Italy: Employment Law Newsletter | April 2024

New laws and regulations

Fixed-term contracts: new rules until 31 December 2024

Under Italian law, a fixed-term employment contract cannot last more than 24 months and can be entered into between an employer and an employee for any reason, if it has a duration of up to 12 months. However, if the fixed-term contract is entered into for, or it is extended beyond 12 months, then the contract must provide some specific business needs justifying the fixed-term (e.g., replacement of other employees, specific needs set forth under collective bargaining, etc.). In 2023, a new law allowed the employer and the employee to jointly identify the needs justifying the fixed-term contract if collective bargaining did not regulate these aspects, but only until 30 April 2024. This possibility for the parties to identify the business needs has now been extended until 31 December 2024.

Case law developments

Reinstatement for employees hired after 7 March 2015

Italian law regulating protection in case of unlaw dismissal provides for a less favorable treatment for employees hired after 7 March 2015, compared to those hired before that date. In fact, with the exception of certain, specific instances, such as termination for discriminatory reasons, in most cases unlawfully dismissed employees are entitled only to an economic indemnity and not to reinstatement. Recently, the Italian Constitutional Court clarified that an employee may be entitled to reinstatement and compensation for damages even if the legal provision breached by the employer does not expressly call for these remedies, making it easier for employees to be protected against unfair dismissal.

A past criminal conviction does not automatically justify a dismissal for cause

When an employee commits a crime, this could result in a breach of trust with the employer and justify dismissal for disciplinary reasons. If, however, the employee was convicted prior to the beginning of the employment relationship, the discovery of this fact by the employer does not automatically justify dismissal. In fact, according to the Italian Supreme Court, to determine if a dismissal is lawful, a judge must specifically ascertained whether the employee’s past conduct may be relevant in the context of the employment relationship with the current employer.

Freedom of speech and business interests: clarifications from the European Court of Human Rights

Dismissing an employee who criticizes their employer may violate article 10 of the European Convention on Human Rights governing freedom of speech. In fact, the European Court of Human Rights ruled that national courts of law, which are called to assess the lawfulness of dismissals served to employees who openly criticize corporate management, must strike a fair balance between freedom of speech and the business' interest in protecting its reputation. Therefore, to assess whether a dismissal is lawful or not, national courts must have regard to the actual harmful consequences of the employee's opinion inside and outside the corporate environment.

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