I Introduction

In addition to international and EU sources, employment in Italy is governed by a number of provisions contained in the Italian Constitution (e.g., Article 36 on fair and reasonable remuneration and Article 40 on the right to strike); the Italian Civil Code (ICC); state laws, among which the most important is Law No. 300/70 – the Workers' Statute; collective agreements operating at sector level, at territorial level and at company level; individual employment agreements; and, subject to certain requirements, common practices.

Collective agreements at any level play an essential role. Subject to some exceptions, they are legally applicable to the employment relationship only if an employee and employer are members of the contracting trade union and employers' organisation or if they have otherwise agreed to be bound by them. However, labour courts tend to refer to the applicable collective agreement when determining employees' rights, regardless of membership.

Sector-level agreements usually contain provisions covering almost every aspect of the employment relationship in the specific sector, such as the rights of the employee with regard to:

  1. minimum content of the hiring letter;
  2. duration of probationary periods;
  3. holidays, working time and overtime;
  4. sick and maternity leave;
  5. disciplinary matters;
  6. minimum salary and other employment-related benefits;
  7. termination and notice period;
  8. severance payments; and
  9. industrial relations.

They also indicate which specific aspects can be further negotiated at territorial and company level.

Special collective agreements regulate employment relationships with executives.

Collective provisions supplement the law and, subject to certain conditions, can derogate from the law. Terms and conditions of employment agreed in individual employment contracts cannot be less favourable than those set out in applicable collective agreements.

The Italian judicial system consists of a number of different courts. In general terms, criminal justice is administered by criminal courts, while civil courts hear civil cases. Employment disputes are heard by special sections of the civil courts, known as employment tribunals. These have jurisdiction over any dispute related to private and public workers, independent contractors and agents.

Ordinary labour proceedings start with the filing of a complaint by the applicant. The defendant must file a defensive brief no less than 10 days before the hearing. At the first hearing, the judge will attempt to settle the claim by making a formal settlement proposal to the parties. The parties must personally attend the hearing to discuss this settlement proposal and be cross-examined by the judge. If the parties do not accept the proposal, the process continues to the discovery procedure, which usually takes up to four hearings depending on the complexity of the case. The entire process may take between one and two years.

The employment section of the court of appeal hears appeals of employment tribunal decisions and the Supreme Court of Cassation hears further appeals on grounds of questions of jurisdiction, nullity of the previous decisions or nullity of the entire proceedings, lack of motivation of the previous decisions or breach of statutory provisions. In the case of a suspected breach of constitutional provisions, the parties can bring a claim before the Constitutional Court. Questions on the interpretation of laws giving effect to law deriving from the European Union may be referred to the European Court of Justice by any tribunal or court.

The enforcement of employment laws and regulations also lies with a number of government agencies and authorities. In particular, the National Social Security Agency is responsible for the correct payment of social security contributions by employers, and the National Insurance Agency monitors the correct payment of the contributions due by employers. Besides these two national agencies a number of other authorities (the provincial labour office, the local sanitary office, etc.) are responsible for compliance, such as with health and safety legislation, night work and overtime limits.


In 2018 there was a significant reversal regarding the regulations applicable to dismissals of employees with open-ended contracts hired on or after 7 March 2015, and requirements for the lawful recourse to temporary work. This reversal is the result of a labour market reform (the 2018 Reform; see Section IV.i) introduced by the newly elected government, in office since 1 June 2018, and reflects the ideology of the Five Star Movement, which significantly contrasts with that of the former government.2

In particular, greater importance has been given to open-ended employment contracts by introducing considerable restrictions to temporary work (e.g., fixed-term contracts). Regarding the protections afforded against unfair dismissals, any form of automatic calculation of compensatory damages exclusively based on employees' seniority has been declared unconstitutional (see Section III).


During 2018, the following notable cases appeared before the courts.

In Decision No. 194 rendered on 25 September 2018, the Constitutional Court declared unconstitutional the provision of Article 3 of Legislative Decree No. 23 of 4 March 2015, according to which, regarding dismissed employees hired on or after 7 March 2015, the amount of damages is exclusively linked to the employee's length of service (i.e., two months' salary for each year of service, from a minimum of four up to a maximum of 24 months' salary). The Constitutional Court stated that this system of automatic calculation of compensatory damages contravenes the principles of equality and fairness, and is in breach of the provisions set forth by the European Social Charter, according to which the dismissed employee must be granted appropriate compensation. As a consequence, in cases of unfair dismissal of employees hired on or after 7 March 2015, the damages shall be determined by equity, taking into account, in addition to the employee's length of service, the size of the employer and the general behaviour and conditions of the parties.

