Employees’ Categories

Under Italian law (Article 2095 of the Italian Civil Code or ICC), there are four categories of employees.

• Executives (dirigenti) are employees, reporting directly to their employer or to another executive who is expressly delegated, who perform business activities that require a high degree of professionalism and do so with broad autonomy and discretion, a great deal of initiative and the power to provide guidelines to the entire company (or an autonomous part thereof). Being classified as an executive requires active engagement and collaboration, assuming the responsibilities inherent to the role, in furthering the company’s objectives and strategic goals.
• Middle managers (quadri) are employees who perform (on a continuous basis) strategic activities for the development and/or implementation of their employer’s goals, but are not classified as executives.
• White-collar workers (impiegati) are employees who co-operate with the employer by carrying out intellectual activities (ranging from conceptual activity to purely executive duties) with a lower degree of autonomy than executives and middle managers.
• Blue-collar workers (operai) are employees assigned chiefly to manual tasks and duties.

Distinction between Blue-Collar and White-Collar Work

The collective bargaining agreement applied by the employer (if any) provides for subcategories/levels of employment (generally with regard to blue- and white-collar work).

This distinction, however, is not as important as it once was. Currently, most national collective bargaining agreements (NCBAs) introduce a unified system of classification for blue- and white-collar workers. Nonetheless, certain differences are still in place with regard to the legal and economic treatment granted to each category, namely:

• blue-collar workers are still paid on a daily basis, whereas the salary of white-collar workers is calculated on a monthly basis; and
• the sickness indemnity for white-collar workers is charged, in whole or in part, to their employer in certain sectors, whereas the sickness indemnity for blue-collar workers is fully reimbursed by the Italian Social Security Contribution Institute (INPS).

Permanent Full-Time Employment Contracts

No formal requirements are set forth by the law and the parties can also execute the agreement orally, except in certain cases specified by the law (eg, maritime employment agreements).

However, Italian law provides that certain covenants (eg, probationary period covenants and non-competition covenants) must be agreed in writing prior to hiring. If the parties do not respect the mandatory format then the relevant covenant is null and void.

Moreover, employers are required to communicate certain information to the employee in writing at the time of hiring or within seven days of the hiring.

According to recently introduced legislation, employers have a duty to communicate the following information to the employee in writing:

• the parties to the agreement;
• the workplace;
• the employer’s legal seat;
• the employee’s job category and level;
• the start date;
• the type of employment (permanent or fixed-term);
• in case of staff-leasing/temporary workers, the details of the relevant relationship;
• the use of fully automated decision-making or monitoring systems in the workplace; and
• the NCBA applied.

Further information concerning the employment relationship (probationary period, holidays and paid leave, dismissal and resignation notice period, etc) may be communicated to the employee by indicating the law or the NCBA applied that regulates the matter.

The employer must retain proof that they fulfilled this duty for five years following the termination of the employment relationship.

Terms and conditions of the employment relationship

From a legal and economic standpoint, the main terms and conditions of the employment relationship generally tend to be set forth in the NCBA applied by the employer. The parties must not worsen the employee’s position by agreeing on covenants that derogate from the mentioned minimum treatment.

If the employer does not apply any NCBA, the minimum treatment is provided by the law (eg, the ICC, Legislative Decree 66/2003 and Legislative Decree 23/2015).

Fixed-term employment agreements must be agreed in writing before or at the time of hiring. A copy of the signed agreement must be delivered to the employee within five days of the hiring.

An employment relationship could be subject to a term if the relationship lasts no more than 12 months. However, fixed-term relationship may have a longer duration (up to 24 months) only if one of the following reasons applies:

• they were entered into to meet specific needs provided by the collective bargaining agreements signed by comparatively more representative trade unions at national level (or by their internal representative in case of company collective bargaining agreements);
• they were entered into for reasons of a technical, organisational, or production nature mutually agreed upon between the parties, and only in the absence of a collective bargaining agreement (this is only a valid reason until 30 April 2024); or
• they were entered into to cover for temporarily absent employees.

Fixed-term agreements can be extended freely during the first 12 months. However, if the cumulative duration, factoring in the extension(s), exceeds 12 months, the extension remains valid only if the total contract duration does not surpass 24 months and one of the aforesaid reasons applies.

Italian law allows a maximum of four extensions.

Renewing a fixed-term contract requires an interval between the end of the initial contract and the start of the new one. This break, known as the “stop-and-go” period, should be:

• at least ten days for contracts with a duration of six months or less; or
• at least 20 days for contracts lasting over six months.

Prohibitions

Fixed-term employees cannot be hired in the following cases:

• to replace striking employees;
• at plants where collective dismissals have taken place within the previous six months if they involve employees with roles similar to the proposed fixed-term positions, unless the fixed-term contracts are being entered into to replace absent employees or to hire those on a redundancy list, or have an initial duration not exceeding three months;
• at plants where employees, holding roles similar to the proposed fixed-term positions, are currently either suspended or on reduced hours with access to the Wage Integration Fund; or
• if the relevant employer has not carried out a risk assessment as mandated by workplace health and safety laws.

