The Labour and Employment Disputes Review: Italy


In Italy, employment courts are the sole forum for resolving employment disputes. The only employment-related matters handled by the civil courts are those between social security institutions and employers for fines arising from the absence of social security payments.

Civil matters that should ordinarily be decided by a civil court will be resolved by an employment court if they are connected to an employment matter (for example, insurance matters relating to an accident at work).

Arbitration procedures are authorised only if the employee accepts or starts himself or herself the arbitration procedure for the same reason.

Employment law is a separate set of laws (which sometimes disregards the ordinary principles of civil law) and is based on the principle of the 'weakness' of the employee with respect to the employer's position of strength.

The following constitute the sources of Italian employment law:

  1. the Italian Constitution, which established the framework and principles of Italian law in 1948;
  2. Law No. 300/1970 (the Workers' Statute), which was significantly amended in May 2015 by Law No. 183/2014 (part of a set of laws and legislative decrees known as the Jobs Act) – a wide-ranging reform implementing a number of legislative decrees;
  3. other mandatory employment laws, such as Legislative Decree No. 81/2008, dealing with health and safety at work; the maternity law; the working-time law; the 'smart working' law; and several other laws regarding pensions and accidents at work;
  4. Law No. 68/1999, regarding mandatory recruitment of disabled employees, amended with effect from 1 January 2018, and Law No. 104/1992 regarding paid leave to assist disabled relatives, amended in 2015 (Italian labour lawyers are very often asked to assist employers with both of these);
  5. Law 276/2003 (Article 29) regarding the rights of the contractors and subcontractors' employees towards the principal;
  6. collective bargaining agreements at national, regional or company level in national collective labour contracts (CCNLs) and local company-level collective bargaining agreements (CBAs): such contracts can derogate from mandatory employment law in certain cases, including when dealing with important crises. These agreements set out the main common rules for each industrial sector regarding matters such as salary levels, working hours, overtime, annual paid leave, sick leave and disciplinary rules; and
  7. individual contracts: these generally contain one or two pages dealing only with the applicable CCNL; the employee's job title and grade (executive, middle manager or white-collar or blue-collar employee); the mandatory basic salary level (chosen from those stated in the CCNL); the starting date; the working hours and place of work; trial period, if any; the salary structure (additional to the mandatory base); job description; and post-employment restrictions (non-compete and non-solicitation covenants) if any.


i Employment courts

The claims to be decided by the employment courts are those between the following parties: the employee and employer; the sales agent (a physical person) and the principal; a freelance worker and a company; and a member of the board of directors and the company (for fees).

In Italy, employment claims can be filed with the courts without any prior attempt at conciliation. However, a prior attempt at conciliation remains mandatory in the case of dismissal of an employee hired before 7 March 2015.

This mandatory procedure is necessary only for dismissals for economic reasons; in such cases, an employer with more than 15 employees who is going to dismiss fewer than five employees within the same 120 days2 must deliver a preliminary notice of dismissal both to the local labour office (ITL) and to the employee being dismissed and wait for a hearing before the ITL (within 20 days), which is a local office of the Ministry of Employment and Social Security.

If one of the parties refuses the conciliation attempt, or if the attempts to find a solution within the applicable time frame (20 days) are unsuccessful, a certificate is issued confirming that the conciliation requirement has been complied with. The claimant can then proceed to dismiss the employee.

The minutes of the conciliation attempt can be used by the employment court to charge the trial costs and legal expenses to the party that refused conciliation, although the final court decision may result in a lower amount being imposed.

ii Court proceedings

Court proceedings follow two distinct sets of procedural rules:

  1. the Employment Court Rules of Procedure 2012 (the Fornero Rules), which apply only to employees hired before 7 March 2015 by employers with more than 15 employees, and who challenge their dismissal in court; and
  2. the ordinary employment rules of the Italian Code of Civil Procedure (Article 414).

The Fornero Rules for dismissals are intended to speed up the start of the trial and the time it takes to obtain a decision. To avoid delay in obtaining the main decision regarding the potential reinstatement of the employee at work, the Fornero Rules procedure cannot deal with ancillary claims (for example, salary disputes connected with the former employment relationship).

