Italy

Employees’ silence regarding their disability cannot justify the reduction of the damages due in case of discriminatory dismissal: once the employer’s breach has been established, the employee cannot bear the consequences of the employer’s failure to verify the existence of a disability and to initiate the dialogue required to assess reasonable accommodations. The Italian Supreme Court, with judgment no. 4623 of March 2, 2026, clarified that an employee’s silence regarding his/her disability cannot be invoked by the employer to reduce the damages due as a result of discriminatory dismissal. The case concerned a dismissal for exceeding the sickness leave (so-called “periodo di comporto”, during which the employee is entitled to keep his/her job position and the duration of which changes accordingly to each NCBA) regarding an employee affected by a disability, without the employer first verifying whether the absences were linked to that condition or initiating the dialogue required to assess possible reasonable accommodations. Although the employee had not expressly disclosed her disability, several elements known to the employer – including medical assessments declaring her unfit for night work and a previous hospitalization – could reasonably have alerted the employer to her health condition. Indeed, these circumstances constituted “warning signs” that should have led the employer to investigate whether the absences were linked to a disability and to interact with the employee to consider potential reasonable accommodations. The Turin Court of Appeal declared the dismissal null and void because it constituted indirect discrimination: applying the ordinary sickness leave threshold to a disabled employee, without taking into account the increased risk of illness associated with the disability, can result in a disadvantage for a protected group. However, the Court of Appeal limited the damages to the legal minimum of five months of salary, arguing that the employee’s silence about her disability mitigated the employer’s fault. The decision was, then, challenged by the employee before the Supreme Court. The Court recalled the principles governing contractual liability under Article 1218 of the Italian Civil Code and clarified that fault is not a constitutive element of contractual liability but simply a criterion for attributing liability for the cause that prevented performance. The minimum indemnity provided under Article 18 of the Workers’ Statute has a function comparable to a contractual penalty linked to the employer’s business risk. However, once the employer’s breach has been established, the judge cannot reduce the compensation simply by assessing the degree of fault. In the case at hand, the Turin Court of Appeal had already acknowledged that the employer could have identified the employee’s disability by exercising ordinary diligence and good faith. Having established that the employer failed to undertake the necessary checks and dialogue, it was therefore incorrect to attribute the consequences of that failure to the employee. The Supreme Court also emphasized that there is no obligation – nor even a burden – on the employee to spontaneously disclose sensitive health data. Rather, the employer must initiate a dialogue with the employee to verify whether the absences are linked to a disability and to assess possible reasonable accommodations. This employer-initiated interaction represents an essential step in the decision-making process preceding a dismissal for exceeding the sickness leave. Key Action Points for Human Resources and In-House Counsel Where the employer is aware, or could reasonably be aware, of elements suggesting a possible disability, it should verify whether sickness absences may be connected to that condition and interact with the employee to assess possible reasonable accommodations before proceeding with dismissal; Employees are not required to spontaneously disclose their disability or other sensitive health data; however, once the employer initiates the necessary dialogue, the employee may be required to cooperate in providing relevant information; When a dismissal is declared null for discrimination, the damages regime follows the principles of contractual liability: once the employer’s breach is established, the compensation cannot be reduced merely by assessing the degree of employer’s fault. By Angelo Zambelli

1) The ruling and the principle of law set forth. In its ruling of 5 February 2026 (Case C-810/24), the Court of Justice of the European Union decided against the right of pre-emption in the context of the Italian project financing mechanism, imposing the non-application of said mechanism in Public-Private Partnership procedures. More specifically, the CJEU found said mechanism, provided for by the Italian law on public procurement, which allows the promoter of the project  who was ultimately not awarded the contract at the end of the tender procedure, to obtain the contract by adapting its proposal to the conditions of the best bid, to be incompatible with the EU legislation and principles. The ruling directly concerns the provisions of the previous Article 183, paragraph 15, Legislative Decree 50/2016 (the former Code of public contracts), which gave the promoter the above-mentioned right of pre-emption, with the related obligation to reimburse, within the percentage limit thereby provided for, the expenses incurred by the original successful bidder. The actual scope of the ruling, however, does not only involve the prior Code of public contracts: in fact, its impacts are disruptive with regard to the current legislative framework, as a pre-emption mechanism is still provided for - in a comparable manner - by the current Article 193, paragraph 12, of Legislative Decree 36/2023. 