In Decision No. 29,582, rendered on 11 December 2017 and published in 2018, the Civil Court of Cassation clarified that, as regards the liability arising from the breach of health and safety obligations in executing service agreements, the principal cannot be held automatically responsible for any injury caused to the contractor's personnel assigned to perform the services. Notwithstanding Legislative Decree No. 81 of 9 April 2008, which requires the principal to assess any risks that may arise if the contractor's services interfere with the ordinary business activity, the principal is required to refrain from controlling, managing and directing the performance of these services.

Decision No. 1853 rendered on 10 September 2018 by the Tribunal of Milan and Decision No. 778 rendered on 7 May 2018 by the Tribunal of Turin, ruled for the first time on the status of riders working for food delivery companies and in particular on the gig economy (or platform worker) model. The rulings held that riders working for the food delivery companies Foodora and Glovo were independent contractors and not employees, mainly on the ground that they were free to accept or refuse work. In addition, the type of control and supervision carried out by the food delivery companies was not compatible with the employee status. It has been clarified that food riders cannot be categorised as subordinate employees as they are not required to comply with minimum daily or weekly working hours (and food delivery companies are not required to guarantee a minimum number of working hours). Also, according to aforementioned tribunals, setting up a website where food orders are placed, organising work shifts, and checking when the riders log in to the app and where their starting points are, are signs of coordination activity rather than the exercising of a hierarchical power over the food rider.


i Employment relationship

In principle, the parties are free to enter into an employment contract orally. In a dispute, however, the employer has the burden of proving the content of the employment contract; therefore, employment contracts are usually written. Given the extensive use of collective agreements, employment contracts usually consist of a simple hiring letter that refers to and incorporates the applicable collective agreements. In Italy, open-ended employment contracts are the most common type of employment contract.

Employers are required by law to provide employees with certain basic information before the job starts, including the names of the parties; place of work; hiring date; level of employment and duties assigned; duration of probationary period, if any; working time; and notice period. Generally, the employer will add this information to the hiring letter and give the employee a copy. It is common for executives to negotiate and include in the employment contract additional and more specific rights, benefits and obligations, such as restrictive covenants, confidentiality obligations and parachute obligations.

Subject to certain exceptions, changes or amendments to the employment agreement must be mutually agreed between the parties. Certain terms of the agreement, such as probationary periods and non-compete undertakings, must be in writing.

Under certain circumstances, an employer is entitled to unilaterally modify the employment terms and conditions originally agreed with their employees, pursuant to Article 2,103 of the ICC as recently amended by Legislative Decree No. 23 of 4 March 2015 in the framework of the Jobs Act Reform (see below). In very general terms, the employer is now entitled to modify its employees' duties without implying a change of employment level and category as set forth by the collective bargaining agreement. Moreover, if a corporate reorganisation affects the employment status of an employee, the employer is now entitled to assign the employee to one level lower, without a change in salary.

In 2010, a very long and important process was commenced, aimed at encouraging and simplifying the use of fixed-term contracts. In addition to a number of laws, the process culminated in Legislative Decree No. 81 of 15 June 2015, within the framework of the Jobs Act Reform. However, progress was halted with the enactment of Decree Law No. 87 of 12 July 2018, as subsequently amended by Law No. 96 of 9 August 2018, which implemented significant changes to the Jobs Act Reform.

Prior to the implementation of the above-mentioned laws, all fixed-term agreements could be executed without the indication of any cause, for a maximum overall term (including any extension up to a maximum of five times or renewal) of 36 months, unless otherwise provided for by the applicable national collective bargaining agreement. Following the 2018 Reform, the employer is not required to provide specific reasons to hire on a fixed-term basis, provided that the overall length of the agreement is no longer than 12 months. However, specific reasons are required in the following cases: fixed-term employment agreements longer than 12 months (up to a maximum of 24 months); extensions of fixed-term employment agreements (up to a maximum of four months over a period of 24 months) that exceed the aforementioned 12-month threshold; and renewals of fixed-term employment agreements.