In accordance with the Fornero Rules, the plaintiff must challenge the dismissal in writing within 60 days and file a lawsuit within 180 days of the letter challenging the dismissal being received.

Once the court has set the hearing date, the plaintiff shall notify the date and lawsuit to the defendant at least 25 days prior to the hearing, while the defendant must file its defence brief with the court at least five days before the hearing.

The lawsuit and the claimant's brief must be as accurate as possible, given the strict time constraints, but they can be modified slightly in response to an unexpected defence strategy by a counterparty.

Ideally, the first phase of the trial is very speedy and is concluded with one of three possible decisions: (1) reinstatement of the employee at work; (2) imposition of a fine of up to two years' salary; or (3) a declaration that the dismissal is correct and rejection of the claim.

This quick decision can be opposed by the losing party by filing a lawsuit before the same court within 30 days. A date will then be set for the opposition hearing, which is conducted pursuant to the Article 414 rules (i.e., same as an ordinary proceeding).

If, at the end of this opposition phase, the losing party intends to challenge the decision, an appeal must be lodged with the court of appeal within 30 days. During the appeal, only new information may be added or information that the party could not have known before. The appeal can be challenged before the Supreme Court, but only on questions of law or in relation to a misinterpretation of the CBA.

For all other employment claims (mainly salary claims, but also dismissal of senior managers, dismissal of employees working for employers with less than 15 full-time employees, or dismissal of employees hired after 15 March 2015, depending on the size of the employer), the claimant must file a lawsuit with an employment court, according to Article 414.

In general, statutes of limitations for bringing claims are as follows:

  1. contracts null and void: no time limit or 10 years;
  2. salary claims: five years; and
  3. dismissal or change of contract (from temporary to permanent, or freelance to permanent employment) or change of employer (for example, agency workers who claim to have been hired by the customer): 180 days from the date of the letter challenging the decision being received (which must be sent within 60 days of the challenged event).

However, during the voluntary conciliation period, the time limit is suspended and resumes the day after the parties deem the conciliation attempt to have failed.

The writ of summons shall be full and complete. This means that nothing can be changed subsequently, including any attached documents, the names of the witnesses and the circumstances testified to by the witnesses.

Upon receipt of the writ of summons, the court will open a file and add all the documents. The president of the court will then assign the claim to a single judge, who will schedule a date for the first hearing through a case management order.

It is the claimant's responsibility to obtain the judge's order and serve the writ of summons, together with the court order, on the defending party (the respondent).

The respondent should then file the defence brief with the court at least 10 days prior to the hearing. The defence brief should be complete and cannot be changed subsequently, including any attached documents, the names of the witnesses and the circumstances testified to by the witnesses.

The main hearing is heard by a single employment judge and is open to the public, but the judge can restrict access. During the first hearing, the judge must try to help the parties reaching a settlement agreement. Again, should one of the parties disregard the judge's suggestion and refuse unreasonably to settle the claim, that party may be sanctioned by imposing the payment of the other party's legal fees, even if that party wins the case (albeit, in the latter case, for an amount lower than the one suggested by the judge and accepted by the counterparty).

The judgment can either be announced orally or taken under advisement to be issued in writing as soon as practicable. In either case, the court ultimately must publish a decision and provide the reasoning for it.

If the worker is the successful party, he or she automatically obtains an order for payment of all claims and legal costs, sometimes even before the reasoning for the decision is written and made available to the parties.

A court judgment can be challenged by filing an appeal with the court of appeal within six months of the date on which the reasoning for the judgment is made public. Should the court judgment be served on the counterparty's lawyer by the winning party's lawyer, the term for filing the appeal is only one month. The appeal can only be filed without further witnesses being heard or new documents being acquired (except for specific objections). Beyond the court of appeal, further appeals can be made to the Supreme Court, but only on questions of law.

Types of employment disputes

i Unfair dismissal

Under the Workers' Statute, no employee can be dismissed without a qualified reason (objective or subjective). It is up to the employer to show that the dismissal was reasonable and that it was carried out in accordance with fair procedures.

