Definition of collective dismissal (number of employees concerned):
A collective dismissal occurs when a company employing more than 15 employees intends to terminate the employment of at least 5 employees, including executives (dirigenti), in the same work unit, or in more than one work unit in the same province, within a period of 120 days, as a consequence of a reorganisation of the business (Article 24 of Law No. 223 of 1991).
For those employees hired prior to 7 March 2015 and subject to Article 18 of the Workers’ Statute, applicable remedies are the following:
a) violation of the collective dismissal procedure: indemnity ranging from 12 to 24 months’ salary, to be discretionary determined by the Judge;
b) violation of the mandatory selection criteria to make an employee redundant: reinstatement plus an indemnity up to 12 months’ salary, to be discretionary determined by the Judge; or
c) dismissal served without written form: reinstatement plus an indemnity not less than 5 months’ salary, to be discretionary determined by the Judge.
As a general remark, note that, within the floor and the ceiling imposed by the law, the Judge determines the actual indemnities sub points a) and b) at his/her own discretion, but using criteria predetermined by the law, such as length of service, number of employees employed and dimension of the business carried out by the company, behaviour and conditions of the parties.
For those employees hired as of 7 March 2015 and subject to Legislative Decree No. 23 of 2015 (so-called ‘Jobs Act’):
a) violation of the collective dismissal procedure: indemnity ranging from 6 to 36 months’ salary;
b) violation of the mandatory selection criteria to made an employee redundant: indemnity ranging from 6 to 36 months’ salary; or
c) dismissal served without written form: reinstatement plus an indemnity not less than 5 months’ salary.
Note that, in July, Law Decree No. 87 of 2018 amended Legislative Decree No. 23 of 2015. As a result, the indemnity sub a) and b) was increased from 4-24 months’ salary to 6-36 months’ salary. Notwithstanding the above, the mechanism to calculate the indemnity was not changed and only depended on the length of service of the dismissed employee, i.e. 2 months’ salary per year of work.
However, the Italian Constitutional Court, Judgement No. 194 of 8 November 2018, declared this mechanism unconstitutional. Therefore, after this Judgement, the Judge determines the actual indemnities sub points a) and b) at his/her own discretion and, although this is not specifically provided by Legislative Decree No. 23 of 2015, shall use criteria such as length of service, number of employees employed and dimension of the business carried out by the company, behaviour and conditions of the parties.
Note that, as a general rule, an employee – but not an employer – can opt for an indemnity equal to 15 months’ salary instead of being reinstated.
Prior consultations with trade unions (workers' representatives):
Article 4, Article 5 and Article 24 of Law No. 223 of 1991. Employers must carry out a preliminary mandatory information and consultation procedure with the works councils and trade unions. This statutory procedure is structured in two phases and it may last up to 75 days from its start.
To start the first phase of the statutory procedure, the employer must send a communication to the works councils and the trade unions signing the national collective bargaining agreement, informing them about the envisaged redundancy. A copy of this communication must also be sent to the Ministry of Labour (if the procedure regards offices in more than one region) and to the territorial labour offices in each province where the envisaged redundancy will be carried out. The unions may, within seven days of receipt of the letter, request that a meeting be held to discuss the possibility of avoiding or reducing the redundancies. This first phase must be completed within 45 days.
If no agreement with the unions is reached, a second phase of consultation must take place over the next 30 days. This is conducted before the Ministry of Labour. At the end of this second phase of consultation, or if in the meantime an agreement with the unions is reached, the employer may give written notice of dismissal to the employees concerned, in compliance with the notice periods provided by the national collective bargaining agreements. Communication of the dismissal must be given to the relevant employees within 120 days of the end of the second phase of consultation or of the date of stipulation of the agreement with the unions, unless a longer period is agreed with the unions. The employer must give the relevant information regarding the employees actually made redundant to the Ministry of Labour, the competent regional labour offices, and the unions, by sending a specific notice.
Notification to the public administration:
Article 4 and Article 24 of Law No. 223 of 1991. See previous point.
Notification to workers' representatives:
Article 4, Article 5 and Article 24 of Law No. 223 of 1991. See previous point.
Approval by public administration or judicial bodies:
Approval by workers' representatives:
Priority rules for collective dismissals (social considerations, age, job tenure):
Article 5 of Law No. 223 of 1991. One of the main purposes of the meeting with the unions is to identify the selection criteria of employees to be made redundant: these criteria cannot be decided by the employer at its own discretion.
Without an agreement with the unions on the selection criteria, statutory criteria apply (last-in-first-out, family members, organizational and technical needs).
The chosen criteria of selection must allow for a strict and objective ranking of employees to be made redundant, in order to prevent cherry picking by the employer. An employer can give priority to one of selection criteria, but only provided that all of them are used in the selection process of the employees to be made redundant.
Employer's obligation to consider alternatives to dismissal (transfers, retraining...):
Article 4 of Law No. 223 of 1991. The first phase of the mandatory information and consultation procedure with the unions is intended to analyse whether there are alternatives to dismissals and, if there are not, whether certain measures aimed at facilitating retraining of the employees to be made redundant can be adopted. However, the adoption of a 'social plan' is not required and an agreement with the unions providing for alternative measures to dismissals is optional.
Priority rules for re-employment:
Article 8 of Law No. 223 of 1991, referring to Article 15 (6) of Law No. 264 of 1949. Priority rule for re-employment for the six months following the dismissal.