The Employment Law Review: Italy


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, of which the most important is Law No. 300/70 – the Workers' Statute; collective agreements operating at sector, territorial and company levels; individual employment agreements; and, subject to certain requirements, common practices.

Collective agreements at any level have 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 periods;
  8. severance payments; and
  9. industrial relations.

They also indicate which specific aspects can be further negotiated at territorial level and at 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 to employees 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 and 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 relating 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 fewer 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 Court of Justice of the European Union 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 from employers. Besides these two national agencies, a number of other authorities (including provincial labour offices and local health offices) are responsible for compliance, such as with health and safety legislation, night work and overtime limits.

Year in review

The year 2021, like the year 2020, was significantly affected by the spread of the coronavirus. The resulting pandemic has created a serious crisis that, as far as employment-related issues are concerned, continued to be managed in Italy, for most of the past year, by means of complex emergency legislation with the aim of, first, preventing employers from implementing collective and individual dismissals based on economic reasons and, second, making available different types of social shock absorbers, for the purpose of integrating salaries in proportion to suspensions or reductions of working activity.

Other emergency measures have been adopted for, by way of example, the larger-scale implementation, through a simplified process, of smart working (lavoro agile).

As at December 2021, the great majority of the above-mentioned measures have been discontinued, in the hope of a gradual return to normality.

Significant cases

The following notable cases appeared before the courts during 2021.

In Decision No. 18135 of 24 June 2021, the Court of Cassation clarified that a claim regarding the existence of a corporate group to be deemed as a single employing entity is grounded provided that (1) there is a single structure, from a productive and organisational standpoint, (2) there is integration among the different activities carried out by the companies in the group and a common interest, (3) there is technical, administrative and financial coordination among the group companies so as to identify a single entity exercising direction and control, and (4) employees perform their working duties to the benefit of the various group companies.

In Decision No. 32473 of 8 November 2021, the Court of Cassation clarified that in the event of injuries that occur during a coffee break outside the workplace, the mandatory insurance indemnification provided for by the Italian agency for insurance premiums (INAIL) does not apply.

Basics of entering an employment relationship

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 the 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 unilaterally to modify the employment terms and conditions originally agreed with their employees, pursuant to Article 2,103 of the ICC as 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 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 entitled to assign the employee to one level lower, without a change in salary.

A very long and important process as regards the recourse to fixed-term contracts started in 2010. 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.

Following the 2018 Reform, an 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 more 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; or 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 employees 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 with respect to, inter alia, the hiring of employees:

  1. for a start-up activity for the duration established by a national collective bargaining agreement; 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 due date of the contract's expiry, 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 of between two-and-a-half and 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 and the length varies depending on the level of seniority 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 concern 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 situation, 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 certificate of good standing 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-month and 14th-month allowances, and holidays.

Restrictive covenants

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 agreed after the termination of an 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 hiring or afterwards.

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

  1. must be for a term not exceeding three years for employees and not exceeding 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 consideration during or at the end of the employment relationship. If paid during employment, the consideration usually amounts to between 15 per cent and 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 between 30 per cent and 40 per cent of the last annual salary, multiplied by the number of years of non-competition, and 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 for a period not exceeding one year. This allows employers to exceed the standard working time at certain times of year and to reduce it through an offset at other times, 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 employees must be guaranteed a daily rest period of at least 11 consecutive hours.

Night work cannot exceed eight hours in 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 during 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 on 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.

Foreign workers

Employers in Italy 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 for 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 on 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 of 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 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 Legislative Decree No. 108 of 28 June 2012 implementing Directive 2009/50/EC,2 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 European Union) have been enacted to ensure more control and better protection for posted employees. The Directive has been implemented in Italy by 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 and new measures aimed at preventing unlawful secondment of employees. The Decree applies to a company in any Member State that is 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 been implemented in Italy by means of Legislative Decree No. 122 of 15 September 2020, effective as of 30 September 2020 and according to which, among other things, employees posted in Italy must benefit from the same employment terms and conditions that apply to Italian employees performing the same duties, as provided for by the laws and collective bargaining agreement at national and local levels, provided they are more favourable. These provisions apply also to temporary work agencies within the European Union.