For employers with more than 15 full-time employees and employees hired before 7 March 2015, the following unfair dismissal awards apply:

  1. Reinstatement at work plus a maximum of one year's gross salary (depending on the duration of the trial), plus the option to resign with an upfront payment of 15/12 of the annual gross salary. This may occur in cases of false accusations or false economic or organisational reasons, or if an alternative to dismissal was available but not considered.
  2. A fine of between one and two years' gross salary. This lesser sentence is generally handed down by the court when the accusations are true, but not particularly serious, or the economic or organisational reasons are true.
  3. A fine of between six months' gross salary and one year's gross salary is levied when the reasons for termination are true and valid but the procedure was formally defective.
  4. Reinstatement at work plus damages equal to the full salary and social security costs for the period from dismissal to the reinstatement order, without any time limit, when the dismissal is found to be retaliatory (for example, a whistle-blower has been dismissed because of his or her accusations) or discriminatory, or in the case of dismissal of a working mother or of a woman within one year of her marriage.

For employees hired after 7 March 2015 by an employer with more than 15 full-time employees, the awards start from a minimum of 6/12 of the annual gross salary up to a maximum of three times the annual gross salary.

While the maternity and retaliatory rules apply also to senior managers for such a category, the other termination rules are just provided for by the CBAs, which usually provide for monetary indemnification rather than reinstatement at work.

ii Employment status

Whether an individual is an employee, a temporary staff on a coordinated and continuous collaboration contract (known as a collaborator or '') or a self-employed, is of key importance in relation to any employment benefits or rights he or she may have.

For example, certain rights are available to employees, such as the right to the national minimum wage and paid annual leave, and the right not to be unfairly dismissed. In addition, the tax and social security treatment of an individual will depend on their employment status.

Collaborators and consultants (self-employed workers), however, are entitled to fewer rights.

In general terms, an employee is a worker who has entered into or works under an employment contract, whose job is determined unilaterally by the employer and who is mainly paid on a time basis (locatio operarum): he or she sells his or her job skills on an hourly basis to a sole customer and can be redirected by the employer from one job to another (of the same or similar job grade), every day, in accordance with the business needs.

An individual is self-employed if his or her work is self-managed according to the target agreed with the customer, without any limitation on assisting other customers and without any time constraints or place of work determined by the customer. The self-employed individual can be a freelance professional (such as a lawyer, an accountant, a medical doctor) with a qualification from a state exam and registered in a mandatory register, or a free consultant without any specific enrolment in any mandatory register. What is crucial is that all these individuals are 'entrepreneurs on their own behalf', undertaking some sort of entrepreneurial risk on their own account.

Conversely, a collaborator is an individual who has entered into or works under a work contract or any other contract whereby the individual performs the work personally, for another party to the contract, by coordinating the work to meet the customer's needs and targets; on a continuous basis; without carrying out business through his or her own organisation of capital and tools; without undertaking a proper entrepreneurial risk on his or her own account; but without the customer being able to change his or her job unilaterally and ask that different tasks be performed.

In determining employment status, the courts will look at many factors regulating the arrangement between the parties. There is no single conclusive test to determine an individual's employment status.

iii Other disputes

Other common disputes heard in court are in relation to:

  1. minimum wages because of a lower level of classification with respect to the CBA provisions;
  2. paid leave and wages;
  3. overtime (work performed after the hours ordinarily provided for by the national collective contract);
  4. remote control of workers without any trade union agreement;
  5. 'black' work (working off the books without a contract and receiving payment without a payslip and proper taxation);
  6. dismissal of senior managers;
  7. stock options and restricted stock units;
  8. calculation of severance packages (the deferred payment, accrued on an annual basis by the employer, paid out in all cases of employment termination);
  9. joint liability of the principals, contractors and subcontractors towards the rights of the employees working in the business ruled by the contract;
  10. violation of temporary contract rules and requests to be hired on a permanent basis;
  11. violation of collaborator rules, and requests to be considered as an employee from the beginning of the relationship; and
  12. bullying or mobbing, and injury to mental and physical health.

Year in review

There were no new structural reforms in employment law in 2020. Indeed, all the attention of the political, social and economic sectors has been focused on the emergency situation created by the covid-19 pandemic. Consequently, efforts have focused on attempts to find solutions for immediate problems related to the pandemic.

