FTC regulated: Yes

Valid reasons for FTC use:

Remarks

Limitations after the first 12 months.

Article 19 of Legislative Decree No. 81 of 2015, as amended by Law Decree No. 87 of 2018, provides that there is no need to indicate a specific reason to enter a FTC when it has a maximum duration of 12 months.
The FTC can have a duration higher than 12 months, but in any case lower than 24 months, only if there is one of the following justifying reasons: a) temporary and objective needs unrelated to the ordinary business activity of the employer, or needs of temporarily replace other employees; or b) temporary, significant and unpredictable peaks in the ordinary business activity of the employer.

Notwithstanding the above, Article 20 of Legislative Decree No. 81 of 2015 provides that it is forbidden to use a FTC in the following cases: i) replacement of workers in strike; ii) replacement of positions in relation to collective dismissals occurred over the past 6 months; iii) when the business unit suffered suspension or reduction of activities connected to the intervention of State salary support; iv) employers that have not carried out the risk assessment activity in accordance with health and safety legislation.

Maximum number of successive FTCs: 4

Remarks

Article 21 of Legislative Decree No. 81 of 2015, as amended by Law Decree No. 87 of 2018, provides that the term of the FTC can be extended, with the consent of the worker, only when the initial duration of the contract is less than 24 months, and, in any case, for maximum four times in 24 months.If the number of extensions is higher, the contract is transformed into an open-end contract from the effective date of the fifth extension.

Maximum cumulative duration of successive FTCs: 24months

Remarks

Article 19 of Legislative Decree No. 81 of 2015, as amended by Law Decree No. 87 of 2018, provides that the maximum duration of a FTC is 24 months.
Article 21, as amended by Law Decree No. 87 of 2018, provides that a FTC can be extended for maximum four times in 24 months.

% of workforce under FTC: 13.1

Remarks

Source: Eurostat, for the year 2018 available at https://ec.europa.eu/eurostat/databrowser/view/tesem110/default/table?lang=en
The figure refers to the percentage of employees with a contract of limited duration (= temporary job) of total number of employee aged 20-64 years.

Eurostat data are based on the following definition:
‘A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts.’

Notes / Remarks

Notes

Article 23 of Legislative Decree No. 81 of 2015 provides that, unless otherwise provided by collective bargaining agreements, the number of employees employed under a FTC cannot exceed the limit of 20% of the total number of employees employed by an employer under open-ended employment contracts.

Maximum probationary (trial) period (in months): 6 months

Remarks

The length of probationary periods is provided by collective bargaining agreements. However, Article 10 of Law No. 604 of 1966 provides for a maximum length of 6 months.

Obligation to provide reasons to the employee: Yes

Remarks

Article 2 of Law No. 604 of 1966 as amended by Article 1(37) of Law No. 92 of 2012.
An employer has to serve the dismissal in writing to the relevant employee, outlining the reasons grounding the dismissal.

Valid grounds (justified dismissal): any fair reasons

Remarks

•A dismissal is unfair unless it is for a just cause (no notice required) or a justified reason (notice required)
See Article 1 and Article 3 of Law No. 604 of 1966 and Article 2119 CC.

According to Article 2119 C.C., a just cause is a very serious misconduct committed by one of the parties, which prevent them to continue the employment relationship even during the notice period.
According to Article 3 of Law No. 604 of 1966, a justified reason can be: a) a serious misconduct committed by an employee (subjective justified reason); or b) a reason regarding the production process, the organization of work or the smooth running of the undertaking (objective justified reason).

Prohibited grounds: marital status, pregnancy, maternity leave, family responsibilities, filing a complaint against the employer, race, sex, sexual orientation, religion, political opinion, age, trade union membership and activities, disability, exercise of a right, parental leave, participation in a lawful strike, whistle blowing, adoption leave

Remarks

Article 15 and Article 18 of Law No. 300 of 1970
Article 35 of Legislative Decree No. 198 of 2006
Article 54 of Legislative Decree No. 151 of 2001
Article 1345 of the Civil Code: prohibits retaliatory dismissals and whistleblowing has traditionally been considered as a type of retaliation.

Workers enjoying special protection: workers' representatives, pregnant women and/or women on maternity leave, workers with family responsibilities

Remarks

- Workers’ representatives: see Article 15 and Article 18 of Law No. 300 of 1970
- Pregnant women, women on maternity leave, women with family responsibilities: see Legislative Decree 151 of 2001 on the protection of maternity and paternity. According to Article 54, dismissal is prohibited form the beginning of the pregnancy and up to a maximum of one year after the birth of the child.
This prohibition does not however prevent an employer for dismissing a female employee in the event of serious misconduct (just cause) or in case of cessation of the activities of the employer.
- Workers on paternity leave equally benefit from the protection against dismissal (note, however, that, under Italian law, a worker is entitled to paternity leave in limited situations: death of the mother, serious disability or abandonment by the mother or exclusive custody of the child to the father).
- The prohibition of dismissal has also been extended to cover adoption leave (up until one year after the child has entered the family).