Global policies

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 be advisable, however, 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), 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, an 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, and dismissal, among others) must be proportionate.

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 (if necessary) so that employees are aware of the code and understand it. Since the Workers' Statute expressly requires that the code of conduct is displayed, any other form of distribution of the document (such as via the company intranet) may be deemed insufficient by an employment tribunal if an employee challenges the sanctions.

Parental leave

Mandatory protections are granted to working mothers and fathers as a consequence of their parental status. In particular, according to Legislative Decree No. 151 of 26 March 2001, pregnant employees are prohibited from working during the two months preceding the expected date of birth and the three months following the birth of the child (mandatory maternity leave). The employee can opt to postpone the mandatory maternity leave by one month, if there is no health risk for her or the baby in doing so. Broader mandatory abstention applies in the case of risks to the health of the mother or the child (or both).

Individual and collective dismissals of female employees during pregnancy and for one year after the birth of the child are null and void, irrespective of whether the employer was aware of the employee's pregnancy. The only exceptions to this general ban are just cause of dismissal, closing down of the employer's activities or of the business unit where the working mother works, termination of a fixed-term contract, and failure to successfully complete a probationary period. The same protection against dismissal is afforded to the father, in the event of the mother's death or disability, or if he has been assigned the relevant custody.

The prohibition against dismissal commences on the date on which the employee becomes or is deemed to be pregnant. A woman is deemed to have become pregnant 300 days prior to the expected date of birth as specified on a doctor's certificate.

In addition to mandatory maternity leave, during the first 12 years of a child's life, working mothers are entitled to take a further period of leave, for each child, up to a maximum of 10 months, depending on the number of months of absence requested by the father. The parents may abstain from work for consecutive periods or even on a hourly basis, subject to compliance with certain procedural rules. Moreover, an employee can ask her or his employer for a full-time employment agreement to be changed to a part-time one in lieu of parental leave. The employer is under a duty to allow such a change within 15 days of the request.

During the mandatory leave period, the parents are entitled to an indemnity, to be paid by the national social security institute (the INPS) (80 per cent of the average daily salary for mandatory absence and 30 per cent for optional absence). Usually, this indemnity is anticipated by the employer and then offset by future payments to the INPS.


There is no legal obligation to translate employment documents into Italian or the employee's native language. However, it is recommended that employers should require employees to 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 the event of any 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 in each 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 or top executives).

Failure to translate employment documents into an employee's native language may result in it being impossible to enforce 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.

Employee representation

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 possible to have two main forms of workers' representation in a 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 where there are more than 15 employees in the same unit or in the same municipality. Before Decision No. 231 of the Constitutional Court (3-23 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. If 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 votes are cast by a majority of the employees who are entitled to vote. The number of members of an RSU varies depending on 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 with which the employer has to comply. Among other things, the Workers' Statute prohibits an 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 about 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,3 collective agreements also provide for the ongoing obligation of the employer to inform and consult with works councils on specific matters.

Data protection

i Requirements for registration

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. 2016/679 (the General Data Protection Regulation (GDPR)). One of the duties of a data controller is to appoint a data protection officer (DPO). The data 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 data controller, or fulfil the tasks on the basis of a service contract. Although the appointment of a DPO is required only in some cases, delivery of the information notice – orally or in writing (note that if it is in writing, the controller must retain evidence of its delivery) – 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 data 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 and the legal basis for processing, including the legitimate interests pursued by the data 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 carry out the transfer lawfully 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 the possible consequences of failure to provide the 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 when the data is necessary for, inter alia, (1) the performance of a contract to which the data subject is a party, (2) compliance with a legal obligation to which the controller is subject, or (3) the purposes of the legitimate interests pursued by the data controller or by a third party.

ii Cross-border data transfers

The transfer of data to third countries is always allowed if the data 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, US companies adhering to the EU–US Privacy Shield principles). In such cases, no further action to seek consent (with the exception of the information notice) is required.

iii Sensitive data

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 data controller or of the data subject in the field of employment and social security and social protection law, insofar as it is authorised by EU law 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 to do and free of charge. 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 a number of 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 to establish, exercise or defend legal claims.

iv Background checks

From both a privacy and a labour standpoint, background checks may only be carried out when:

  1. the purposes of the investigation have already been identified and are legitimate;
  2. the relevant information is not excessive in relation to its purpose; and
  3. the data to be collected relates strictly 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 that illustrates some details of the data processing and in some cases requests express consent. Judicial data (e.g., criminal records) may be collected only if the processing of the data is authorised by laws or regulations.

