New laws and regulations

New employment law provisions approved by 2025 Budget Law

The Italian parliament approved the Budget Law for 2025 on 28 December 2024. You can read all the most relevant updates in our dedicated special edition by clicking here.

New employment rules in Italy

The Italian Parliament recently approved a new law to specifically regulate some employment matters. Here is a summary of the main provisions that will be enforceable starting from 12 January 2025.

• Unjustified absences and voluntary resignations: If an employee is absent without a justification for a period longer than the term provided by the collective bargaining agreements or, lacking a contractual provision, for more than 15 days, the employment relationship will be automatically terminated at the employee's will. In this case, an employer is required to notify the competent labor inspectorate to allow it to carry out the relevant checks. The new rule does not apply if the employee proves that they were not able, for reasons linked to force majeure or caused by the employer, to communicate their absence as required by law. When the employment relationship ends as mentioned above, the termination is considered to have taken place as a voluntary resignation; therefore, the employee is not entitled to unemployment benefits.
• Staff leasing: Even if a temporary worker is hired on an open-ended basis by their work agency, their assignment cannot be longer than 24 months. The law also excludes workers employed by work agency on an open-ended basis from the thresholds of temporary workers that a company can engage (currently, 30% over the total permanent direct workforce).
• Probationary period for fixed-term contracts: Unless otherwise provided by the collective bargaining agreements, the length of the probationary period for fixed-term contracts is calculated at one day of probation for every 15 calendar days of working relationship. In any case, the probationary period cannot last less than two days or more than 15 days for fixed-term contracts lasting up to six months; for contracts lasting more than six months and less than 12 months, probation cannot last less than two days or more than 30 days
• "Mixed" contracts: The new law also introduces a new hybrid, mixed-cause contract, with the possibility of employing a worker partly under an employment contract and partly as an independent contractor with a VAT number. This contractual arrangement enables the worker to benefit from the flat-rate regime for self-employment income up to EUR 85,000 per year. This kind of contract will allow professionals to work under part-time contracts as employees and simultaneously provide services as independent contractors, providing greater flexibility for employers.
• Remote work: Employers must report to the Ministry of Labour the names of the employees who work remotely and the date of commencement and termination of the remote work, within five days.
• Settlement agreements: Under Italian laws, settlement agreements must be ratified by specific conciliatory boards to be valid and fully enforceable. The new law now clarifies that the ratification can occur also remotely, through digital platforms.

Fixed-term contracts: extension of rules until 31 December 2025

The Italian government has extended, until 31 December 2025, the possibility to justify fixed-term contracts lasting more than 12 months with a business reason identified by the employer and the employee, for technical, organizational or production needs. The lack of such a justification or other justifications expressly provided by statutory law (e.g., replacing an absent worker) may lead the employment relationship to be converted into an open-ended one.

Case law developments

Bullying: the burden of proof lies with the employee

One of the fundamental elements that a labor court has to check to award an employee with damages compensation for bullying is whether the employer carried out bullying behavior with a retaliatory intent. In this regard, the Italian Supreme Court ruled once again that an employee who claims to be a victim of bullying must prove (i) that the employer failed to protect their health and safety, also from a psychological point of view, (ii) the damages suffered, (iii) the link between the employer's behavior and the alleged damage, and (iv) the employer's will to harm.

Dismissal letter sent to an old address: is the dismissal valid?

According to the Italian Supreme Court, if an employer sends a dismissal letter to an employee, to an address where the employee no longer lives, the dismissal is valid if the employee did not notify the employer of their new address.

Works councils set up by minor trade unions

Recently, the Italian Constitutional Court has been asked to rule on a provision of the Italian Workers' Statute concerning works councils. This provision provides that only trade unions that have signed the collective bargaining agreements applied by an employer or that participated in their negotiations (without signing them) are entitled to set up their works councils at the employer's premises. In particular, the Court will have to decide whether trade unions that do not meet these requirements but have a significant number of workers enrolled are also entitled to set up their own works councils. The ruling will be important as it may allow more radical, "unofficial" trade union organizations to have their own representatives. We will provide further updates on this topic as soon as they are available.