ITALY Trends and Developments Contributed by: Giorgio Manca, DWF
Conclusions To summarise the above concepts, recent times – and specifically 2025 – were marked by a strengthening of labour protections for employees. With specific reference to jurisprudential work, the following legal developments are worth mentioning. • Enhanced accountability for the principal company in the execution of service agreements, in which the principal cannot (and must not) take anything for granted on the contractor side and shall carry out a detailed due diligence with regard to the treatment of the contractor’s personnel. Otherwise, it risks being liable for any and all breaches of the employment relationship made by the contractor vis-à-vis its own workforce in the execution of the service agreement. • Removal of the cap of six monthly salaries by way of indemnity due in case of unlawful dismissal by small companies increases the amount that can be claimed by employees. On the one hand, compa - nies must be alert to the potential risk of litigation on the workers’ side and to the difficulty of “budg - eting” a redundancy without being certain that they can actually “afford” it. On the other hand, employees are granted stronger protection, aimed at satisfying their economic demands following unlawful dismissal; there is also a possibility of reinstatement. • The EU-driven push towards stabilising employ - ment relationships in the workforce supply context and the growing risk for the user company, which bears the risk of requalification of temporary work - ers without breaching (in theory) any legal norm. In conclusion, Italy-based companies are being called upon to review their contractual and employment strategies in an increasingly complex regulatory envi - ronment, which focuses on protecting workers while sometimes placing economic burdens on enterprises.
Above all, a limit to staff leasing duration should be considered given the inherent so-called temporary nature of workforce supply. However, strange as it seems, no such express limitation is provided for in the European regulation – nor does such limitation exist in Italy, where in theory the work of an employee can be supplied on an open-ended basis to the same user for the execution of the same tasks. However, notwithstanding the lack of such express limitations, many Italian tribunals have followed the European trend and thus have questioned the legiti - macy of staff-leasing relationships, although this type of workforce supply would not expressly conflict with any applicable Italian piece of legislation. Very recently, the Court of Reggio Emilia referred a staff-leasing-related matter to the Court of Justice of the European Union (CJEU), asking whether the absence of limits on the duration of the assignment and the use of workforce supply for permanent needs could comply with EU law. Many other Italian tribunals have also taken part in the initiative, posing several questions on staff leasing relationships to the CJEU. A CJEU decision is expected in the coming months and could have disruptive effects on the Italian (and European) legal framework: if staff leasing were declared unlawful, the ruling may pave the way for the conversion of a staff leasing relationship into a subor - dinate form of permanent employment with the user company. This should also prompt the Italian legislator to finally set specific criteria regarding the duration of workforce supply in Italy and staff leasing discipline. In the meantime, certain caselaw of the Italian courts is already anticipating this trend. Several rulings have recognised the invalidity of staff leasing (carried out through repeat assignments) and have determined that the relationship should be converted into a direct employment agreement with the user, while other rulings based on the absence of a legal requirement concerning the temporary nature of staff leasing have ascertained the legitimacy thereof. Stay tuned for more on this matter.
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