2) Reasons for the decision: ex post modification of the bid and distortion of competition. On the merits, the Court of Justice identified the critical issue in the effects that the pre-emption mechanism has on competition. In fact, the right given to the promoter to adjust its bid ex post to the ranking already established gives it an advantage without providing for any counter-balancing measure to the other bidders, allowing it to intervene on its proposal when the outcome of the competition has already emerged, in violation of the principle of equal treatment between participants, which requires all of them to have the same opportunities when formulating their bids. Conversely, allowing a single operator to “optimize” its bid ex post (i.e. after gaining full knowledge of the conditions of the winner) irreparably collides with the principle of fair competition. At the same time, the Court also highlighted the possible dissuasive effect on participation (the so-called “barrier to entry”), especially for operators established in Member States that are not their States of incorporation, since the uncertainty introduced by the pre-emption mechanism affects the predictability of the outcome of the procedure and, therefore, the interest in participating in it. Furthermore, the principle of transparency, according to the CJEU, requires that the rules be clear and the results definitive. Pre-emption, on the other hand, introduces a phase of uncertainty that undermines the final nature and legal certainty of the award decision. According to the CJEU, the criticisms of the regulatory framework for project financing remain valid even with the provision that allows the original successful tenderer to obtain the reimbursement of the expenses linked to the tender procedure and the initial project creation, as this is an economic corrective measure that does not eliminate the competitive asymmetry caused by the ex post remodulation allowed only to the promoter. 3) The European context and the intervention of the Corrective Mechanism. The issue, however, arose in a context in which guarantees of compliance with the principles of impartiality and transparency in relation to national project finance regulations were already subject to attention at European level. In fact, in a letter of formal notice dated 8 October 2025, the Commission had initiated the relevant infringement procedure, pointing out persistent instances of non-compliance of the Italian legislative framework with the EU directives on public procurement, with specific regard, among other things, to the pre-emption mechanism. Indeed, with the entry into force of Legislative Decree 209/2024 (the so-called "Correttivo Appalti", which amended the Code of public contracts, Legislative Decree 36/2023), the promoter's proposal was subject to a special publicity regime, opening a period for the submission of alternative or competing proposals: the ruling, however, – by fundamentally affecting the pre-emption mechanism and calling into question its compatibility with EU law – makes this intervention, regardless of its relevance from a procedural point of view, nevertheless insufficient in itself to 'save' the mechanism. 4) Conclusions. Following the ruling in question, it will also be necessary to consider the non-application of the provision currently contained in Article 193, paragraph 12, of Legislative Decree 36/2023, as it reproduces the pre-emption mechanism declared incompatible with EU law in the ruling. In this respect, it is also worth noting that the earliest domestic decisions have already begun to extend the implications of the CJEU’s ruling to the corresponding provisions of the new Public Contracts Code. In particular, in Advisory Opinions Nos. 14/2026 and 15/2026, delivered on 26 February 2026, the Emilia-Romagna Regional Court of Auditors stated that, although the CJEU judgment formally concerned Legislative Decree No. 50/2016, the incompatibility identified by the Court stems from fundamental EU principles governing concessions that apply in the same way under Legislative Decree No. 36/2023. On an operational level, this requires Public administrations and economic operators to assess the structure of ongoing and future procedures with caution, including the high risk of litigation and the (in)stability of the award outcome. What remains to be seen is whether, and on what terms, the legislator intends to introduce alternative methods aiming at promoting private initiative mechanisms, as it is pivotal for the Italian State to utilize legislative levers to mobilize privately owned assets, as the economic interest in the investment in public infrastructures and services will play a crucial role in the future development of the Nation.   Edited by: The Administrative Law Team