Maximum duration

The entire relationship between the same employer and the same employee cannot exceed 24 months for performing tasks and duties in the same category (and subcategory/level if applicable).

This limit takes into account renewals, extensions, previous fixed-term employment agreements (including those that occurred a long time before) and previous fixed-term temporary-work relationships (including those that occurred a long time before).

Certain exceptions to this limit are provided by the law and collective bargaining agreements.

Maximum number of fixed-term employees

The number of fixed-term employees cannot exceed 20% of the number of permanent employees as of 1 January of the relevant year (certain exceptions exist under the law and NCBAs). The breach of these legal limits is punishable by a fine.

Preferential right

A fixed-term employee who has been employed for more than six months by the same employer is granted preferential rights for permanent positions. This applies to positions that open up within the subsequent year and that align with the duties they previously performed as fixed-term employees.

Sanctions

The violation of the mandatory rules triggers the conversion (by a court) of the fixed-term contract into a permanent contract. Employers will also be compelled to pay a lump sum, worth between two and 12 months of the employee’s salary.

Full-Time Employment

An employee’s working time is subject to regulations set forth by the collective bargaining agreement applied by their employer.

If the employer does not apply any collective bargaining agreements, the working time is regulated by Legislative Decree 66/2003, according to which:

• the normal weekly working time is 40 hours per week;
• the weekly working time cannot exceed 48 hours per week (including overtime activities) averaged over a four-month period;
• overtime activities are allowed up to 250 hours per year and an employee can be required to perform overtime only in certain cases, for example:
1. exceptional technical and/or production reasons that cannot be addressed through the hiring of new employees; or
2. particular events;
• overtime activities must be remunerated in accordance with the NCBA; and
• employees are entitled to one day of rest per week, 11 consecutive hours of rest per day and ten minutes of rest for every six working hours.

The violation of these rules could trigger the application of administrative or criminal sanctions.

Exceptions to these rules are provided by law for certain individuals (eg, executives and middle managers).

Part-Time Employment

Parties may agree three types of part-time employment agreements:

• horizontal – a reduction of the daily working time (the part-timer has the same number of working days as full-timers);
• vertical – a reduction of the number of working days/weeks/months with respect to full-timers (the part-timer has the same daily working time as full-timers); and
• mixed – a combination of horizontal and vertical part-time work.

Part-timers can be hired under a permanent employment contract or a fixed-term employment contract.

Formal requirements

Part-time contracts must be executed in writing so as to be evidenced.

In the agreement, the parties must indicate the schedule of the part-timer’s working activities.

Flexible covenants

The parties may agree on a so-called flexible covenant, according to which the employer could require the part-timer to perform their tasks and duties:

• outside the working days/weeks/months/hours specified in the agreed schedule; and/or
• in accordance with a daily working time that differs from the one initially agreed upon.

The terms and conditions of the flexible covenant are set forth in the NCBA applied by the employer.

Employers who do not apply an NCBA may agree a flexible covenant with a part-timer on the conditions provided by the law (eg, a two-day notice for the new working time and special remuneration).

According to the Italian Constitution (Article 36), employees are entitled to receive a salary that is commensurate with the quality and quantity of their working activities and, in any case, sufficient to allow them (and their families) to lead a free and dignified life.

According to the main decisions of the Italian Supreme Court, the constitutional wage is equal to the minimum wage provided by the NCBA for the business sector in which the employee is employed. Therefore, employers are not allowed to pay a salary lower than the constitutional wage/minimum wage provided by the NCBA. If this mandatory rule is violated, an employee is entitled to obtain payment of their outstanding salary. This mandatory rule is also applicable to employers who do not apply any NCBA. In this case, they are obliged to grant their employees the minimum wage provided by the NCBA for their business sector.

The minimum wage varies from NCBA to NCBA and depends on the category and subcategory/level of the employee. Generally, NCBAs provide for an increase in salary that depends on the employee’s length of service. NCBAs state the number of instalments in which the salary should be paid. According to Italian law, this number cannot be lower than 13.

Employers are free to grant their employees a so-called superminimum (ie, a portion of the salary exceeding the minimum wage). An absorbable superminimum can absorb (totally or partially) any possible increase in the minimum wage granted by the NCBA.

Additional Compensation

Beyond the standard minimum wage, NCBAs often outline additional compensation for particular tasks and roles, ensuring employees are compensated fairly when working under challenging conditions, including extended hours.

On top of their salary, employers may grant employees company tools for the execution of their tasks and duties; if these tools are also used for personal purposes, the value of the usage for personal purposes is part of the employee’s remuneration.

