Italy: 2026, the year ahead for employers

By Angelo Zambelli

The year 2025 is marked by important developments in the field of labour law with significant repercussions also expected in 2026.

Following the numerous rulings throughout 2024, the Italian Constitutional Court again reviewed the Legislative Decree no. 23/2015 (Provisions on permanent employment contracts with increasing protection over time, implementing Law no. 183/2014, the so called “Jobs Act”), this time with reference to the maximum cap of six months’ salary in cases of unlawful dismissals for employers with fewer than fifteen employees.

Law no. 106/2025 introduces significant innovations concerning the safeguards granted to employees, both in the public and private sectors, who are affected by oncological, chronic, or disabling conditions. With the aim of reconciling therapeutic needs with continuity of employment, the legislator introduces a set of innovative measures: a twenty-four-month period of extraordinary leave, in addition to that already provided for by law and collective bargaining agreements; a priority right to access remote working arrangements; and new forms of paid leave for medical examinations and therapeutic treatments.

With judgement no. 156/2025, the Italian Constitutional Court once again addresses Article 19 of the “Workers’ Statute,” expanding its scope by granting trade unions with a high level of representativeness the possibility to establish company-level union representatives, regardless of whether they signed and/or participated in the negotiation of the collective agreement applied in the company.

The new Law Decree no. 159/2025 entered into force on October 31, 2025, the day of its publication, introduced urgent changes in the field of training, promotion, and spread of principles on health and safety in the workplace with strengthened protections and applicable penalties.

On 1 August 2024, the European Regulation on Artificial Intelligence (the AI Act) entered into force, marking a crucial milestone in the governance of artificial intelligence in Europe. In Italy, the AI Act has been recently implemented through Law no. 132/2025, which, in line with the provisions of the European Regulation, sets out principles, obligations, and sanctions to ensure the ethical and responsible use of AI. The new law introduces clear rules designed to promote innovation and competitiveness while safeguarding fundamental rights, protecting workers, and fostering broad digital literacy, as well as establishing specific provisions for sectors such as healthcare, justice, national security, and employment.

1. New interventions of the Italian Constitutional Court on the so-called “Jobs Act” in 2025

Decision no. 118/2025: Article 9, paragraph 1, of Legislative Decree no. 23/2015 is unlawful

The Constitutional Court, with ruling no. 118 of 21 July 2025, has returned to rule on the Legislative Decree No. 23/2015 (so called “Jobs Act”), and in particular on its Article 9, paragraph 1, which for unlawful dismissals served by employers with less than fifteen employees provided compensation protection reduced compared to the ordinary indemnities and up to a maximum of six months’ salary.

Specifically, the case under exam concerned the dismissal of an employee, hired after 7 March 2015, by a company with less than fifteen employees.

The referring Livorno Court held that the indemnity “constrained within a very narrow range, from three to six months’ salary” conflicted, among other things, with the fundamental constitutional principles of equality and reasonableness.

The Constitutional Court, partially confirming the issue raised by the Livorno Court, declared unconstitutional Article 9, paragraph 1 where it provides that compensation for unlawful dismissal in smaller companies “may not in any case exceed the limit of six months’ salary.”

In particular, according to the Livorno Court, this provision creates not only an unjustified disparity in treatment compared to workers employed by bigger companies – who are entitled to either reinstatement and compensation protection, or compensation protection alone for up to thirty-six months’ salary – but also a “standardized protection” that precludes any “personalization of compensation” and, because it is too small, is unsuitable to “guarantee its adequacy and fairness, as well as its deterrent role.”

The Constitutional Court highlights that the most recent ISTAT data (2023 Yearbook) reinforces the urgency of the requested intervention, showing that this regulation concerns “almost all national businesses” (805 thousand units, equal to 78.9% of the total companies studied, are micro-businesses).

The Constitutional Court, in its ruling no. 183 of 2022, had already identified Article 9, paragraph 1 as “infringing” the aforementioned constitutional principles – consider that a differentiated regulation for companies below the threshold of fifteen employees does not prevent the judge from taking into account, within a “sufficiently broad and flexible” range (3-18 months’ salary, or 1-6 months for formal defects), the specificities of each individual case.

