargaining agreement that regulates the individual employment relationship (eg, trial periods, notice periods in case of termination, leave of absence, working time, contractual levels, minimum salaries, annual leave, sickness leave, etc).

Nevertheless, in principle – and with certain limitation by case law – the employer is free not to apply any CBA to its employees or, in any case, to choose the CBA to be applied (ie, it does not have to apply the CBA of the specific sector in which the company operates).

The collective bargaining agreements at company level aim to provide more tailored provisions to suit the type of business and activities carried out by the relevant company, and therefore may delve into greater detail on certain aspects of the employment relationship (eg, working time, company canteen, disciplinary measures, etc).

Termination shall be communicated in writing and should contain the relevant reasons. Any termination delivered in the absence of such requirements does not have any effect.

There are various procedures to be followed depending on the type of termination, the size of the company and the date of hiring of the employee.

• Disciplinary procedure: The employer must promptly provide the employee with a written description of the objectionable behaviour or conduct. The employee has the right to respond – orally or in writing – within five days (or a longer timeframe set out in the applicable CBA) through a so-called justification letter. The employer can terminate the employment relationship following (i) the employee’s failure to respond within the said five-day period (or longer timeframe set out in the applicable CBA) or (ii) immediately following the receipt of the justification letter.
• Procedure for dismissal for objective reasons: The employer must communicate in advance its intention to proceed with individual dismissal to the Labour Office of the employee’s workplace, copying the involved employee and explaining the reasons for the termination. This procedure applies only to the dismissal of employees (not having the role of “dirigenti”) hired before 7 March 2015 and employed by companies with more than fifteen employees in a single business unit or in more business units within the same municipality (comune) or again more than sixty employees across all Italian territory. Within seven days from the receipt of the above communication, the Labour Office summons the parties before the Conciliation Office for a meeting in which the parties will attempt to reach an agreement. The procedure will terminate not later than twenty days from the day on which the Labour Office sent the summons.

Should the parties fail to reach an agreement or, in any case, after seven days have elapsed without any summons by the Labour Office, the employer can serve the dismissal.

Collective Dismissals

Collective dismissals are triggered if all of the following conditions are satisfied: (i) the company employs more than 15 people; and (ii) the company intends to dismiss at least five employees, within 120 days, in the same production unit or in a number of units within the same province.

The employer should notify the staff representatives (if any) and the relevant (external) trade union of the decision to proceed with the collective dismissal. If there are no staff representatives, the notification has to be sent to the trade unions of the sector most representative at a national level. The procedure provided by the law lasts a maximum of 75 days. The first phase of the procedure is carried out with the unions and should be completed within 45 days (23 days if the number of employees involved is less than ten) from the delivery date of the communication starting the procedure.

If the parties fail to reach an agreement, there is another phase before the employment office. This second phase cannot last longer than 30 days (15 days if the number of employees is less than ten).

The dismissals may be served within a period of 120 days from the conclusion of the procedure unless the parties have agreed a longer term.

The collective dismissal procedure applies also to executives (dirigenti) but it does not apply to fixed-term workers and temporary workers.

The notice period – which is provided only in case of dismissal for justified reason – varies depending on the CBA applied by the employer and on the seniority and level of the employee. 

The employer can provide payment in lieu of notice.

In each case of termination (even for resignation or gross misconduct), the employee is entitled to:

• indemnity in lieu of holidays and leave accrued but not used;
• severance pay (the “trattamento di fine rapporto”, or TFR), that corresponds to about 7.41% of the overall remuneration earned from time to time by the employee during the employment relationship; this amount is typically set aside annually on the company’s balance sheet, unless the employee has chosen to transfer it to a specific complementary pension fund; and
• the pro-rata amount of the supplementary monthly salary (if any).

The above amounts are paid on top of the indemnity in lieu of notice (if due by the employer).

There are no specific procedures to be followed for the payment of the above indemnities. 

Dismissal for “just cause” occurs when a situation arises that makes it impossible to continue the employment relationship, even temporarily. The applied CBA usually provides some examples of reasons for dismissal that can be considered a “just cause”. Gross misconduct would normally include theft, serious insubordination, unfair competition, disclosure of trade secrets, unjustified and repeated absences as well as any other behaviour which undermines the fiduciary relationship with the employer.