Employers are not mandated to provide bonuses to their employees, although specific guidelines in the applicable NCBA may dictate otherwise.

Holidays

Employees are entitled to a mandatory period of paid holiday, the length of which is quantified by the NCBA applied by the employer. This period cannot be less than four weeks per year – two weeks should be taken by the employee during the year of accrual and the remaining two should be taken within 18 months following the year of accrual.

Payment in lieu of unused holidays is prohibited, except upon termination of employment.

Maternity Leave

Mothers are entitled to five months’ maternity leave. The paid leave commences not earlier than two months before the due date and ends not earlier than five months after the child’s birth.

During their leave, mothers are entitled to receive the payment of an indemnity from the INPS that is equal to 80% of their salary. Generally, NCBAs oblige the employer to pay an amount equal to the difference between the employee’s full salary and the amount of the indemnity.

Paternity Leave

Fathers are entitled to paid leave of ten days (continuous or otherwise), which must be taken in a period beginning two months before the birth and ending five months after the birth. This increases to 20 days for a multiple birth. Optionally, fathers can take an extra day if mothers sacrifice one from their maternity leave.

In certain cases under the law, fathers can be entitled to the same paid parental leave as mothers; for example, if the mother dies or falls seriously ill, or the child is abandoned by the mother.

Adoption

Adoptive parents are entitled to the same rights granted to birth parents.

Parental Leave

Employees are entitled to a period (continuous or otherwise) of parental leave during the first 12 years of the child’s life, equal to nine months (not exceeding six months for each parent and increased to eleven months in case of a single-parent family).

The parents cannot benefit from a total period of parental leave longer than ten months for each child (exceptions are provided by the law).

Employees are entitled to receive payment of an indemnity from the INPS equal to 30% of their salary for the days of leave taken within the first 12 years of the child’s life. For one month, up to the child’s sixth birthday, 80% of one parent’s salary is granted.

Other Leave

Other types of leave are granted by the law and NCBAs to employees with or without parental status, including for:

• breastfeeding breaks;
• a disadvantaged or sick child;
• study leave;
• marriage breakdown;
• donation of blood;
• elections; and
• trade union activities.

Leaves/breaks connected to disadvantaged status

Italian law grants leave and breaks both to disadvantaged employees and employees who have the custody of disadvantaged individual(s). The conditions, limits and durations of such leave are provided by the law (eg, Legislative Decree 151/2001 and Law 104/1992).

Illness/injury

According to Article 38 of the Italian Constitution, employees have the right to be granted adequate means of subsistence in the event of illness or injury. Furthermore, Article 2110 of the ICC recognises the right of a sick or injured employee to retain their job for a period of time determined by the NCBAs (guaranteed sick leave). An employer can terminate the employment relationship only after this period has elapsed.

The verification of an illness requires certification from a doctor within the Italian healthcare system. Employers can validate the legitimacy of the illness exclusively through this system.

During their sick leave, employees are entitled to receive an indemnity provided by the INPS or by their employer in cases stipulated by the law (eg, if they are executives, middle managers and white-collar workers in the manufacturing sector). NCBAs could include different provisions (usually an addition to the indemnity that grants the employee a total indemnity equal to their normal salary).

Confidentiality requirements

During the employment relationship, the ICC obliges employees to carry out their duties with loyalty. This obligation includes non-disparagement and confidentiality obligations.

The breach of these loyalty obligations may trigger a dismissal for just cause.

After the termination of the employment relationship, employees are subject to criminal sanctions if they disclose the confidential information of their employer (as defined by the Italian criminal system). They can be bound by non-disparagement and confidentiality obligations (that also apply to information other than the “confidential” matters defined by the above) only if agreed upon with the employer at the time of hiring.

According to the ICC, employees cannot act in competition with their employer during the employment relationship (breaches of this obligation may trigger a dismissal for just cause).

After the termination of the employment relationship (for whatever reason), employees can be bound to non-compete obligations only if a specific agreement to this effect has been agreed upon with the employer.

Non-compete clauses/agreements must:

• be agreed in writing;
• be limited to a specific geographical area and a specific activity;
• not exceed a five-year period (for executives) and a three-year period (for non-executive employees); and
• set out a fair level of remuneration for the employee that takes into account the duration, the area and the type of business that is prohibited.

It is common practice to include a penalty clause for breaches of non-compete obligations; however, the existence of the penalty does not prevent the employer from claiming additional damages before a court. During judicial proceedings, employers can also request injunctions to halt the ex-employee’s infringing actions.

In general, Italian law does not regulate non-solicitation clauses and the mandatory rules provided for non-competition clauses do not apply to solicitation. However, according to the Italian courts, the clause must be agreed in writing within the employment agreement and the employee is not entitled to receive any remuneration for the obligation.