However, regarding the provision for a maximum of six months’ salary, the Court noted that such a limit results in a sort of automatic lump sum, incapable of ensuring “effective deterrence” and effective compensation proportionate to the damage suffered by the worker, nor of taking into account the specific nature of each individual case. Therefore, while maintaining the provision for halving the indemnity, the Constitutional Court declared Article 9, paragraph 1 of Legislative Decree 23/2015 unconstitutional, limited to the words “and may not in any case exceed the limit of six months’ salary.”

The floor, therefore, could now be returned to the legislator. The Court, in closing, expressed its hope for such intervention, taking into account the principle according to which the number of employees cannot constitute the exclusive indicator of the economic strength of the employer “and therefore of the sustainability of the costs associated with unlawful dismissals.”

Although unlawful dismissals in companies with less than fifteen employees remain sanctioned with indemnities reduced by half in respect to those established for bigger companies, the statutory cap of maximum six month’ salary is not applicable after the Constitutional Court’s declaration of unconstitutionality.

2. Law no. 106/2025: strengthening protections for employees affected by oncological, chronic or disabling diseases

Law no. 106/2025, in force since 9 August 2025, introduces significant innovations concerning the safeguards granted to employees affected by oncological, chronic, or disabling diseases. The aim pursued by the Legislator is to expand and enforce the forms of protection accorded to particularly vulnerable individuals, enabling them to reconcile the need to preserve their employment relationship with the necessity of undergoing medical treatments, which are often invasive and prolonged.

• The pre-existing regulatory framework

Law no. 106/2025 is part of a regulatory framework already partially structured to protect individuals affected by serious illnesses similar to those targeted by the new legislation.

Article 2110 of the Civil Code, integrated by collective bargaining agreements, regulates the so-called “periodo di comport,” i.e. the period during which employees may be absent from work due to illness while retaining the right to keep their job.

Another fundamental reference concerning assistance, social integration and the rights of people with disabilities is Law no. 104/1992. In particular, Article 33, paragraph 3 recognizes the right of employees, both in the public and private sectors, to take three days of paid leave per month to assist a person with a severe disability (protecting the so-called caregiver). Article 33, paragraph 6 on the other hand, guarantees adult employees with a serious disability the right either to two hours of daily leave or to three monthly days of paid leave.

Particularly relevant for employees affected by oncological diseases is Article 8 of Legislative Decree no. 81/2015, which grants both employees with a severe disability and caregivers the right to convert a full-time employment contract into a part-time one, with the possibility to revert to the previous hourly schedule. In addition, a well-established case law requires employers to adopt “reasonable accommodations” pursuant to Article 5 of Directive 2000/78/EC in order to enable vulnerable employees and those providing assistance to continue working.

Hence, Law no. 106/2025 introduces three key innovations aimed at further strengthening the protections already afforded to employees with oncological, chronic, or disabling conditions.

• Job retention through extraordinary leave

Article 1, paragraph 1 establishes that employees, both in the public and private sectors, who are affected by oncological, disability, or chronic diseases and who have a recognized disability rating of at least 74% may request extraordinary leave, either continuous or split, for a maximum duration of 24 months. During this period, the employee maintains the right to job retention, even if no salary is paid.

The use of such leave is subject to the prior expiry of any other forms of justified absence, whether paid or unpaid, provided for by law or applicable collective bargaining agreements (including the “periodo di comporto” and unpaid leave). Consequently, extraordinary leave operates as a residual measure, available only once ordinary mechanisms have been exhausted.

Although this period is not counted for seniority or social security purposes, it may be redeemed by the employee.

Article 1, paragraph 2 sets out the requirements for medical certification, which must be issued either by the employee’s general doctor or by a specialist operating within a public or accredited private healthcare facility treating the employee.

Paragraph 3 extends the protection to self-employed employees, granting them an entitlement to extraordinary leave of 300 days per calendar year, instead of the 150 days available for other illnesses.

• Priority access to remote work

Article 1, paragraph 4 establishes a priority right to access remote-working arrangements for employees who have taken extraordinary leave, provided that the duties assigned to them are compatible with such organisational modality. This provision reinforces the logic of adapting work organisation to therapeutic needs, in line with recent developments in flexible and inclusive work models.