Notification to the worker to be dismissed: written

Remarks

Article 2 of Law 604 of 1966 as amended by Article 1(37) of Law No. 92 of 2012.
An employer has to serve the dismissal in writing to the relevant employee, outlining the reasons grounding the dismissal.

Notice period:

Remarks

Article 2118 CC provides that the length of the notice period is normally governed by collective agreements according to the employee’s length of service, tasks assigned and category.

Pay in lieu of notice: Yes

Remarks

Article 2118 CC provides that an indemnity in lieu of notice is due when the employee does not work during the notice period.

Notification to the public administration: Yes

Remarks

For those employees hired prior to 7 March 2015 and subject to Article 18 of the Workers' Statute:
pursuant to Article 7 of Law 604 of 1966, as amended by Article 1(40) of Law No. 92 of 2012, employers having more than 15 employees in the same work unit or borough (comune), or more than 60 overall, have to notify public bodies (Direzione Territoriale del Lavoro) when a dismissal for justified objective reason is envisaged, in order to attempt an amicable settlement between the parties. This does not apply to dismissal connected to absence for work because of illness or injury or to other similar cases.
For those employees hired as of 7 March 2015 and subject to Legislative Decree No. 23 of 2015 (so-called 'Jobs Act'):
an employer does not need to notify the public administration: notice to the workers to be dismissed is sufficient.

Notification to workers' representatives: No

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

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).

Remarks

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): Yes

Remarks

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: Yes

Remarks

Article 4 and Article 24 of Law No. 223 of 1991. See previous point.

Notification to workers' representatives: Yes

Remarks

Article 4, Article 5 and Article 24 of Law No. 223 of 1991. See previous point.

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

Priority rules for collective dismissals (social considerations, age, job tenure): Yes

Remarks

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...): Yes

Remarks

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: Yes

Remarks

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.

tenure ≥ 6 months: 0 months

tenure ≥ 9 months: 0 months

tenure ≥ 1 year: 0 months

tenure ≥ 4 years: 0 months

tenure ≥ 5 years: 0 months

tenure ≥ 10 years: 0 months

tenure ≥ 20 years: 0 months

Redundancy payment:

tenure ≥ 6 months: 0 months

tenure ≥ 9 months: 0 months

tenure ≥ 1 year: 0 months

tenure ≥ 2 years: 0 months

tenure ≥ 4 years: 0 months

tenure ≥ 5 years: 0 months

tenure ≥ 10 years: 0 months

tenure ≥ 20 years: 0 months

Notes / Remarks

Notes

No severance pay or redundancy payment as such. However, there is an end-of-employment contract indemnity (TFR: Trattamento di fine rapporto: sec. 2120 CC) constituted by a certain amount of salary set aside each month to be paid to each employee upon termination of the employment contract.
It is calculated according to the formula of a year’s overall salary divided by 13.5, plus 1.5 per cent for each year of service plus compensation for inflation. It is payable whenever an employment contract ends for whatever reason, and is based on length of service with the company.
The TFR payment scheme has been reformed. Since 2007, the employer’s contributions for the TFR have been transferred to either a state pension fund or private complementary pension funds.

Compensation for unfair dismissal - free determination by court: No

Compensation for unfair dismissal - Are there legal limits?: Yes

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):

Remarks

For those employees hired prior to 7 March 2015 and subject to Article 18 of the Workers' Statute, applicable remedies are the following:
a) dismissal deemed null, discriminatory or retaliatory: reinstatement plus an indemnity not less than 5 months' salary, to be discretionary determined by the Judge;
b) disciplinary dismissal deemed unfair because it was based on facts that did not occur or the economic dismissal was ordered based on an economic or redundancy pretext that was clearly non-existent: reinstatement plus an indemnity up to 12 months' salary, to be discretionary determined by the Judge;
c) in any other case of unfair disciplinary or economic dismissal: indemnity ranging from 12 to 24 months' salary, to be discretionary determined by the Judge;
d) formal or procedural violation affecting the dismissal: indemnity ranging from 6 to 12 months' salary, to be discretionary determined by the Judge.

These are the remedies for those employers having a sizeable workforce (those employers having have more than 15 employees in the same work unit or borough (comune) or more than 60 overall). For those employers not having a sizeable workforce, in case of a dismissal deemed unfair, the indemnity is ranging from 2.5 to 6 months' salary, to be discretionary determined by the Judge, except for dismissal deemed null, discriminatory or retaliatory – in this case, the remedy is the one provided above sub a).