The Court of Cassation (judgment no. 15023 of 4 June 2025) recently ruled on the abuse of economic dependence in a franchising agreement. This is one of the first rulings by the Supreme Court on this issue, confirming a prevailing trend in case law on the matter. The relevant legal reference is Article 9 of Law 192/1998 on subcontracting, which is also applied by analogy to franchising, which provides: 1. It is prohibited for one or more undertakings to abuse the state of economic dependence of a client or supplier. Such dependence exists when an undertaking causes an excessive imbalance of rights and obligations in commercial relations. Assessment includes evaluating the abused party's ability to find satisfactory market alternatives. Abuse may also consist of refusing to sell or purchase, imposing unjustifiably onerous or discriminatory contractual conditions, or arbitrarily terminating existing commercial relationships. Any agreement that results in the abuse of economic dependence is null and void. The facts underlying the judgment in question stemmed from a franchise agreement relating to the opening and management of a coffee shop, which provided that the franchisee could withdraw from the agreement to avoid automatic renewal only if two conditions were met (purchase of a minimum quantity of coffee and termination of the lease of the commercial property where the business was carried out). The Court of Treviso, in its ruling no. 711/2021, had declared the aforementioned clause null and void, considering that the restrictions imposed on the franchisee to prevent automatic renewal constituted an abuse of its economic dependence on the franchisor and led to an unjustified imbalance between the parties. The Court of Appeal of Venice, in its ruling no. 1730/2021, upheld the first instance decision, with similar reasoning, considering that the elements of 'economic dependence' existed in the case in question (albeit generically and by analogy). The Court's ruling overturned the decision of the Venice Court of Appeal, considering that the latter had not actually verified the existence of the first condition, namely 'economic dependence'. The reasoning is interesting, revealing the liberal inspiration of the judge. In fact, the Court, referring to its own precedent (Cass. 1184/2020), reiterates the strict criteria for the application of Article 9 of Law 192/1998 on the abuse of economic dependence. Since this regulation affects contractual autonomy and goes beyond the principle of entrepreneurial self-responsibility, also taking into account the constitutional principle of freedom of economic initiative, the judge must assess all the factual and legal elements with particular rigour, without substituting his own assessment for that of the parties. In order to establish abuse, two distinct conditions must be met. Firstly, the existence of economic dependence does not coincide with a simple contractual imbalance, which is considered normal, but requires an 'excessive' imbalance in rights and obligations and the effective lack of economic alternatives on the market for the weaker party. Secondly, there must be arbitrary conduct contrary to good faith on the part of the dominant undertaking, i.e. vexatious behaviour aimed at obtaining advantages in addition to those deriving from the legitimate exercise of negotiating autonomy. Not every situation of dependence is prohibited, but only those that are abusively exploited. The burden of proof of the existence of a situation of dependence lies with the party invoking it. In the specific case, the Court criticises the appeal judgment for not having adequately verified the existence of economic dependence at the time of the conclusion of the contract and, indeed, for having reversed the reasoning, in that the lack of real economic alternatives on the market for the franchisee was considered a consequence of the alleged abuse, rather than a prerequisite for economic dependence. The Court of Appeal had, in fact, limited itself to referring to the assessments of the court of first instance, inferring dependence solely from the text of the contract. The Supreme Court therefore quashed the decision and referred it back to the Court of Appeal so that the new judge could ascertain whether, at the time of signing, the contractor was really without economic alternatives and forced to accept excessively unbalanced clauses. In fact, the ruling of the Court of Cassation is in line with the prevailing opinion among local courts, according to which the franchisee, at the time of signing, is not normally without economic alternatives and retains the freedom to accept or reject contractual conditions, even if they are unbalanced, which may be considered inherent in the type of activity to be undertaken, with the consequent exclusion of economic dependence in the absence of the strict conditions required by law. Edited by: Marco Durante