• Paid leave for medical examinations and treatments

Article 2 of Law no. 106/2025 grants employees who meet the requirements under Article 1, paragraph 1 an additional ten hours per year of paid leave to undergo medical appointments, diagnostic tests, and microbiological examinations. The same protection is extended to employees with minor children affected by oncological, chronic, or disabling diseases, thereby broadening the scope of protection to include parental caregivers. These leave entitlements follow the existing regulatory framework applicable to severe illnesses requiring life-saving therapies, including the right to economic compensation in accordance with current legislation. This provision will enter into force on 1st January 2026.

3. The Italian Constitutional Court has once again ruled on trade union activity within companies

Article 19 of Law no. 300 of 1970, the so-called “Workers’ Statute,” governs the requirements for the establishment of company-level trade union representatives (Rappresentanze Sindacali Aziendali – RSA).

In its original wording, Article 19 provided that RSAs could be established at the initiative of workers in each production unit within:

1. a) trade unions affiliated with the most representative national confederations;
2. b) trade unions not affiliated with such confederations, provided that they had signed national or provincial collective agreements applied in the relevant production unit.

This version of Article 19 was first amended following a popular referendum by Presidential Decree no. 312 of 28 July 1995, which repealed the reference to the most representative national confederations under point a).

Subsequently, with Judgement no. 231 of 23 July 2013, the Constitutional Court declared the unconstitutionality of point b) of Article 19 insofar as it did not allow for the establishment of RSAs also within trade unions that, although not signatories of collective agreements applied in the company, had nonetheless participated in the negotiation of such agreements.

Case law has clarified that “trade unions that have signed collective agreements applied in the production unit” must be understood as trade unions that have entered into collective agreements at any level (national, provincial, or company level), provided that such agreements are of a normative nature and, therefore, suitable to demonstrate the level of representativeness required by the statute.

Moreover, the Court of Cassation has held that, for the purposes of establishing a company-level trade union representation, the collective agreement signed by the trade union must be effectively applied within the production unit in its entirety and not only in part.

In October 2025, the Constitutional Court once again intervened on Article 19 of Law no. 300/1970, further extending its scope of application. With Judgment no. 156 dated 30 October 2025, the Court declared the provision unconstitutional insofar as it failed to allow the establishment of RSAs, at the initiative of workers in each production unit, also within trade unions that are comparatively the most representative at national level, regardless of whether they had signed or participated in the negotiations leading to the signing of the collective agreements applied within the company.

Accordingly, the establishment of an RSA must necessarily take place at the initiative of the workers.

Secondly, an RSA may now be established:

• within trade unions that are signatories of collective agreements applied in the relevant production unit;
• within trade unions that, although not signatories of such collective agreements, have nonetheless taken part in the relevant negotiations as representatives of the company’s workers;
• or, alternatively, within trade unions that are comparatively the most representative at national level.

As a consequence, the right to establish an RSA within a company has been detached from the exclusive criteria of signing or participating in the negotiation of collective agreements. Such criteria, in fact, could have resulted in the exclusion from company life of representative trade unions, since the employer could refuse to admit non-favoured trade unions to collective bargaining.

In this perspective, the Constitutional Court held that Article 19 of Law no. 300/1970 was in breach of Articles 3 (principle of equality) and 39 (freedom of trade union organisation) of the Constitution, as well as of the general principles of reasonableness and pluralism. These principles are more effectively safeguarded by allowing the establishment of RSAs by trade unions that are most representative at company level, even where they did not participate in the execution of the applicable collective agreement.

4. Health and safety urgent measures pursuant to the new Law Decree no. 159 of 31 October 2025

Strengthening of the occupational health and safety system as a priority

The issue of workplace safety is a constant priority and requires continuous and urgent actions to prevent accidents from occurring, especially in the most exposed production sectors, such as agriculture and construction. This is the rationale behind the new Law Decree no. 159/2025, which has introduced the following new changes.

Article 3 – supervisory activities relating to procurement and subcontracting, construction site badges and credit-based licences

Employers operating as contractors and subcontractors on construction sites and in other high-risk sectors (to be identified by a subsequent decree) are obliged to provide workers with an identification card with a unique anti-counterfeiting code, also in digital format and interoperable with the SIISL platform (Information System for Social and Labour Inclusion), with the aim of increasing the traceability and effectiveness of controls. The measures relating to the points-based license are also being tightened, with faster reductions of points, upon notification of the assessment report issued by the competent supervisory bodies, and a doubling of the administrative penalty (from Euros 6,000 to Euros 12,000). In addition, in the preliminary notification of construction sites the obligation to indicate the companies already selected to be present on site requires to specify those operating as subcontractors.

