The Employment Reform recently enacted by the Italian Parliament modified the regime applicable to individual terminations based on productive/organisational reasons ("economic dismissal").

Under the Employment Reform, companies employing:

  • more than 15 employees in the same business unit or within the same municipality (even if each business unit does not reach the threshold); or
  • more than 60 employees within the Italian territory

must follow a mandatory procedure to implement an economic dismissal.

The employer must send a Notice to the Labour Office and to the employee, notifying its intention to adopt the dismissal.  The Notice must outline the reasons for the dismissal as well as any alternative proposal to re-employ the employee.  Within seven days from the receipt of the Notice, the Labour Office must schedule a meeting in which both the employer and the employee appear.  The parties can be assisted by a trade union representative, a lawyer or a payroll consultant.  During the meeting the parties discuss any alternatives to dismissal as well as any measures to mitigate the consequences.

The procedure before the Labour Office must finish within 20 days from the date on which the first meeting was convened.  If the employee cannot attend the meeting for a justified reason (such as sickness leave), the procedure can be suspended for a maximum period of 15 days.

If, at the end of the procedure, the parties achieve an agreement, the employment relationship can be mutually terminated and an employee who meets the specific requirements can benefit from an unemployment allowance.

If the employer and the employee do not achieve an agreement, the employer can dismiss the employee.  The effect of the dismissal starts to run from the date on which the employer sent the Notice to the Labour Office; the period between the delivery of the Notice and the formal adoption of the dismissal is regarded as the notice period.  In the event of a claim about the procedure, a Judge can take into consideration the conduct of the parties.