Under the 2018 Reform, the reasons for executing a fixed-term agreement have to be related to one of the following: temporary and objective needs, unrelated to ordinary activities, or a temporary need to replace employees; and requirements connected to temporary and significant increases in ordinary activities, which could not be planned in advance.

The number of employees hired on fixed-term contracts must not exceed the threshold of 20 per cent of the number of employes with open-ended contracts, which applies as of 1 January of the relevant year of hiring, unless otherwise provided for by the applicable collective bargaining agreements. The threshold of 20 per cent does not apply, inter alia, with respect to the hiring of employees:

  1. for a start-up activity for the duration established by the NCBA; and
  2. for replacement or seasonal needs, including the seasonal activities set forth in Presidential Decree No. 1525/1963.

An employee can challenge the validity of a fixed-term contract by means of a written communication sent within 180 days of the contract's expiration and must file the claim with the competent employment tribunal within 180 days of submitting the challenge.

If a fixed-term contract is converted into an open-ended contract, the employer is required to pay damages on top of the reinstatement equal to an overall indemnity ranging from two-and-a-half to 12 monthly salaries. If the employer exceeds the maximum number of fixed-term employees, the following administrative sanctions apply: 20 per cent of salary for each month of work, which is increased to 50 per cent of salary if the number of workers hired in violation of the statutory threshold is more than one.

ii Probationary periods

Probationary periods are allowed in Italy. The length varies depending on the level of the employee and the applicable collective agreement. During the probationary period each party can withdraw from the contract without notice.

iii Establishing a presence

A foreign company is free to hire employees and engage consultants directly without setting up a subsidiary or branch in Italy. However, if the activities carried out in Italy amount to a permanent establishment for tax purposes, the setting up of a branch or a subsidiary is required. This usually happens when the services provided in Italy relate to the core business of the foreign company and are not merely preparatory or when the employees, consultants or agents are empowered to execute contracts that directly bind the company. In the latter scenario, the foreign company will also be liable for failure to fulfil the relevant obligations under the Italian tax laws and be subject to tax penalties.

A foreign company engaging employees without establishing a local entity must appoint an Italian company representative through a power of attorney, which is usually a payroll adviser.

The setting up of an Italian payroll is required as the foreign company must deduct social security contributions at source and pay these to the Italian social security authorities, whereas the employee is liable to pay income tax to the Italian tax authorities. In addition, notarised and legalised (by apostille) copies of the company's articles of incorporation, along with a good standing certificate attesting that it is registered with the local register of enterprises, if any, must be provided. These documents must be translated into Italian.

Even if the parties agree to subject the employment agreements to non-Italian law, mandatory Italian laws apply. These include rules relating to, inter alia, the minimum wage, working time, termination of the employment relationship and related compensation, health and safety in the workplace, 13th and 14th month allowances, and holidays.


Article 2,105 of the ICC imposes on the employee a duty of loyalty and fidelity during the employment relationship, which includes a non-compete obligation. Non-compete covenants after the termination of the employment relationship are regulated by Article 2,125 of the ICC. This provision requires the parties to enter into a written agreement, which can be made either at the time of or after the hire.

Under Article 2,125 of the ICC, the non-compete covenant:

  1. cannot be for a term exceeding three years for employees and five years for executives;
  2. must indicate the territory in which the covenant applies – this cannot cover an area so wide as to deprive the employee of the opportunity to carry out any further working activity; and
  3. must provide for consideration.

The employer is free to choose whether to pay such consideration during or at the end of the employment relationship. If paid during employment, the consideration usually amounts to 15 per cent to 25 per cent of the monthly salary; it is paid in addition to the monthly salary and is subject to social security contributions. If paid after employment, the consideration usually amounts to 30 per cent to 40 per cent of the last annual salary multiplied by the years of non-competition and it is not subject to social security deductions. Opting in after the termination of the employment relationship contained in the covenant is usually deemed null by the courts.


i Working time

Italian law provides for a standard 40-hour working week. Sector-wide collective agreements may modify the standard working time and also provide for a working time limit to be calculated as an average over a period not exceeding one year. This allows employers to exceed the standard working time in certain periods of the year and to reduce it through an offset in other periods, without the excess being considered overtime. In any case, the average working time cannot exceed 48 hours (including overtime) for each seven-day period and a daily rest of at least 11 consecutive hours must be guaranteed to the employee.