Article 4 – Strengthening of the National Labour Inspectorate

The National Labour Inspectorate is authorised, for the years 2026, 2027 and 2028, to hire 300 staff members on permanent contracts to be classified as officials under the current National Collective Agreement, Central functions sector, professional category: ordinary surveillance inspector and technical health and safety surveillance inspector.

Article 5 – prevention and training

Legislative Decree 81/2008 and collective bargaining agreements already provide for specific information, education and training obligations for employees, executives and safety officers (preposti). A new requirement for periodic training for Workers’ Safety Representatives (RLS – Rappresentanti dei Lavoratori per la Sicurezza) is introduced even in companies with fewer than 15 employees. For these entities national collective bargaining agreements regulate the procedures for such periodic updating in accordance with the principle of proportionality, taking into account the size of the companies and the level of health and safety risk arising from the activity carried out. Training activities must be recorded both in the employee’s electronic file and of the citizen’s social and employment file (fascicolo sociale e lavorativo del cittadino), both of which are linked to the SIISL. This regulation strengthens the central role of the Workers’ Safety Representative, an individual through whom employees exercise their right to monitor the application of accident prevention regulations and to promote the adoption of appropriate measures to protect their health and physical integrity.

Article 7 – Insurance coverage and student safety in school-work programs

Such section sets forth that law provisions on INAIL (the National Institute for Insurance against Accidents at Work) are interpreted so that INAIL insurance covers any accidents occurring on the way from the student’s home or other place of residence to the place where the school-work training courses are held and from the latter to the student’s home or place of residence. Furthermore, school-business agreements cannot provide for the employment of students in high-risk jobs identified in the risk assessment document of the host company.

Article 15 – Strengthening the culture of prevention and tracking near misses

Guidelines are to be adopted for tracking and analysing near misses (mancati infortuni) in companies with more than 15 employees.

A decree issued by the Minister of Labour and Social Policies shall identify the procedures through which the companies shall communicate aggregate data relating to events reported as near misses and the corrective or preventive actions taken to improve safety, as well as the criteria useful for the annual preparation of a national monitoring report on near misses, including for the purpose of defining training and technical support measures for companies.

Article 17 – Health surveillance and health promotion

Health surveillance visits are now counted as working hours (except for pre-employment visits).

Health surveillance carried out by the company has been introduced also in cases of reasonable suspicion of alcohol/drug use by employees assigned to for high-risk activities.

Regarding the company doctor’s tasks, it is now specified that the doctor provides employees with information on the importance of cancer prevention, promoting participation in cancer screening programmes provided for by the essential levels of care (LEA), informing employees about their purpose and usefulness, including with the support of information campaigns promoted for this purpose by the Ministry of Health.

5. The European AI Act and its implementation in Italy

The Artificial Intelligence Act (AI Act) is aimed at establishing harmonised rules for the development, deployment, and usage of artificial intelligence (AI) within the European Union. As other EU directives already did in the past, it introduces a risk-based regulatory framework intended to address the socio-economic benefits of AI while mitigating risks to fundamental rights and safety. For Italy, this regulation is especially relevant given its significant labour law impacts and the potential transformations AI can bring to employment practices.

How does it work?

The AI Act adopts a risk-based approach, categorising AI systems into four levels of risk: minimal, limited, high, and unacceptable. Systems falling into the “unacceptable risk” category are outright prohibited, while high-risk systems, which include many workplace-related applications, are subject to stringent requirements.

The annexes, particularly Annex III, identify high-risk AI systems. These include those used in employment, worker management, and access to self-employment opportunities. Examples include systems for recruitment, performance evaluation, task allocation, promotion decisions, and monitoring worker behaviour.

How has the AI Act been implemented in Italy?

In September 2025, Italy enacted Law no. 132/2025, which supplements the regulatory framework of the AI Act, fitting coherently within the broader framework of the European Union’s legislative initiatives.

The mentioned new regulation seeks to govern technological development in an ethical and competitive manner, with the aim of harnessing the opportunities offered by artificial intelligence while simultaneously mitigating its risks. On the one hand, it promotes research, experimentation, and the adoption of AI systems as tools for innovation and for increasing the country’s competitiveness. On the other hand, it imposes rigorous oversight on economic and social risks and, above all, on the impact that these technologies may have on individuals’ fundamental rights.