Employers may process employees’ personal data for the sole purpose of executing the employment relationship. Collection and retention of the data must be implemented in accordance with EU Regulation No 679/2016 (the GDPR) and Italian legislation (Legislative Decrees No 101/2018 and No 51/2018, among others).

Employers (the data controller) must provide employees with the following information:

• the identity and contact details of the controller, the controller’s representative and the data protection officer;
• the purpose of the processing for which the personal data is required, as well as the legal basis for the processing;
• the legitimate interests pursued by the controller (except where such interests are overridden by interests of fundamental rights and freedoms of personal data);
• the recipients of the personal data, if any; and
• the fact that the controller intends to transfer personal data to a third country or an international organisation (if applicable).

Employers are obliged to provide the following additional information:

• the period of data retention;
• an indication of the employees’ right to request access to personal data;
• an indication of the employees’ right to request rectification or erasure of personal data;
• an indication of the employee’s right to withdraw consent to the collection of data at any time, where provided by the law;
• the right to lodge a complaint with the relevant supervisory authority;
• whether the provision of personal data is
1. a statutory or contractual requirement; or
2. a requirement necessary to enter into a contract;
• whether the data subject is obliged to provide the personal data and the possible consequences of failure to provide such data; and
• the existence of automated decision-making, including profiling and meaningful information about the logic involved, as well as the significance and the envisaged consequences of such processing for the employee.

Consent and the Fulfilment of Rules

The privacy laws outline the cases in which consent is not necessary.

Employers must be able to demonstrate that employees have consented to the processing of their personal data. The consent must be specific, informed and unequivocal.

The data controller (or its representative) must keep a record of the processing operations carried out under their responsibility.

The fulfilment of the mandatory rules on privacy allows the employer to control the tools used by the employee for carrying out their tasks and duties (eg, emails, computer and phone). However, the employer must inform its employees about the conditions of usage of the tool and how the power of control is exercised by the employer over the tools. If these mentioned conditions are not met, the employer cannot use the data unlawfully acquired.

EU citizens can freely move, establish themselves and work in any EU member state, whereas non-EU citizens are subject to immigration procedures.

Mandatory provisions and procedures are provided by the law in cases of secondment of employees to Italy by an EU employer.

The hiring of non-EU employees is allowed on the condition that entry and residence requirements established in Italian Immigration Law are complied with. A special procedure must be implemented for hiring non-EU employees who are not resident in Italy.

EU citizens do not need visas or work permits and must register themselves only if they establish themselves in Italy for a period longer than three months.

Non-EU citizens can be employed in Italy only if they possess a residence permit or a visa for working purposes. The entrance into Italy of non-EU citizens is strictly governed by the law. A ministry decree only permits a certain number of individuals from each non-EU country to enter Italy each year.

Law No 81/2017 has introduced a flexible form of employment relationship called smart working.

Smart working allows employees to work without being bound by traditional working hours and from places other than the company’s premises.

In line with current legislation on the processing of personal data and, in particular, with EU Regulation No 679/2016 (GDPR), the employer shall take all appropriate technical and organisational measures to ensure the protection of the personal data of smart workers and of the data handled by them.

To this aim, the employer shall provide the smart worker with information regarding the processing of personal data and with guidance regarding the security measures that must be observed.

The employer is also required to ensure the safety of employees during smart working. To this end, once a year the employer must provide smart workers and the Employees Safety Representative (Rappresentante dei Lavoratori per la Sicurezza or RLS) with written information regarding the risks linked to smart working.

Employers must uphold the smart workers’ right to disconnect, ensuring they can disengage from work activities and avoid work-related electronic communications, such as emails, outside of their designated working hours.

While the Law does not specify penalties for violating this mandatory rule, breaching a smart worker’s right to disconnect may expose the employer to potential liabilities. If a smart worker seeks judicial redress, the employer might be held liable for any consequential damages, whether monetary or otherwise.

For smart workers, the conditions regarding insurance against work-related accidents and occupational illnesses remain unchanged; therefore, such employees are insured against accidents that occur while performing work outside the workplace.

Smart workers are also insured against accidents occurring during the normal commute from home to the chosen place of work outside the company premises, when the choice of the place of work (i) is based on requirements related to the work itself or is justified by the employee’s need to balance life and work and ii) meets reasonable criteria.

Regarding remuneration and social security conditions, smart workers are treated no differently from employees who perform their tasks and duties at the company’s premises.

The types of sabbatical leave under Italian law are outlined below.

Study Leave (Article 5 of Law No 53/2000)

Employees who have worked for the same employer for at least five years and who intend to pursue a diploma, a degree or to attend another kind of educational course are also eligible to take study leave. The study leave is unpaid and allows the employees to keep their jobs, albeit without accruing seniority. Employees can take such leave for up to 11 months, either taken consecutively or in intervals, throughout their career. However, if there are valid organisational reasons, employers have the discretion to decline the leave request. Further conditions for this type of leave may be provided for in the applicable NCBA.