Night work cannot exceed eight hours every 24 hours. Sector-wide collective agreements are free to extend the reference period of 24 hours provided that the average time worked does not exceed one-third of the total time over the extended reference period.

ii Overtime

Any work performed in excess of 40 hours per week constitutes overtime. In the case of multiple shifts, any work that exceeds the planned daily working time is overtime.

Overtime is usually compensated by an increased rate of pay, ranging from 15 per cent to 50 per cent depending upon the collective agreement and when the overtime takes place (e.g., day or night). However, collective agreements are free to compensate overtime with additional leave.

When overtime is regulated by sector-wide collective agreements, working time and overtime cannot exceed 48 hours per week. In the absence of collective regulation, the law provides for a limit of 250 hours per year and requires the consent of the employee to work overtime. Unless otherwise provided for by collective provisions, overtime is not subject to limits in the case of exceptional technical production needs, force majeure and particular events to be previously notified. Overtime regulations do not apply to executives, employees performing managerial duties, family workers, employees performing sporadic duties (e.g., doormen or concierges), homeworkers and teleworkers.


In Italy, employers may directly recruit employees, including foreign nationals, provided that the recruiting procedures followed are not discriminatory against potential employees. EU nationals with a valid passport, or other equivalent document, may enter Italy without a visa and stay up to 90 days. These nationals do not need a work permit to perform work in Italy and can be recruited directly by the employer.

A number of additional requirements apply if the prospective employee is a non-EU national. The employer must apply to the Immigration Office at the Prefecture (the Immigration Office) for a work permit. With the exception of managers and highly specialised workers, the issue of a work permit is conditional upon the Immigration Office being satisfied that the vacancy cannot be properly filled by any other EU or non-EU nationals already residing in Italy and enrolled with the Labour Office, and that the hiring does not exceed the immigration threshold set every year by the Ministry. Once the work permit is obtained, it is forwarded to the Italian consulate abroad for the employee to apply for a work visa. Within eight days from his or her entry into Italy, the employee must sign the residence contract and apply to obtain a residence permit. The permit has a duration of two years in the case of open-ended employment relationships and can be renewed if the employment contract is still pending at the expiry date of the residence permit.

The employer is free to apply either Italian law or a foreign law to regulate the employment relationship. If, however, the employer chooses the foreign law, mandatory Italian law will still apply (see Section IV). Also, the employer must deduct taxes and social security contributions at source and pay the same to the Italian tax and social security authorities.

In addition to direct recruitment, foreign workers may also work temporarily for an Italian employer under a secondment agreement. EU nationals are not required to comply with any visa requirements. Non-EU nationals must obtain a visa, which is not, however, subject to the immigration threshold. The seconding company is liable to deduct taxes and social security contributions at source and pay the same to the Italian tax and social security authorities, unless otherwise provided by international, EU or bilateral agreements.

Also, by means of the Legislative Decree No. 108 of 28 June 2012 implementing Directive 2009/50/CE, non-EU nationals who are highly qualified may obtain a visa that is not subject to the immigration threshold (the EU Blue Card).

Finally, European regulations (Directive 2014/67/EC concerning the secondment of employees in the EU) have been enacted to ensure more control and better protection for posted employees. In Italy, the Directive has been implemented by the Legislative Decree No. 136 of 17 July 2016 providing for new obligations in terms of advance communication, and imposes material sanctions in the event of breach, as well as new measures aimed at preventing unlawful secondment of employees. The Decree applies to any Member State's company seconding one or more employees to another company – even belonging to the same group – or to another business unit, as well as to temporary agency workers hired by temporary work agencies established in a Member State and seconding their employees to a user company with its registered office or a business unit in Italy.

Directive (EU) 2018/957 on transnational secondment has not yet been implemented in Italy.


Article 2,104 of the ICC permits employers to implement internal discipline rules. Implementation requires no prior consultation with, or approval from, trade unions, works councils, employees' representatives or any government authority (it may, however, be advisable where a works council exists to discuss the envisaged implementation of the code of conduct so as not to harm working relations). There is no need to obtain the employees' signatures to evidence their acceptance of the code.