The core principles of the Italian new legislation may be summarised as follows:

• Anthropocentric principle and human oversight: AI systems and models must be developed and deployed in full respect of human autonomy and decision-making power.
• Transparency and explainability: the functioning of the algorithms on which AI relies must be comprehensible so that automated decisions can be verified.
• Security and cybersecurity: it is necessary to ensure the safety, reliability and resilience of AI systems, preventing malfunctions, malicious attacks and improper uses.
• Proportionality and non-discrimination: the use of artificial intelligence must always be proportionate to the purposes pursued and must never generate or amplify biases or discrimination.
• Sustainability and inclusion: artificial intelligence must be environmentally and socially sustainable.
• Protection of democratic principles: the use of artificial intelligence must not in any way jeopardize the proper conduct of democratic debate, nor interfere with electoral processes or the functioning of institutions, thereby preventing the use of technology for disinformation or manipulation purposes.

With regard specifically to the workplace, Law no. 132/2025 takes into account the fact that the increasing deployment of AI systems – particularly in activities concerning the recruitment, management, evaluation and termination of personnel – has made it necessary to introduce an organic regulatory framework aimed at defining concrete criteria for their use. Accordingly, in coordination with the AI Act, as well as with existing national legislation (namely the “Workers’ Statute” and Legislative Decree no. 152/1997 as amended by Legislative Decree no. 104/2022), Law no. 123/2025 lays down rules governing the use of AI in employment contexts.

In particular, Article 11 of the new mentioned Italian law provides that:

• AI must be employed “to improve working conditions, safeguard the physical and psychological integrity of workers, and enhance the quality of work performance and productivity”;
• AI “must be safe, reliable, transparent, and may not operate in a manner contrary to human dignity nor infringe the confidentiality of personal data”: for this reason, the mentioned law provision imposes on the employer to provide prior written notice to employees in the cases and in the manner set out in Article 1-bis of Legislative Decree no. 152 of 26 May 1997. Legislative Decree no. 152/1997 introduces certain information obligations towards employees and  the company-level trade union representatives (and, in their absence, the local offices of the comparatively most representative national trade unions) in the event of use of fully automated decision-making or monitoring systems designed to provide indications relevant to hiring or assignment or management or termination of the employment relationship, or to the allocation of tasks or duties, as well as indications affecting the supervision, evaluation, performance and fulfilment of employees’ contractual obligations;

• Compliance must be ensured with “the inviolable rights of the worker, without discrimination on grounds of sex, age, ethnic origin, religious belief, sexual orientation, political opinion or personal, social and economic conditions, in accordance with European Union law.”

The above is without prejudice to the fact that AI systems monitoring employees’ performance must also comply with the existent stringent Italian regulations on privacy (as governed by the GDPR and the relevant national legislation) and on remote monitoring of employees (Article 4 of the Workers’ Statute), with which the AI Act and Law no. 132/2025 must necessarily coexist and be integrated.

Finally, it should be noted that Italy has ongoing debates around the classification of gig workers, with court rulings sometimes redefining employment relationships. AI tools used in gig platforms for task allocation or rating systems may come under scrutiny to ensure compliance also with AI Act and Law no. 132/2025.

What are the AI law provisions main challenges and opportunities?

The implementation of the AI Act introduces a mix of hurdles and avenues for improvement within the Italian labour law framework. On the one hand, compliance with the stringent provisions for high-risk AI systems may result in significant financial and administrative burdens for businesses, particularly small and medium enterprises, which are the backbone of Italy’s economy. The obligation to ensure continuous oversight, along with the necessity for constant system updates to align with regulatory requirements, could impose operational strains that could potentially be an obstacle to innovation and may slow AI adoption in certain industries (especially in companies with a lower digital confidence),

On the other hand, the AI regulations offer substantial opportunities to redefine trust and equity within the workplace. By enforcing robust accountability standards for AI, the regulations will strengthen worker confidence in automated systems. This regulatory clarity can serve to harmonise technological advancement with labour rights, ultimately cultivating a workplace environment that embraces innovation while upholding fairness and dignity.Inizio modulo

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