The employer must follow the procedure provided by Section 7 of the Workers’ Statute, namely:

• provide the employee with a letter describing the defaults committed by the employee;
• await the justifications, if any, which are to be provided by the employee within five days (or a longer timeframe set out in the applicable CBA); and
• serve the dismissal letter.

The dismissal is effective from the day on which the disciplinary procedure commenced, and the employee is not entitled to a notice period.

Termination agreements usually include waivers from both parties. The agreements leading to termination of the employment relationship by mutual consent of the parties are admissible, on condition that the settlement is signed in front of trade union, labour council or labour court.

Furthermore, according to Section 2113 of the Italian Civil Code, where the subject matter of the waivers/settlement concerns the individual’s employment rights arising from mandatory provisions of law or collective agreements or arrangements relating to the employment relationship, such waivers will be invalid unless the agreement is signed before one of the competent above-mentioned bodies. If not signed before such bodies, the waivers/settlements can be challenged by the employee within six months from (i) the date of termination of the employment or (ii) from the date of the settlement if signed post-termination of employment.

The employer does not have to offer the employee consideration in exchange for (i) agreeing to enter into a settlement or (ii) in order to obtain an effective waiver of claims/withdrawal from initiated litigation. However, this is very common in practice as an incentive to obtain the employee’s consent to the agreement.

The main protected categories of employees are the following:

• Mothers and pregnant women: Women cannot be dismissed from the beginning of the pregnancy until one year after childbirth; a dismissal within this period would be null and void unless (i) the employer has completely ceased its activity; (ii) there is gross misconduct; or (iii) the termination is due to an unsuccessful probationary period or the expiry of a fixed-term contract.
• Marriage: The above protection also applies to women in the period from the day of the public notification of marriage until one year after the marriage.
• Women: A company cannot make redundant a percentage of women higher than the percentage of women employed in the job category concerned.
• Disabled employees: The dismissal of a disabled employee is voidable if at the time of termination the number of remaining disabled employees is less than the quotas prescribed by law for this category of employees.

There is no legal prohibition against dismissing an employee representative. However, under Section 18 of the Workers’ Statute, during the lawsuit brought by the union representative to challenge his/her dismissal, a labour court may, upon joint petition of the dismissed employee and of his/her union, order the immediate reinstatement of the employee on a precautionary basis and before a final decision, where the court deems that the evidence provided by the employer to prove the reasons justifying the dismissal is irrelevant or insufficient. The applicable CBA may provide further protection (eg, the CBA for the metal-mechanic sector sets out that the employee representative cannot be dismissed without the authorisation of the union to which he/she belongs).

Individual Dismissals

Grounds for termination

Italian labour law requires the termination of the employment contract to be justified based on specific reasons:

• just cause – in case of gross misconduct by the employee which does not allow the continuation of the employment relationship even temporarily;
• subjective justified reasons – whenever the employee breaches a contractual obligation, but the behaviour is not serious enough to warrant dismissal for just cause; and
• objective justified reasons – which concern technical, production-related and organisational reasons.

Remedies in case of unlawful termination

Null and void dismissal

In Italy, a dismissal is considered null and void in the following circumstances:

• if an employer dismisses an employee verbally;
• if the dismissal is motivated by discrimination or retaliation (eg, for an employee exercising their legal rights, such as reporting workplace safety concerns);
• if an employee is dismissed from the beginning of their pregnancy until one year after their child’s birth; and
• if an employee is dismissed because they requested parental leave or got married.

In the above cases, the remedies are the reinstatement of the employee plus the payment of backpay from the date of dismissal to reinstatement, with a minimum of five months’ salary.

In all other cases, the applicable sanctions for unlawful dismissal depend on the reasons that lead to the termination of employment, the employee’s qualification and date of hiring and the company’s size, as follows.

Unlawful dismissals for just cause or subjective justified reasons (disciplinary dismissals)

Employees hired before 7 March 2015:

• Small companies employing up to 15 employees:
1. Employees may be entitled to be re-hired with a new employment contract, or, alternatively, to receive an indemnity ranging between two and a half and six months’ salary.
• Large companies employing more than 15 employees:
1. If the “justified subjective reason” or “just cause” is found to be invalid because: (i) the alleged behaviour did not occur; or (ii) a less severe disciplinary action could have been taken on the basis of the applicable CBA, the employee may be entitled to reinstatement and to an indemnity up to 12 months’ salary, plus social security contributions. In all other cases, the employee is entitled to the payment of an allowance ranging between 12 and 24 months’ salary.