Regarding employment, the two main problems have been related to: (1) the economic consequences of lockdown on employment relationships; and (2) the necessity to prevent employees' movements in performing work duties.

i Income support instruments and prohibition to dismiss

Owing to the extended period of lockdown, enforced by the Italian government to prevent the spread of the coronavirus, employers have been forced to close their business activities with a consequent decrease, or complete annulment, of their turnovers. This has meant that employers were unable to pay employees' salaries and there is also a risk of future job losses. Moreover, the difficulty of paying employees' salaries for reasons related to force majeure, according to Italian law and case law, would have risked possible bankruptcy for a high number of employers.

As first instance, the government implemented special income support instruments designed expressly to be applied for the covid-19 emergency. Indeed, the income support instruments that may be ordinarily required by the employers as provided for by Law No. 148 of 14 September 2015 would not have been sufficient for the emergency situation or, at least, they would have been hard to apply. Indeed, the income support instruments ordinarily provided for by Law No. 148/2015 do not apply to all employers but only to the employers who meet the requirements provided for by the same Law (mainly employers operating in the manufacturing sector and employers with an high number of employees operating in the trade sector).

In general, the income support instruments cover a part of the employees' wages that they would receive for the time not worked owing to the reduction or suspension of the business activity. Specifically, the Italian Social Security Authority (INPS) provides the 80 per cent of the wages due to employees for the hours not worked (and not paid by the employer). The employer is not obliged to pay the remaining 20 per cent. Nevertheless, there are maximum limits for the amount that may be provided by the INPS. In fact, the INPS, in some cases, will not cover the amount corresponding to the 80 per cent of the employees' wages, especially with regard to higher wages, namely, (1) for salaries up to €2,159.48 per month, the subvention will be equal to a maximum amount of €998.18 (€939.89 net of 5.84 per cent); and (2) for salaries over €2,159.48 per month, the subvention shall be equal to a maximum amount of €1,199.72 (€1,129.66 net of 5.84 per cent).

The income support instruments for covid-19 emergency have been provided for the first time by Law No. 18/2020 and then renewed and extended multiple times through multiple subsequent laws. The latest Law No. 178/2020 provides for a maximum period of income support instruments of 12 weeks from 1 January 2021 and this is likely to be extended or renewed again. The income support instruments provided by the government for the emergency are the ordinary wage guarantee fund (CIGO) and the ordinary allowance (FIS), which are provided for by Law No. 148/2015 but with some amendments described herein. Moreover, the government provided a 'wage guarantee fund in derogation' (CIGD), already provided during the economic crisis in 2011. The CIGO is applicable mainly to manufacturing sector employers regardless of the number of employees employed. The FIS is applicable to employers with a minimum of five employees employed mainly in the trade sector, services delivery sector and tourism sector. The CIGD is applicable to employers who may not apply for CIGO or FIS. Consequently, income support instruments for the emergency have been provided for all the employers and for all the employees.

The special income support instruments provided for the covid-19 emergency are easier to obtain owing to the following differences between them and the ordinarily provided income support instruments:

  1. The employers may apply to the INPS for the most appropriate income support instrument in cases of reduction or suspension of the business activity for reasons related to the covid-19 pandemic not mandatorily justified with a detailed sheet to be verified by INPS ordinarily provided (nevertheless the INPS may carry out random spot checks).
  2. Ordinarily, the payment of wage subsidies is made by the employer to the entitled employees at the end of each payment period and then reimbursed by the INPS to the employer or compensated with a reduction of the amount of social contributions to be paid. Direct payment of the subsidies by the INPS may be required by the employer at the moment of application by attaching documentation proving economic difficulties of the employer. The direct payment of the income support instruments by the INPS may be obtained upon simple request by the employer, without the submission of documentation proving the employer's financial difficulties.
  3. Ordinarily provided terms for the application procedure shall not apply (total ordinary duration of the procedure: around 30 days). Nevertheless, union procedure is mandatory and must be concluded within three days. Union procedure includes information, consultation and joint examination. Information is carried out through a written communication to the unions, which must provide all information about suspension or reduction. Consultation and joint examination may be required by one of the social parties (employer or trade unions) within three days of receipt of the information and relates to all issues regarding suspension or reduction. The consultation may be concluded with an agreement between the employer and the social parties, but it is important to note that such an agreement is not binding.

The union phase may be entirely carried out by telematic means, which may be exchange of certified or simple emails and video calls.