Leave for Elective Public Office (Article No 51 of the Italian Constitution)

If an employee is elected to public office, they are entitled to a leave that spans their entire tenure in that role. While they can retain their job designation during this period, they won't receive a salary from their employer. As this form of leave is enshrined in the Italian Constitution, employers are obligated to honour it and cannot refuse the request.

Unpaid Leave for Personal Reasons

Employees are entitled to take unpaid leave due to pressing personal circumstances. Employees are entitled to retain their jobs, albeit without accruing seniority.

Digital platform work, an emerging trend, leverages online platforms like websites or apps to connect clients’ needs with the services provided by digital platform workers. As outlined in Article 1 bis of Legislative Decree No 152/1997, employers are required to provide digital platform workers with clear information about any wholly automated decision-making or monitoring systems used to manage work activities, including measures adopted for cybersecurity.

One prominent example of digital platform workers are “riders” – those who deliver goods in urban areas using bicycles or motor vehicles. They rely on digital platforms, which connect them to customers, set their pay, and dictate how the delivery service operates.

Depending on the specifics of the delivery activities, riders are classified as:

• “hetero-organised workers” (ie, algorithmically-managed workers); or
• self-employed (Articles 47bis-47octies, Legislative Decree no. 81/2015).

Pursuant to Article 2, paragraph 2, Legislative Decree No 81/2015, hetero-organised workers are subject to the same rules as employees unless there are NCBAs that specifically regulate their treatment due to the special organisational needs of riders. According to the most recent case law, riders are classified as hetero-organised workers if they work on an exclusively personal and continuous basis and, above all, if their work is organised by the platform’s algorithm, which selects work shifts based on criteria completely unrelated to the preferences and interests of the worker.

Riders are self-employed if they carry out their activities independently, without conditions of subordination and not on a continuous basis. They have the right to remuneration, which may be determined based on criteria established by an NCBA. In the absence of collective agreements, riders cannot be remunerated for work performed but rather they must be guaranteed a minimal salary per hour, based on the minimum wage established by an NCBA of a similar or equivalent industry. In addition, an additional allowance, equal to not less than 10%, must be guaranteed for work performed at night, on holidays or in bad weather conditions. For self-employed riders, the legislation also provides for mandatory insurance coverage against accidents at work and occupational illnesses.

According to Article 39 of the Italian Constitution, the freedom and protection of trade union activities are ensured. Individuals are granted the right to join, fund, and participate in trade union activities.

Trade unions play a pivotal role in shaping employment relationships, primarily through collective bargaining agreements. These agreements set a "baseline" of economic and legal protections for employees, which employers cannot undermine.

Due to the freedom to establish trade unions, multiple trade unions often coexist within a single business sector. This proliferation leads to a multitude of collective bargaining agreements specific to that sector.

To safeguard the constitutional rights of trade unions, a distinct judicial procedure is in place to address any anti-union conduct by employers, as outlined in Article 28 of Law 300/1970.

The existence of employee representative bodies in the workplace is a consequence of the freedom to participate in trade union activities, which is granted by the Italian Constitution.

Particular rights are granted to a qualified employee representative body formed in accordance with Article 19 of Law 300/1970 – that is, a so-called rappresentanza sindacale unitaria (RSA). Employees and trade unions are free to form representative bodies that differ from RSAs; however, in this case, the relevant body is not entitled to exercise those rights granted by law only to RSAs.

Since 1993, the rights granted by law to RSAs have also been granted to another kind of employee representative body: the rappresentanza sindacale unitaria (RSU).

Unlike the RSA, which is a representative of one specific trade union, the RSU is a representative body whose members are elected to represent all the trade unions that have participated in the relevant election. The number of members depends on the size of the employer.

The conditions required by the law for the creation of an RSA and an RSU are different. Therefore, it is possible to have an RSA that represents certain trade unions and an RSU that represents other trade unions within the same employer.

RSAs and RSUs can only be created within employers that employ more than 15 employees (or five employees in the case of an agricultural employer).

RSAs

Pursuant to Article 19 of Law 300/1970, RSAs may be created within each employer’s production unit upon the initiative of the employees by trade unions that sign a collective bargaining agreement (whether national, local or company-specific) applied by the employer.

The Italian Constitutional Court has extended the right to create an RSA to trade unions that have actively participated in the negotiation of the collective bargaining agreement(s) applied, irrespective of their effective signature of that agreement.

Employers who do not apply an NCBA are not obliged to recognise RSAs; however, if they recognise the RSA on a de facto basis, it is then entitled to exercise all the rights granted by the law.

RSUs

These may be established within each employer’s production unit by trade unions that:

• sign or adhere to the agreements on trade union representation;
• sign the NCBA applied in the production unit; and
• are formally constituted and have their own by-laws that meet all the conditions for participating in elections.