The employer's power to unilaterally impose rules of conduct is subject to a number of limitations provided by the Constitution (such as the principle of equality and non-discrimination and the right of defence), the laws and collective agreements.

If there is a breach of the code of conduct, the employer may apply disciplinary sanctions provided that they comply with Article 7 of the Workers' Statute. To lawfully discipline an employee, the employer must take the following steps. First, the employer must give adequate notice of the disciplinary rules by displaying them in a place accessible to all employees. Second, the grounds for the disciplinary action must be clearly stated; any sanction that is more serious than a verbal reprimand can only be made at least five working days after a written warning has been given to the employee. Third, disciplinary sanctions (suspension with or without pay, dismissal, etc.) must be proportionate.

As such, a code of conduct, as well as any global policies, should be posted within the employer's premises and an Italian translation should be provided so employees are aware of and understand the code. Since the Workers' Statute expressly requires the display of the code of conduct, any other form of distribution of the document (such as via the company intranet) may be deemed insufficient by an employment tribunal if the employee challenges the sanctions.


There is no legal obligation to translate employment documents into Italian or the employee's native language. However, it is recommended for employers to make employees sign employment documents in both Italian and their native language. It is also advisable to include in these documents a clause indicating which language shall prevail in case of discrepancies in interpretation.

In general terms, it is advisable to provide a translation of all employment documents that mention specific obligations for employees or employers (e.g., employment contracts, stock options and incentive plans, restrictive covenants, general policies). Exceptions should be evaluated case by case, when the employer is satisfied that the employee is able to fully understand the terms and conditions of employment even though they are provided in a foreign language (e.g., bilingual employees, top executives).

Failing to translate employment documents into an employee's native language may result in the unenforceability of the provisions contained therein. It may also expose the employer to possible claims for damages (especially when incentive and bonus plans are concerned), unless the employer satisfies the court that the employee was fully aware of the terms and conditions regulating his or her employment relationship.


In Italy, the establishment of works councils is regulated by certain provisions of the Constitution, the Workers' Statute and the Interconfederal Agreements dated 23 July and 20 December 1993 (the Interconfederal Agreements). As a result of this system, it is now possible to have two main forms of workers' representation in the workplace: business union representation (RSA) and unitary union representation (RSU).

According to Article 19 of the Workers' Statute, an RSA may be appointed in industrial and commercial businesses that have more than 15 employees in the same unit or in the same municipality. Before Decision No. 231 of the Constitutional Court (3 to 23 July 2013), only the unions that executed a collective agreement applicable in the workplace were entitled to be qualified as an RSA. After this judgment, the entitlement was extended to RSAs that, despite failing to sign up to the collective agreement applied by the employer, actively participated in the negotiations of the same agreement.

The Interconfederal Agreements regulate the establishment of an RSU. The election of an RSU is not mandatory. Where there are more than 15 employees in the same workplace, the employees may elect an RSU to represent their interests. The initiative for the election must be taken by the main trade unions (CGIL, CISL and UIL), the trade unions that signed the applicable collective agreement or other trade unions meeting certain requirements.

All employees (excluding executives) who are employed on the day of the election and who have successfully completed their probationary period are entitled to vote. The election is valid if a majority of employees entitled to vote cast their votes. The number of members of an RSU varies depending upon the size of the business.

One-third of the members of an RSU are appointed from among the candidates presented by the trade unions that signed the applicable collective agreement, while two-thirds are elected from among the candidates presented by the other trade unions. RSU representatives may hold office for three-year terms and may be re-elected.

Italian law does not provide for periodical meetings to be held with the works council. However, the Workers' Statute provides for a number of duties the employer has to comply with. Among others, the Workers' Statute prohibits the employer from discriminating against any employee for reason of trade union membership and trade union activities; it also provides that the transfer of internal trade union representatives is subject to the prior consent of the relevant national trade unions they belong to and that the representatives have a right to paid and unpaid time off to carry out trade union activities.

The law and collective agreements also give works councils the right to be informed and to be consulted on certain events regarding the business organisation (such as mass lay-offs, or resorting to the special public wage-guarantee fund). Following the implementation of Directive 2002/14/EC, collective agreements also provide for the ongoing obligation of the employer to inform and consult with works councils over specific matters.


