ITALY Trends and Developments Contributed by: Giorgio Manca, DWF
The Jobs Act and its interpretation by the Italian Constitutional Court Structured as a multi-decree piece of legislation, the 2015 Jobs Act guaranteed the so-called growing safeguards ( tutele crescenti ) for employees employed under employment agreements signed by its date of effectiveness. Such regulation provides for the employee’s right to claim unfair dismissal, together with a range of indemnities by way of damage compensation for the employer’s illegitimate termination. More specifically, said range of indemnities amounts to between six and 36 monthly salaries for employees of large compa - nies (at least 16 employees) and between two and six monthly salaries for employees of small companies (15 employees or less). Against this background, with Judgment No 118 of 21 July 2025, the Italian Constitutional Court declared the illegitimacy of the maximum limit of six monthly salaries by way of compensation in cases of unlaw - ful dismissal at smaller companies, stating that such amount should be assessed by the judge on a case- by-case basis and not fixed. More specifically, the Constitutional Court found that the limit would violate the principles of proportional - ity, adequacy and the deterrence value of the sanc - tion, limiting the judge’s power to assess the specific case. As a consequence, although no new regulation has been issued yet, the judge can now adjust the compensation between three and 18 monthly salaries, making the protection more “customised” according to the case without the six-month cap. This ruling is part of a trend towards case law pro - cessed by the Italian Constitutional Court progressive - ly dismantling the rigidity of the Jobs Act, restoring the central role of the judge and effective protection of employees against the limitation of responsibility on a company in case of unlawful dismissal. In this process of dismantlement, the Constitutional Court has also been questioning the Jobs Act purpose of providing employees with damage compensation as a primary consequence of unlawful dismissal, limiting the pos - sibility of reinstatement to certain hypothetical cases.
An item at the abrogative referendum held on 8–9 June 2025 in Italy mentioned this topic as well, but with no practical consequences for the legal frame - work due to the lack of a quota requirement. In any case, it should be highlighted that, nowadays, Italian employers must deal with the uncertainty of the consequences of an unlawful dismissal, whereby (i) no limit of six monthly salaries can apply in case of compensation paid by smaller companies, and (ii) no reinstatement obligation can be excluded a priori. Workforce supply and a new EU-driven trend The legal framework of workforce supply ( sommin- istrazione ) has been amended and reformed numer - ous times since its introduction into the Italian legal system. As a recent example, last year, new regula - tions provided for many new outputs regarding, for example, the maximum number of temporary workers with respect to the number of employees at the user company, as well as several stronger protections for temporary workers themselves, who must be treated without discrimination relative to the user company’s personnel. The end of 2024 was deemed to represent a turning point for workforce supply regulation, especially due to the work of the Court of Justice of the EU and its focus on the right of the employee not to be supplied on an open-ended basis (through so-called staff leas - ing) in favour of the user company. Staff leasing under scrutiny The legitimacy of staff leasing – that is, temporary employment with open-ended assignment to the user company – has been subject to many jurisprudential and doctrinal assessments with respect to its potential conflict with the EU legal framework. In fact, according to the European principles under which this type of contract has been regulated, since the ordinary form of employment relationship is repre - sented by the bilateral employer–employee structure, with an open-ended basis, the workforce supply and its trilateral structure (which adds the supply agency as the third subject) should be an exception, thus requiring several limitations to its usage.
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