The member allocation for RSUs is as follows:

• three RSU members in production units with up to 200 employees;
• three RSU members for every 300 employees in production units employing up to 3,000 employees; and
• three RSU members for every 500 employees in production units that employ more than 3,000 employees.

RSU members are appointed through elections organised within the relevant employer’s production unit.

Law 300/1970 grants certain rights exclusively to RSAs and RSUs, including:

• the right of assembly (Article 20);
• the right of referendum (Article 21);
• limitations on the transfer of an RSA or RSU member (Article 22);
• trade union leave (Articles 23 and 24); and

• the right to publish communications on boards situated in the employer’s premises (Article 25).

An agreement may qualify as a collective bargaining agreement provided that at least one party is a trade union (at a national, local or company level).

Collective bargaining agreements can be classified at the following levels:

• confederation level;
• national level; and
• local level (which includes agreements executed at the company level).

Collective bargaining agreements are generally formed by rules that can be grouped into the following categories.

• Industrial relations – a set of rules that regulates the relationships between employers (and relevant associations) and trade unions, as well as links between national, local and company collective bargaining agreements.
• Legal and economic treatments – a set of rules that regulates the main aspects of the employment relationship, including notice periods, holidays, working time, special indemnities, transfers, business trips, dismissals, disciplinary procedures and employment categories.
• Minimum wage – the minimum wage applicable for each category and subcategory/level of employees.

In some cases, collective bargaining agreements are required by law to regulate certain aspects of the employment relationship (eg, apprenticeships, fixed-term agreements, part-time arrangements, working time and notice periods).

It is important to note that the rules in collective bargaining agreements are a “baseline”, and employers can deviate from these rules only if they offer superior benefits or terms to their employees.

Generally, NCBAs last three years; often the agreement sets out the provisions for regulating the period between the expiry of the previous NCBA and the start date of the new one.

Individual Dismissal

Except in certain cases (eg, domestic workers, executives and employees still in their probationary period), employees hired under a permanent employment contract can be lawfully dismissed on the following grounds.

• Just cause – a serious infringement of the obligations related to the performance of the job or an external deed, such as committing a crime, that jeopardises the relationship of trust between the employer and the employee. In this case, the dismissal is effective immediately and the employee is not entitled to a notice period. Just cause is the only grounds for dismissing fixed-term employees.
• Justified subjective reasons – these relate to significant non-compliance with contractual obligations that do not amount to a just cause. In this case, the employee is entitled to receive the applicable notice period (or the relevant indemnity in lieu thereof). This differs from a just cause termination based on the severity of the misconduct, which is more serious in just cause cases.
• Justified objective reasons (redundancy) – these are defined by law as reasons relating to production activity, the organisation of work, and the regular functioning of the enterprise, leading to the elimination of a specific job role. Employers with a workforce exceeding 15 employees are obligated to follow a mandatory procedure in the case of the dismissal, for justified objective reasons, of an employee hired before 7 March 2015. Failing to comply with the procedures renders the dismissal unlawful.

Employers must communicate the dismissal in writing and must communicate to the employee the reasons for the dismissal.

The dismissal of an executive is subject to different rules, which are provided in the NCBA applied by the employer.

Collective Dismissal

Collective dismissals (ie, the dismissal of five or more employees during a 120-day period by an employer that employs more than 15 employees) are governed by Law No 223/1991.

The employer must comply with a mandatory procedure that triggers, inter alia:

• the obligation to inform and consult with trade unions and employee representative bodies for a mandatory period of time; and
• the applicability of the legal criteria for selecting employees for redundancy (length of service, family dependents, technical reasons, etc) unless the employer has agreed upon different criteria with the unions/staff representatives.

Failing to comply with these procedures renders the dismissal unlawful.

Notice Periods

Whenever an employment relationship concludes, the departing party has to give notice, with exceptions when the termination is:

• for just cause, either for dismissal or resignation;
• communicated during the probationary period; or
• based on a mutual agreement.

The length of the notice period is provided by NCBAs and depends on the category/subcategory/level of the employee, the length of service and whether the termination results from dismissal or resignation. In cases of resignation, NCBAs generally provide for a shorter notice period.

If the departing party terminates the relationship without honouring the mandatory notice period, the counterparty is entitled to receive an indemnity in lieu of said notice period. The amount of the indemnity shall be equal to the salary that the employee would have received during the notice period.

Severance

In any case of termination, employers are obliged to pay employees the severance payment accrued by the employee during the employment relationship. The main severance payment (trattamento di fine rapporto or TFR) is governed by Article 2120 of the ICC and the applied NCBA. The amount is roughly equal to 7.4% of the remuneration paid to the employee during the employment relationship. Employees are also entitled to receive other minor severance payments (eg, the supplementary monthly instalments accrued on a pro-rata basis, or for holidays and leave accrued and not taken).