Employers must comply with the obligations on data processing included in the Privacy Code (Legislative Decree No. 196/2003), as amended by Legislative Decree No. 101/2018 on the harmonisation of Italian data protection provisions with the new obligations and changes introduced, from 25 May 2018, by Regulation (EU) No. 679/2016 (the General Data Protection Regulation (GDPR)). One of the controller's duties is to appoint a data protection officer (DPO). The controller is required to appoint a DPO only in certain cases, outlined in the GDPR, in which the processing is carried out for specific purposes or for specific categories of data. For example, the processing may be carried out by a public authority or body (except for courts acting in their judicial capacity); the core activities of the controller may consist of processing operations that require regular and systematic monitoring of data subjects on a large scale; or the core activities of the controller may consist of large-scale processing of special categories of data, or personal data relating to criminal convictions and offences. The DPO can be a staff member of the controller, or fulfil the tasks on the basis of a service contract. While the appointment of a DPO is required only in some cases, the delivery – orally or in writing (in this latter case, the controller must retain evidence of its delivery) – of the information notice to the data subject (applicant, employee, etc.) is always necessary. When the personal data are collected directly from the data subject (e.g., when the employment relationship is established), the notice must include:

  1. the identity and contact details of the controller and, for controllers established outside the European Union, of the controller's representative;
  2. the contact details of the DPO, where applicable;
  3. the purposes for processing the data as well as the legal basis for processing, including the legitimate interests pursued by the controller or by a third party;
  4. the recipients or categories of recipients of the personal data, if any;
  5. where applicable, the transfer of personal data to a non-EU country or international organisation and the existence or absence of an adequacy decision by the European Commission, or reference to the appropriate or suitable safeguards adopted by the controller to lawfully carry out the transfer and the means by which to obtain a copy of them or where they have been made available;
  6. the period for which the data will be stored, or if that is not possible, the criteria used to determine that period;
  7. the data subject's rights;
  8. where the processing is based on consent, the existence of the right to withdraw consent at any time, without affecting the lawfulness of processing based on consent before its withdrawal;
  9. the right to lodge a complaint with a supervisory authority;
  10. whether the provision of personal data is a statutory or contractual requirement, or a requirement necessary to enter into a contract, as well as whether the data subject is obliged to provide the personal data and of the possible consequences of failure to provide such data; and
  11. 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 data processing for the data subject.

In addition, the processing of personal data may require the consent of the data subject. The consent is valid only if it is given freely and specifically, and is provable. In this respect, however, the EU authorities do not recommend that employers ask directly for employees' consent, as employees are considered 'vulnerable subjects'. Consent is not required, inter alia, when the data is necessary for the performance of a contract to which the data subject is party; when the data is necessary for compliance with a legal obligation to which the controller is subject; or when the data is necessary for the purposes of the legitimate interests pursued by the controller or by a third party.

Sensitive data, defined in the GDPR as 'particular categories of data', may be processed with the written consent of the data subject or if, for example, the data is necessary for the purposes of carrying out the obligations and exercising specific rights of the controller or of the data subject in the field of employment and social security and social protection law, insofar as it is authorised by the European Union or national law, or a collective agreement pursuant to national law.

The GDPR grants to the employee the right to access his or her personal data. This must be easy and free. The employer is required to adopt adequate security measures, namely security measures that, based on technical progress, prove to be adequate to avoid any risk of destruction, loss or unauthorised access of the data, taking into account the state of the art, the costs of implementation and the nature, scope, context and purposes of processing. Transfers to non-EU countries are subject to some conditions, including:

  1. the consent of the data subject (provided that, if there is no adequacy decision or appropriate safeguards, he or she is aware of the possible risks of the transfer);
  2. the necessity of the transfer for the execution of an agreement to which the data subject is a party or the implementation of pre-contractual measures taken at the data subject's request; and
  3. the necessity of the transfer in order to establish, exercise or defend legal claims.

The transfer of data to third countries is, however, always allowed if the controller has implemented the measures provided by the GDPR (e.g., standard contractual clauses approved by the European Commission or binding corporate rules) or if there is an applicable EU decision (e.g., Swiss and Canadian authorisations, American companies adhering to the Privacy Shield principles). In such cases, no further action to seek consent (with the exception of the information notice) is required.