The additional social contribution ordinarily provided is excluded or required solely for employers with no or low decrease in turnover, depending on the period of utilisation of the income support instrument.

In addition to the above-mentioned special income support instruments, the government has, since 17 March 2020, provided for a prohibition on dismissals for economic reasons and on starting collective redundancy procedures. Originally, the prohibition was 'temporary' for 60 days, but it was renewed multiple times and, at present, its term has been extended until 30 June 2021, according to Law No. 178/2020. The government de facto prohibited dismissal for economic reasons for more than a year. Both legal practitioners and commentators have stated that the provision of a prohibition on dismissal for such a long period could be deemed a violation of the Italian Constitution's provisions on freedom of private economic initiative. However, the issue has not actually been brought before the Constitutional Court (the sole authority with competence in constitutional matters in Italian law).

The prohibition is effective solely with regard to dismissals for economic reasons; dismissals for other reasons such as misconduct or poor performance are still legal. Moreover, the resignations of the employees for any reasons and the mutual resolutions are lawful and possible. Since the wording of the prohibition refers clearly to Law No. 223/1991 and Article 3 of Law No. 604/1966 and both of them regulate solely dismissal of non-executive employees, the prohibition has been interpretated as not applicable to the dismissal of executive employees. This interpretation has been confirmed by the government. Consequently, the dismissal of executives for economic reasons is lawful.

The prohibition was originally provided for and applicable to all employers, but it has been amended by Law No. 104/2020, which provided the following exceptions:

  1. complete cessation of the business activity (e.g., winding-up of the company or the branch);
  2. bankruptcy with termination of the business activity; and
  3. collective agreement at company level with the unions, providing for an incentive to leave to be voluntarily accepted by each employee.

ii Working from home: simplified smart working

Law No. 81/2017 introduced for the first time 'smart working'. Smart working is where the employee works partially at the employer's premises and partially from another place, outside the company premises, including the employee's home, without a fixed workstation. Smart working is regulated by the above-mentioned law and by the CBAs applied by the employer.

According to Law No. 81/2017, smart working must be agreed in writing between employer and employee and the individual contracts provide specific regulations with regards to the work performance in smart working. The law does not oblige the employer to reimburse the costs borne by the employee in smart working for the work performance (e.g., electricity and telecommunication costs) but it is possible to provide reimbursement with the agreement.

The government decided to slightly modify the already easily implemented smart working regime and encourage its use during the pandemic in order to reduce the employees' movements and to permit continuity of work for those businesses that have been only slightly impacted by the covid-19 emergency and lockdown (such as consultancy and remote services businesses).

Consequently, the special smart working regime for the covid-19 emergency provides for a simplification of the requirements to implement smart working during the pandemic. The first act providing simplified smart working throughout the national territory was the Decree of the Prime Minister of 1 March 2020. Law No. 183/2020 provides that simplified smart working will be applicable until 30 April 2021 but it is likely to be extended further. The main simplifications are:

  1. the possibility for the employer to impose smart working without prior agreement with the employee; and
  2. the possibility for the employer to unilaterally revoke simplified smart working at the end of the emergency.

Moreover, the emergency regime simplified the requirements for notification of the smart working implementation through the website of the Ministry of Labour, by providing the option to transmit a collective communication regarding all employees involved instead of a individual notifications for each employee in smart working. In light of the above, simplified smart working has been and is being used extensively by employers to avoid risks related to the spread of the coronavirus, achieving also a reduction of costs related to company premises.

iii Relevant cases

Supreme Court No. 1663/2020, Case FOODINH SRL v. PM and others

The case decided by the Italian Supreme Court with judgment No. 1663/2020 related to the application of the employment regulations, as a whole, to those workers who perform activities of delivery of goods on behalf of others, in urban areas and with the help of bicycles or motor vehicles, also through digital media platforms ('riders'). Precedent decisions and literature had previously put the riders' work relationship into a tertium genus falling between employment and autonomous work collaboration relationships. The judges of the Supreme Court highlighted that it is improper to speak of a tertium genus, which actually does not exist in the Italian system. Consequently, if the riders' working relationships do not comply with the rules provided for the autonomous work collaboration relationships, the employment regulations shall apply.