Employees hired from 7 March 2015:

• Small companies employing up to 15 employees:
1. The sole remedy applicable would be the payment of an indemnity ranging between three and six months’ salary.
• Large companies employing more than 15 employees:
1. Employees are entitled to be reinstated solely when it is directly proved that the “material fact” upon which the dismissal was based did not occur. In this case, the reinstatement should be implemented together with the payment of an indemnity up to a maximum amount of 12 months’ salary plus social security contributions. In all other cases, the employee will be only entitled to an indemnity, to be established by the labour court between a minimum of six months’ salary and a maximum of 36 months’ salary.

Dismissals for objective justified reasons (redundancy reasons)

Employees hired before 7 March 2015:

• Small companies employing up to 15 employees:
1. The company may be ordered to re-hire the employee with a new employment contract, or, alternatively, pay an indemnity ranging from two and a half to six months’ salary.
• Large companies employing more than 15 employees:
1. If it is found that the fact on which the termination was based did not occur or is “groundless”, the employee is entitled to reinstatement and to an indemnity for the remuneration lost, capped at 12 months’ salary, plus social security contributions, deducting aliunde perceptum or aliunde percipiendum, if any. In all other cases, the employee is entitled to an indemnity ranging from a minimum of 12 months’ salary to a maximum of 24 months’ salary.

Employees hired from 7 March 2015:

• Small companies employing up to 15 employees:
1. An employee may be entitled to indemnity with a minimum of three months’ salary and up to a maximum of six months' salary.
• Large companies employing more than 15 employees: Employees are entitled to be reinstated solely when it is directly proved that the “material fact” upon which the dismissal was based did not occur. In this case, the reinstatement should be implemented together with the payment of an indemnity up to a maximum amount of 12 months’ salary plus social security contributions. In all other cases, an employee can be entitled to at most between six and 36 months’ salary.

If an employer unlawfully dismisses an employee based on their physical unsuitability for work, the employee shall be reinstated with the payment of all remuneration lost during the period from dismissal until reinstatement, subject to a minimum of five months’ salary, deducting aliunde perceptum or aliunde percipiendum, if any.

Except for the above-mentioned cases, such as retaliatory or discriminatory dismissal, different provisions apply to executives, who, if unlawfully dismissed, are not entitled to reinstatement, but solely to an indemnity depending on the length of service and grounds for dismissal pursuant to the applicable CBA.

Redundancies

A collective dismissal occurs in a large company, staffed with more than 15 employees, when at least five dismissals are served by the employer in a business unit or in more business units located in the same province and within a period of 120 days, due to reduction, transformation or ceasing of activity.

Employees hired before 7 March 2015:

• Law No 223 of 23 July 1991 provides that in the event the employer does not comply with all the steps set forth for the procedure for collective dismissals, the employer shall pay the employee an indemnity ranging between a minimum of 12 months’ salary and a maximum of 24 months’ salary.
• If selection criteria are violated, the employer shall (i) reinstate the employee unfairly dismissed; and (ii) pay him/her an indemnity equal to the salary due between the date of dismissal and the date of the effective reinstatement with a maximum of 12 months’ salary.

Employees hired from 7 March 2015:

• The employees shall be entitled only to monetary compensation. This compensation ranges from a minimum of six to a maximum of 36 months’ salary. The right to reinstatement is limited to cases where the dismissal was communicated orally.
• Even if the employer fails to adhere to the criteria for selecting employees for redundancy, the remedy remains limited to monetary compensation.

Specific sanctions apply to unlawful dismissals related to collective redundancy involving executives. If the dismissal is in breach of either the procedure or the selection criteria, the employer shall pay the executive an indemnity ranging from 12 up to 24 months’ salary, unless the applied CBA provides different provisions on the amount of said indemnity.

Italian legislation contains both a general principle of equality, which prohibits all forms of discrimination, as well as specific provisions against discrimination.

According to the Italian Constitution, all citizens are equal before the law, regardless of sex, race, language, religion, political opinions, personal or social conditions.