There are also restrictions on background checks. From both a privacy and a labour standpoint background checks may only be carried out provided that:

  1. the purposes of the investigation are previously identified and are legitimate;
  2. the relevant information is not excessive in relation to its purpose; and
  3. the data to be collected is strictly related to the functions and responsibilities connected to the employment relationship.

The investigations must be preceded by an adequate information notice to the applicant or employee illustrating some details of the data processing and in some cases requesting express consent. Judicial data (e.g., criminal records) may be collected only if there are laws or regulations authorising its processing.


i Dismissal

Subject to limited exceptions, employees may only be dismissed with cause. This may consist of a just cause or of justified reasons for dismissal. Just cause arises if serious misconduct occurs, affecting the feasibility of the continuation of the employment relationship. When dismissed for just cause, the employee is not entitled to any notice period but retains the right to obtain other termination indemnities (i.e., compensation for termination, which is payable upon termination regardless of the reason of the termination; the pro rata amounts of the 13th and 14th month allowance; unused holiday and leave).

Justified reason arises if there is a serious breach by the employee of his or her contractual obligations (subjective justified reasons), such as failure to comply with the employer's instructions, repeated unjustified absence from work or, in the event of reorganisation (objective justified reasons), abolition of a job position arising out of a reorganisation (Article 2118 ICC). When dismissed for a justified reason, the employee is entitled to notice provided for in the applicable collective agreements or a payment in lieu in addition to the other termination indemnities. The employer must also consider redeployment before dismissal for a justified reason is implemented.

The Jobs Act Reform introduced a complex system in terms of legal consequences arising from unfair dismissal. This system has been modified following the implementation of the 2018 Reform. In particular, the consequences for the employer are different, depending on whether there are more than 15 employees per production unit (or more than 60 employees as a whole) and whether the dismissed employee was hired before, on or after 7 March 2015.

ii Dismissals based on discriminatory reasons or in breach of other mandatory provisions

Regardless of the hiring date and the number of employees, if the dismissal is based on discriminatory reasons, or is carried out in violation of certain mandatory provisions of law (e.g., the rules on parenthood) or is not implemented in writing, the employers shall be subject to reinstatement of the employee and payment of damages equal to the salary accrued from dismissal until reinstatement (a minimum of five months' salary).

iii Disciplinary dismissals

Regardless of the hiring date and provided that the employer is staffed with more than 15 employees, if the court ascertains that the disciplinary dismissal was based on conduct that did not actually occur, the employer shall be obliged to reinstate the employee and pay damages of up to 12 months' salary. With regard to employees hired before 7 March 2015, the aforesaid reinstatement protection also applies if the same conduct should have been sanctioned with a less serious penalty under the applicable collective agreement.

In any other cases where disciplinary dismissals are deemed unlawful (e.g., the judge determines that the employee's misconduct did not justify his or her dismissal), the employee is entitled to compensatory protection and no reinstatement is applicable. Compensatory damages vary depending upon the hiring date.

As mentioned in Section IV.i, under the Jobs Act Reform, with particular regard to employees hired on or after 7 March 2015, damages were linked to the employee's length of service – namely, two months' salary for each year of service (a minimum of four months' up to a maximum of 24 months' salary). However, under the 2018 Reform, the indemnity for unlawful dismissal ranges from a minimum of six months' salary to a maximum of 36 months' salary. Following Decision No. 194, rendered on 25 September 2018 by the Constitutional Court, in case of unfair dismissal, the indemnity shall be determined by equity, taking into account, in addition to the employee's length of service, the size of the company and the general behaviour and conditions of the parties. For employees hired before 7 March 2015, the compensatory damages range between 12 and 24 months' salary, and are assessed on the basis of judges' discretionary criteria.

iv Economic dismissals

In case of dismissal based on an economic reason, and provided that the employer is staffed with more than 15 employees, should the alleged economic reason be declared as clearly non-existent and if the employee was hired before 7 March 2015, the employer can be subject to reinstatement and payment of damages up to 12 months' salary. Otherwise, in the event that the court does not intend to apply the aforesaid sanctions, or the lack of the organisational or business reason is not straightforward, the employee will be entitled to damages only, ranging between 12 and 24 months' salary.