In cases of dismissal for just cause and justified subjective reasons, employers must deal with a mandatory procedure governed by the law and respect the following rules.

• The disciplinary code (or an equivalent excerpt of the applicable NCBA) shall be posted in a place at the employer’s premises accessible to all employees.
• The misconduct in question shall be raised with the employee in a prompt manner after it has come to light.
• The employer must provide the employee with a written warning letter that comprehensively details the alleged misconduct.
• The employee is entitled, within five days (or within a longer period determined by the applicable NCBA), to file their justifications in writing and/or to ask for a meeting with the employer. This meeting, upon the employee’s request, may also be held in the presence of the employee’s trade union representative.
• During this five-day period (or the longer period fixed by the NCBA applied), the employer cannot impose the sanction/dismissal against the employee.
• Once the period for filing justifications ends, and within the timeframe set by the applicable NCBA, the employer can proceed with the dismissal by giving written notice.
• The dismissal shall be commensurate with the seriousness of the employee’s misconduct.
• The effect of the dismissal is backdated to the date of delivery of the warning letter.

Failing to comply with the mentioned mandatory procedure renders the dismissal unlawful.

If an employment relationship ends through mutual agreement, similar to a resignation, the employee is obliged to convey this decision via a dedicated website provided by the Public Labour Office. Neglecting this mandatory step results in the continuation of the employment.

A particular procedure is set forth by the law for protecting mothers and fathers (ie, pregnant employees and parents of a child under the age of three). In such cases, the mutual termination must be confirmed by the employee before the Labour Office (and not communicated through the website).

Although it is not mandatory, termination by mutual consent of an employment relationship is often accompanied by a settlement agreement between the employer and the employee. In such agreement, both parties reciprocally waive any claim related or connected to the execution and termination of the employment relationship.

According to Article 2113 of the ICC, an employee may challenge the lawfulness of a settlement agreement:

• within six months of the termination of the employment relationship (if the settlement agreement is executed during the employment relationship); or
• from the date of execution (if the settlement agreement is executed following the termination of the employment relationship).

The above-mentioned provision does not apply if the settlement agreement is executed before certain entities, including:

• courts;
• the Labour Office;
• settlement committees formed in accordance with the relevant NCBA; or
• authorised subjects.

If the employee does not challenge the lawfulness of the settlement agreement within the aforementioned six-month period or the settlement agreement is executed before the aforementioned entities, the settlement agreement becomes binding and cannot be challenged.

Italian law establishes strict regulations to prevent discriminatory conduct by employers and to protect certain vulnerable categories of employees from possible discrimination.

In particular, the following forms of dismissal are null and void:

• discriminatory or retaliatory dismissals: dismissals based on race, gender, beliefs, age, sexual orientation or disadvantaged status are considered discriminatory.
• dismissals of new mothers (and fathers if they use mandatory paternity leave or maternity leave) from the onset of pregnancy up until the child’s first birthday; during this period, employers can dismiss these employees solely:
1. for just cause;
2. if the specific business operations associated with the employee’s role come to an end; or
3. due to the unsuccessful completion of the probationary period.
• dismissals issued from the day on which marriage banns have been published up until one year from the celebration of the marriage; employers can dismiss an employee during this period solely:
1. for just cause; or
2. if the specific business operations associated with the employee’s role come to an end.
• dismissals of disadvantaged employees if, as a result of the dismissal, the employer is no longer in compliance with the compulsory quota for disadvantaged employees outlined in Article 3 of Law 68/1999; this prohibits collective dismissal and dismissal for justified objective reasons, but not in cases of dismissal for just cause or for justified subjective reasons.
• dismissals following an employee’s appeal for parental leave or after the employer has declined an employee’s request to change their work status from part-time to full-time or vice versa.

Particular limitations are also provided by the law in cases where disadvantaged employees are dismissed during their probationary periods or due to diminished work capacity.

Dismissals of employees who are on sick leave are deferred until the period of sickness is over, unless the dismissal is for just cause.

In cases of unfair dismissal, employees are entitled to different forms of protection that depend on:

• the seriousness of the unlawfulness;
• whether the dismissed employee is an executive;
• the date the employee was hired; and
• the size of the employer.

Discriminatory/Retaliatory Dismissals

If a court finds that the dismissal was discriminatory/retaliatory, the dismissed employee is entitled to be reinstated to their previous position. Alternatively, the employee (at their sole discretion) may ask for an indemnity equal to 15 months of their salary to be paid in lieu of reinstatement.

In addition to the reinstatement, the dismissed employee is entitled to receive payment of the outstanding salary from the date of the dismissal until the day of reinstatement (at least five months’ salary), plus payment of the relevant social security contributions.

This protection is granted to employees with or without executive status, irrespective of the date of hiring and the number of employees employed by the employer.

Executives

In cases of unfair dismissal, executives are entitled to the protection granted by the NCBA applied ‒ ie, payment of an indemnity, the amount of which depends on the executive’s age and company seniority.