The Workers’ Statute prohibits employment discrimination.  It specifically prohibits:

• Discrimination based on union membership or activity: Employers cannot make hiring decisions, dismissals, job assignments, workplace transfers, disciplinary actions, or any other prejudicial actions based on an employee’s union membership, union activities, or participation in strikes.
• Direct and indirect discrimination: Both direct and indirect discrimination are prohibited. Direct discrimination occurs when an individual is treated less favourably due to a protected characteristic. Indirect discrimination involves seemingly neutral provisions or practices that disproportionately impact individuals with a protected characteristic.

It is also unlawful to harass a person, violate his/her dignity or create a hostile, degrading, humiliating or offensive environment due to the person’s protected characteristic.

Harassment based on racial or ethnic origin, religion or convictions, disability, age and sexual orientation and sexual harassment constitutes a very serious breach of employment obligations when it occurs within the company, regardless of who commits the harassment. This holds true provided the employer is aware of the harassment and fails to take necessary measures to stop it.

An employee may file a claim for discrimination before the labour court. The court has the authority to order the employer to cease the discriminatory behaviour, to nullify the effects of the unlawful conduct, and to implement measures to prevent future discrimination. Additionally, the court may award damages to the employee, with the amount being determined at its discretion.

Since 2014, the Italian Ministry of Justice has been actively involved in the digitisation of documents, document management, and notification processes, in line with both European Union and Italian regulations, to facilitate the implementation of the telematic civil trial.

As part of these efforts, hearings, including public ones, can now be conducted via remote audiovisual links. This may be ordered by the court when the physical presence of individuals other than the lawyers, parties, public prosecutor, and judge’s assistants is unnecessary. The court’s decision must be communicated to the parties at least 15 days before the hearing. Any party may request, within five days of this communication, that the hearing be held in person.

The court will then assess the importance of the parties’ presence and issue a non-appealable decree within five days. The decree may order the hearing to be held in person for those who requested it, while allowing other parties to participate remotely via audiovisual links.

In addition, on 27 October 2020, the Italian Supreme Court signed a Memorandum of Understanding for the Digitisation of Documents in Civil Trials. This protocol enabled the digital handling of documents that had already been filed in hard copy before the Supreme Court.

Labour-related matters are subject to a specific trial which is different from the ordinary trial used for civil and commercial matters. In most cases, employees file employment claims on an individual basis. However, there are instances where multiple employees may collectively pursue a single claim against their employer to secure a common right. Furthermore, specific labour claims can be filed by “collective actors”. From this perspective, a trade union can bring a claim for anti-union behaviour and the Counsellor for Equal Opportunities can commence a lawsuit in the event of collective discrimination in the workplace. The labour trial is subject to a strict procedure. In particular, each party is required to include all the argumentation and evidence requests in the first brief submitted to the court.

Labour claims may be submitted to arbitration:

• during settlement negotiations, when the parties may jointly delegate the dispute’s resolution to the Local Employment Office through arbitration;
• in accordance with the procedures set out by the applicable CBA; and
• before an arbitration court specifically appointed upon agreement between the parties.

In principle, arbitration is optional, so each party has the right to bring an ordinary action before the competent labour court. As a consequence, employers may not compel employees to arbitrate claims.

The dispute may be referred to arbitrators only if the parties:

• enter into an arbitration agreement after the dispute has arisen; or
• enter into an arbitration clause, before the dispute has arisen.

The above arbitration clause is only valid and effective provided that:

• the applicable CBA allows the parties to execute such a clause;
• it is entered into by the parties after the expiry of the probation period, or, if no trial period is provided, after thirty days of the commencement of the employment relationship;
• the clause is certified by the competent administrative bodies (“Commissioni di Certificazione”); and
• it does not concern issues relating to employment termination.

Labour arbitration is informal, designed to achieve conventional effects akin to a settlement. Disputes concerning the arbitrators’ decision must be brought before the competent labour court within 30 days of notification. The court will review and interpret the arbitration decision as a contract.

The general principle is that the losing party in a lawsuit should pay the legal costs of the counterparty (winning side) for the amount decided by the court. However, under particular circumstances, the court can also “offset” the court costs, effectively leading to each party bearing their own expenses.

In addition, the law stipulates that if the successful party had previously declined a settlement proposal put forth by the court,and the amount of that proposal was equal to or greater than the final judgment award, that party might be ordered to pay legal fees.