As a general remark, note that, within the floor and the ceiling imposed by the law, the Judge determines the actual indemnities sub points c) and d) 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) dismissal deemed null, discriminatory or retaliatory: reinstatement plus an indemnity not less than 5 months' salary, to be discretionary determined by the Judge;
b) disciplinary dismissal deemed unfair because it was based on facts that did not occur: reinstatement plus an indemnity up to 12 months' salary, to be discretionary determined by the Judge;
c) in any other case of unfair disciplinary or economic dismissal: indemnity ranging from 6 to 36 months' salary;
d) formal or procedural violation affecting the dismissal: indemnity equal to 1 month salary per year of work and, in any case, ranging from 2 to 12 months' salary.

These are the remedies for those employers having a sizeable workforce (those employers having more than 15 employees in the same work unit or borough (comune) or more than 60 overall). For those employers not having a sizeable workforce, in case of a dismissal deemed unfair, the amounts of the indemnities sub c) and d) are divided by two and cannot be higher than 6 months' salary, except for dismissal deemed null, discriminatory or retaliatory – in this case, the remedy is the one provided above sub a).

Note that, in July, Law Decree No. 87 of 2018 amended Legislative Decree No. 23 of 2015. As a result, the indemnity sub c) 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 point c) 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.

Reinstatement available: Yes

Remarks

See point above.

Preliminary mandatory conciliation: Yes

Remarks

Conciliation is optional. However, depending on the hiring date and the kind of dismissal at stake, there are some rules that try to promote conciliation.

For those employees hired prior to 7 March 2015 and subject to Article 18 of the Workers' Statute:
pursuant to Article 7 of Law 604 of 1966 as amended by Article 1(40) of Law No. 92 of 2012, employers having more than 15 employees in the same work unit or borough (comune), or more than 60 overall, have to notify public bodies (Direzione Territoriale del Lavoro) when a dismissal for justified objective reason is envisaged, in order to attempt an amicable settlement between the parties. This does not apply to dismissal connected to absence for work because of illness or injury or to other similar cases.

For those employees hired as of 7 March 2015 and subject to Legislative Decree No. 23 of 2015 (so-called 'Jobs Act'):
pursuant to Article 6 of Legislative Decree No. 23 of 2015, immediately following the dismissal, the employer has the opportunity to offer the dismissed employee a monetary compensation of a fixed amount - depending on his/her length of service - which would benefit from a tax and social contribution exemption.

Competent court(s) / tribunal(s): labour court

Remarks

Article 413 of the Civil Procedure Code.
The labour court "giudice del lavoro" is integrated into the organization of the general civil court system, but follow special procedures.

Existing arbitration: Yes

Remarks

Article 412-ter of the Civil Procedure Code: arbitration must be foreseen by a collective agreement.

Length of procedure: 1696day(s)

Remarks

The reported number refers to the average length of proceedings, in days (from the date the application for judicial review is lodged), for the year 2016.
The average length of proceedings has been calculated from the date the application for judicial review is lodged to the date the judgment is made, without taking into account the enforcement procedure. The only available information on employment proceedings refers to employment dismissal cases and the above-mentioned number is the result of the sum of the following data: 427 days (first instance proceedings) + 522 (second instance proceedings) + 747 (third instance proceedings).
Source: 2018 Italy Evaluation Exercise (data 2016) of the European Commission for the Efficiency of Justice: https://www.coe.int/en/web/cepej/country-profiles/italy

Always with regard to dismissals, it has to be further considered that Article 6 of Law No. 604 of 1966 states that any type of dismissal must be challenged by the employee within 60 (*this however does not have to be respected as it is possible to file a claim before the Court directly) days starting from the day in which the employee received the dismissal letter. This is ineffective if the employee does not file the claim before the Court within the following 270 days. If the employee does not meet the two above-mentioned deadlines, he/she will be out of time to challenge the dismissal before the Court.

Burden of Proof: both

Remarks

Article 2697 CC: The applicant has to prove the facts on which his or her claim is based, i.e. the facts that have the legal effects claimed. The defendant, on the other hand, must provide evidence of facts precluding liability, or showing that a right has been exhausted or changed in such a way that the applicant's claim should be dismissed. If the applicant is unable to substantiate his or her claim, the application is dismissed, irrespective of whether the defendant submits arguments and supporting evidence in defense.
Note that, in certain circumstances, the burden of proof is 'reversed': e.g. Article 5 of Law No. 604 of 1966 provides that the burden of proof of demonstrating the existence of a just cause or subjective/objective reason grounding the dismissal is on the employer.