Discontinuing employment

i Dismissal

Subject to limited exceptions, employees may only be dismissed with cause, which may consist of either a just cause or justified reasons.

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, which is payable on termination regardless of the reason for the termination; the pro rata amounts of the 13th-month and 14th-month allowance; and unused holiday and leave).

Justified reason arises if there is a serious breach by the employee of his or her contractual obligations (subjective justified reason), such as failure to comply with the employer's instructions, repeated unjustified absence from work or, in the event of reorganisation (objective justified reason), abolition of a job position arising out of a reorganisation (ICC, Article 2118). When dismissed for a justified reason, an employee is entitled to notice as 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.

Dismissal for discriminatory reasons or in breach of other mandatory provisions

Regardless of the hiring date and the number of employees, if a dismissal is based on a discriminatory reason, 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 employer shall be required to reinstate the employee and pay damages equal to the salary accrued between the date of dismissal and reinstatement (subject to a minimum of five months' salary).

Disciplinary dismissal

Regardless of the hiring date and provided that the employer has more than 15 employees, if the court ascertains that a 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 an applicable collective agreement.

In any other cases where disciplinary dismissals are deemed unlawful (e.g., a 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 on 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 a 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.

Economic dismissal

If a dismissal is based on an economic reason, and provided that the employer has 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 required to reinstate the dismissed employee and pay damages equivalent to up to 12 months' salary. Otherwise, in the event that the court does not intend to apply the aforesaid sanctions, or an organisational or business reason for dismissal is not straightforward, the employee will be entitled to damages only, equivalent to 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 required to pay compensation in compliance with the criteria set forth by the 2018 Reform (see 'Disciplinary dismissal', above).

If the employer has 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 of 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.

A employee must challenge his or her 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. Although they are not entitled to reinstatement if dismissed without cause, they are entitled to claim damages in addition to the notice period and termination indemnities, which vary depending on the length of service and the grounds for dismissal.

ii Redundancies

Pursuant to Law No. 223/1991, if a dismissal plan concerns (1) at least five redundancies within 120 days, or (2) companies 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 of receipt of the notice to request a detailed explanation of the need for redundancies and to discuss possible alternative solutions.

If no agreement with the unions is reached within 45 days of receipt of the notice, 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), above, 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 (on completion of the union's 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 as part of 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 within the threshold of five redundancies.

Transfer of business

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 in accordance with a special waiver procedure. The transfer of business does not in itself represent a justified reason for dismissal. Employees who have suffered a material change as a result of a transfer may resign for cause within three months of 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 a transfer of business entails a change of employer, including the transfer of a going concern and a merger. Special rules apply in the event of a bankruptcy, insolvency or winding up of the company transferring the business.

Subject to certain requirements, the transfer of business is conditional on the transferor and transferee having complied with the requirements for an information and consultation procedure 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 a claim with the competent employment tribunal within the following 180 days.


It is hoped that 2022 will be a year of economic recovery if a targeted labour market reform is seriously implemented, in line with EU and global market expectations. The guidelines of such a reform have been drafted within the context of, and in compliance with, the National Recovery and Resilience Plan that, as regards the Italian labour market, focuses mainly on the strengthening of the active labour market policies and vocational training, supporting the empowerment of women, fostering social inclusion, facilitating participation in the labour market and fighting undeclared employment between now and 2025.


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

2 Council Directive 2009/50/EC of 25 May 2009 on the conditions of entry and residence of third-country nationals for the purposes of highly qualified employment.

3 Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community – OJ L 080/29.

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