With respect to employees hired on or after 7 March 2015, no reinstatement protection applies and the employer can be subject to pay compensation in compliance with the criteria set forth by the 2018 Reform (see subsection iii).

If the employer employs 15 or fewer employees, the dismissed employee (for economic or disciplinary reasons) is not entitled to reinstatement, but is entitled to the payment of damages ranging between three and six months' salary.

In any case, employees cannot be dismissed while pregnant or for one year after giving birth. The same protection is afforded to the father in the event of the mother's death or disability or if he has been granted legal custody of the child. This protection is not afforded if the company is wound up.

The employee must challenge the dismissal within 60 days of the date of receipt of the written communication of termination and to file a claim with the competent employment tribunal within the following 180 days. For individual dismissals, an employer need not notify unions, nor is the submission of a social plan required.

Special rules apply to executives. While they are also not entitled to reinstatement in case of dismissal without cause, they are entitled to claim damages in addition to the notice period and termination indemnities, which varies depending on the length of service and the grounds for dismissal.

v Redundancies

Pursuant to Law No. 223/1991, if a dismissal plan concerns (1) at least five redundancies within 120 days, or (2) companies staffed with more than 15 employees, the employer must give prior notice to all relevant trade unions indicating the reasons for the proposed redundancies, the number of and description of the employees to be affected, and the date on which the envisaged dismissals will be effected. The unions may call for consultation with the employer within seven days from receipt of the notice to request a detailed explanation of the need for redundancies and to discuss possible alternative solutions.

If within 45 days of receipt of the notice an agreement with the unions is not reached, the local, regional or central labour office, as the case may be, will mediate for a further period of up to 30 days. These negotiations will consider:

  1. the positions to be made redundant;
  2. the possible relocation of employees to other business units;
  3. the possible redeployment of employees;
  4. the possibility of entering into a government-funded job saving scheme;
  5. the provision of an enhanced severance payment to mitigate the effect; and
  6. an application for other redundancy funds ('social shock absorbers').

Often, the enhanced severance payment referred to in point (e) is offered in exchange for the execution of a settlement agreement providing for the employees' waiver of any claims.

Law No. 223/1991 provides for mandatory selection criteria to be followed in choosing the employees to be made redundant (upon completion of the unions consultation procedure). Pursuant to Law No. 223/1991, the employer must consider, inter alia, the length of service (in the same company) of the concerned employees, their family responsibilities, and any other technical, production and organisational needs.

After the enactment of Law No. 161 of 30 October 2014, the rules provided for by Law No. 223/1991 also apply to executives whose contracts are terminated within a collective dismissal process, who therefore must be selected in accordance with the aforesaid social selection criteria. Also, it follows that the executives to be dismissed must be included in the five-redundancies threshold.


Article 2112 of the ICC provides that in the case of a transfer of business, the employment relationship continues with the transferee and the employees maintain the same terms of employment by operation of law. The transferor and the transferee are jointly and severally liable with respect to the employees' vested rights at the time of the transfer, unless the transferor has been discharged by the concerned employees according to a special waiver procedure. The transfer of business does not in itself represent a justified reason for dismissal. Employees that have suffered a material change as a result of the transfer may resign for cause within three months from the date of transfer and are entitled to payment of an indemnity equal to the amount they would have received in the event of a dismissal without notice.

This protection applies in any case in which the transfer of business entails a change of employer, including the case of transfer of a going concern and merger. Special rules apply in the case of a bankruptcy, insolvency or winding-up of the company transferring the business.

Subject to certain requirements, the transfer of business is conditional on a previous information and consultation procedure to be complied with by the transferor and transferee with the relevant trade unions. The employee must challenge the validity of the transfer within 60 days of the date of the transfer and file the claim with the competent employment tribunal within the subsequent 180 days.


The principal aim of the 2018 Reform is to ensure the stability of employees' jobs by reverting to the previous labour market inspired by labour flexibility. As a result, more restrictions will be imposed on employers, reducing their flexibility in managing employment relationships in accordance with their business needs. However, as the Reform has only recently been implemented, the outlook for 2019 with regard to employment law is uncertain.


1 Raffaella Betti Berutto is a partner at Gianni, Origoni, Grippo, Cappelli & Partners.

2 The Five Star Movement is a political party in Italy, whose ideology is considered populist and anti-establishment. It gained the largest number of votes in the 2018 general election.