Supreme Court No. 15401/2020, Case PGC v. GRUPPO ARGENTA SPA

This case concerned the dismissal for economic reasons of an employee, who claimed the unlawfulness of his dismissal because of the failure of the employer to carry out the collective redundancy procedure, which is mandatory in cases of five dismissals issued by an employer in 120 days. According to the employee's defence, the transfer not accepted by another employee and the consequent mutual termination of his employment relationship are deemed to be included in the five dismissals threshold and, in the specific case, this would have implied the mandatory fulfilment of the collective redundancy procedure. The Court of Cassation, changing its previous orientation, has ruled in favour of the employee deciding that also consensual resignations are included in the five dismissals threshold, where these are the consequence of a work reorganisation with a substantial change in working conditions (e.g., transfer), according to the orientation provided by the Court of Justice of the European Union in Case C. 422/2014, on 11 November 2015.

The decision has been very important because of the high number of mutual terminations following the transfer done during the prohibition to dismiss with the purpose to terminate the employment avoiding the application of the prohibition, as seen above.

Supreme Court No. 21306/2020, Case RB v. GEPIN SRL

With Decision No. 21306/2020, the Supreme Court confirmed that it is possible to limit the scope of application of the collective redundancy procedure solely to the employees of a single sector or department rather that to the employees of the entire business unit provided that this is specifically stated, with an exhaustive explanation of the reasons, in the letter with which the procedure is started. The purpose of the letter is to facilitate the examination of the matter by the trade unions to which the letter is addressed. In the case decided by the Court, the dismissals were declared unlawful since the employer's intention to limit the scope of application of the redundancy procedure had been expressed in the starting letter, with a rather unspecific wording.

Outlook and conclusions

The past year has been characterised by the covid-19 pandemic, which forced a large number of business activities to stop. Consequently, the government used all its efforts to reduce the negative consequences of the crisis on both employers and employees by providing economic aid and imposing a prohibition on dismissals, which has lasted for more than a year and is likely to be extended. Remote working has become more usual, being encouraged by the public authorities through simplified smart working.

It is not clear how the Italian employment law and system will evolve in the immediate future but no structural reforms are planned. The focus is on the possible further extension of the dismissal prohibition with some operators (mainly employers) pushing for termination of the prohibition because it violates the Constitution. Other parties (mainly unions) are supporting a further extension to grant employment stability to employees and to avoid mass dismissals. It is likely that, if there is an extension of the prohibition to dismiss, the income support instruments will be extended accordingly.

Regarding the effects of the covid-19 pandemic on the employment levels, INPS statistical research shows that there has been a decrease in the hiring of employees through employment agreements. In the period January 2020 to December 2020, 5 million people were hired by private employers compared with 7.27 million people in the same period in 2019.

In the period January 2020 to December 2020, there was a slight decrease in the volume of agreement-type changeovers from fixed-term to open-ended employment agreements, from 712,892 in the same period in 2019 to 553,193. There was an increase in the number of apprenticeship relationships confirmed at the end of the training period (from 83,588 to 90,839).

As at December 2020, the yearly balance (i.e., the difference between the number of employees recruited and the number of terminations in the past 12 months) is negative, equal to 659,808 more employees terminated than were recruited, with a significant inversion of the trend indicated by the figures registered in the same period at the end of December 2019 (161,078 more employee recruited than were terminated). There is, therefore, a decreasing employment trend, clearly because of the covid-19 situation, which the dismissal prohibition does not seem to affect.

Another interesting result is the clear difference between the trend in permanent employment relationships on one hand and fixed-term relationships on the other:

  1. the yearly balance for permanent employment increased: as at December 2019, there were 365,216 more new permanent employment relationships than terminated open-ended relationships, whereas in December 2020, this figure was equal to 259,160; and
  2. the yearly balance for fixed-term relationships over the same period decreased: as at December 2019, there were 228,503 more terminated fixed-term relationships than new fixed-term employment relationships, whereas in December 2020, there were 497,481 more terminated fixed-term relationships than new fixed-term employment relationships.


1 Francesco d'Amora and Andrea Patrizi are partners at Quorum Studio Legale e Tributario Associato. The authors extend special thanks to Giuseppe Fera.

2 For more than four employees, the collective redundancy procedure will apply.

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