On 18 February 2026, the Council of Ministers approved the so-called “Energy Bills Decree”, which is part of a transformation of the national electricity system that seeks to combine consumer protection with industrial competitiveness and energy security, further influencing energy costs. The regulations relating to data centres were particularly eagerly awaited: the heterogeneity of the parties involved in the authorisation procedures, in addition to the lack of consistency in the regulatory framework, had hitherto led to serious obstacles to the development of data centres in Italy. Furthermore, from a forward-looking perspective, it is necessary to take into account the impact of data centres on electricity grids, given the enormous amount of energy that their operation will consume. The Energy Bills Decree now paves the way for definitive regulation of the sector. The preamble to the Decree refers to the European regulatory framework and, in particular, 'Delegated Regulation (EU) 2024/1364 of the European Commission of 14 March 2024 on the first phase of the establishment of a common Union classification system for data centres', which highlights the coordination between national and European regulations on data centres. Furthermore, the Decree refers to 'the extraordinary need and urgency to introduce measures aimed at promoting the resolution of the virtual saturation of electricity networks and the integration of data processing centres into the electricity system', thus clarifying that the regulatory intervention is intended to address the growing impact of digital infrastructure on the electricity grid. It is in this context that Article 8 of the Decree, dedicated to the authorisation profile of data centres, is introduced. The aforementioned provision stipulates that authorisation for the construction and expansion of data centres, as well as for the related user connection networks, of any voltage, is now granted through a single procedure by the authority competent to issue the integrated environmental authorisation (AIA). For projects already submitted to regional or provincial AIA procedures, the power to issue the authorisation will not be delegated to sub-provincial authorities. These provisions suggest that the decision to concentrate authorisation powers in this area in the hands of the AIA authority responds to the need to ensure a qualified technical assessment that avoids fragmenting the decision-making process, which, as we have seen, has been one of the main critical issues for the development of data centres to date. In order to obtain the single authorisation, the applicant is required to attach to the application all the documentation and project plans required by the specific sector regulations for the issue of authorisations, agreements, licences, opinions, concerted actions, clearances and approvals, including those necessary for integrated environmental authorisation, environmental impact assessment, landscape or cultural authorisation, water use and atmospheric emissions. In the case of projects subject to environmental impact assessment ('EIA'), the application must also contain a public notice certifying the submission of the application, indicating any consent required. This establishes a model in which the competent authority coordinates all the necessary assessments within a single procedure. The Decree also sets a specific time limit for the conclusion of the single procedure. In fact, this procedure shall not exceed ten months from the verification of the completeness of the documentation, while the deadlines for environmental impact assessments are halved. The ten-month deadline may be extended only in exceptional circumstances and in any case for a maximum of three months, depending on the nature, complexity, location or scope of the project. Authorisation is granted following an (asynchronous) service conference attended by all the competent authorities, including those responsible for environmental protection, landscape, cultural heritage, health and public safety. However, if the project is declared to be of national strategic interest, the single authorisation, which replaces any other necessary title, is granted in a single procedure under the jurisdiction of the Government's Special Commissioner for the implementation of investment programmes of national strategic interest. With regard to the connection of data centres to the electricity grid, for projects requiring a connection with a voltage exceeding 220 kV and which, as of the date of entry into force of the Decree, have already obtained the necessary permits, including environmental measures, the authority responsible for authorising the connection works is identified as the region concerned, or, in the case of works extending across several regions, the competent authority is the region in which the majority of the works are to be carried out.. The Decree therefore introduces an authorisation framework that establishes clear deadlines for the completion of the procedure and concentrates the relevant assessments within a limited decision-making body. The challenge of this Decree and, in general, of all the legislation that will regulate data centres, is and will remain that of ensuring their integration into the national electricity system, which is subject to structural constraints and must safeguard the security and sustainability of the grid. Edited by: The Energy & Environmental Law Team