Employers with More Than 15 Employees

The protection granted by the law to employees depends on the hiring date.

Employees hired before 7 March 2015 are entitled to the following protection regime.

• If the dismissal is deemed by the court to be manifestly without grounds, the employer must:
1. reinstate the dismissed employee (or, alternatively, pay the above-mentioned indemnity in lieu of reinstatement);
2. pay the outstanding salary from the date of dismissal until the date of reinstatement (this amount is capped at 12 months of remuneration); and
3. pay the outstanding social security contributions.
• If the dismissal is deemed as “simply” without grounds by the court, the employer must pay the employee an indemnity ranging from 12 to 24 months of global remuneration (plus an indemnity in lieu of a notice period).
• If the dismissal has been served in violation of the mandatory procedure set forth by Article 7 of Law 300/1970 or Article 7 of Law 604/1966, the employer must pay the employee an indemnity ranging from six to 12 months of global remuneration (plus an indemnity in lieu of a notice period).

Employees hired after 7 March 2015 are entitled to the following protection regime.

• Reinstatement plus outstanding salary (capped at 12 months) and social security contributions, if a dismissal for just cause or justified subjective reasons is considered manifestly without grounds by the court. The above does not apply if employees hired after 7 March 2015 are dismissed for justified objective reasons.
• If the dismissal for just cause or justified subjective reason is considered by the court “simply” without grounds, or unlawful in case of dismissal for justified objective reasons, the employee is entitled to an indemnity ranging from six to 36 months of global remuneration (plus an indemnity in lieu of a notice period).
• In case of a breach of the procedure set forth in Article 7 of Law 300/1970 or a violation of the obligation to state the reasons for the dismissal in the dismissal letter, the employer must pay the employee an indemnity ranging from two to 12 months of global remuneration (plus an indemnity in lieu of a notice period).

Employers with 15 or Fewer Employees

Employees are entitled to receive an indemnity ranging from two-and-a-half to six months of global remuneration. If the employee has been hired after 7 March 2015, the indemnity ranges from three to six months of global remuneration.

The indemnity is increased to ten or 14 months of global remuneration for employees with long company seniority (between ten and 20 years) if they were hired before 7 March 2015.

Pursuant to Article 15 of Law 300/1970, employees may not be discriminated against on the basis of their race, gender, language, beliefs (political, religious, etc), age, sexual orientation or disadvantaged status.

Any action implemented by the employer in breach of the above-mentioned mandatory rule is null and void. As such, the employee is entitled to compensation for financial and non-financial damages. However, the onus to prove discrimination and the resultant damages lies solely with the employee.

The temporary measure allowing court proceedings to be held by video during the COVID-19 pandemic has been permanently implemented by Legislative Decree No 149/2022.

In particular, Article No 127 bis of the Italian Civil Procedure Code (ICPC) provides that the judge may order that the hearing be held by video when the presence of persons other than the attorneys, the parties, the public prosecutor and the judge’s assistants is not required.

The judge’s decision shall be communicated at least 15 days before the hearing itself and each party may request that the hearing be held in person within five days from the judge’s order.

The judge shall decide on the said request within the following five days, considering the necessity and significance of having the parties present for the hearing’s procedures.

Furthermore, Legislative Decree No 149 /2022 has introduced Article 196 quarter of the ICPC, mandating the electronic submission of all judicial documents, including appeals, pleadings and court orders.

Judicial claims related to employment relationships are subject to a special procedure and are tried before specialised courts or court sections.

No class action procedure is applicable in the case of employment issues; however, a proceeding could be brought by a multitude of claimants.

According to the ICPC, the ordinary employment judicial proceeding starts when the claimant files their legal summons before the court. The defendant must file their defences ten days before the date of the hearing scheduled by the court. Failure to meet this deadline can severely hinder the defendant’s ability to mount a defence.

During the first hearing, the court tries to settle the dispute.

Generally, labour judicial procedures are quicker than ordinary civil judicial procedures.

The final ruling may be challenged before a competent court of appeal, whose decision may be challenged before the Supreme Court.

Special procedures are applicable in cases of:

• dismissal of an employee hired before 7 March 2015;
• claims related to social security contributions;
• gender discrimination; and
• employers’ anti-union conduct.

In Italy, the option for parties to resort to arbitration is strictly governed. They can only turn to arbitration if permitted by the law or the applicable NCBA.

While arbitration as a means of alternative dispute resolution is very uncommon in Italy, there is a notable exception: employees contesting a disciplinary action taken by their employer, provided that this sanction does not involve dismissal.

According to Article 91 of the ICPC, in their final statement the judge may order the unsuccessful party to pay the counterparty an amount as reimbursement for legal expenses.

In the case of a settlement agreement, it is common practice for the employer to reimburse the employee’s legal expenses.