Italy: Employee Termination Rules to Be Eased

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By Eric J. Lyman

Oct. 15—Italian Prime Minister Matteo Renzi won a risky confidence vote in Italy’s Senate in the early hours of Oct. 9, opening the door for him to revamp part of the country’s controversial labor statutes.

Since becoming prime minister in February, Renzi has said that introducing more flexibility into the country’s rigid labor laws is a priority of his government. Current law makes it difficult to lay workers off, and if a judge rules a worker was fired unjustly, companies with at least 16 workers are required to rehire the worker and pay wages lost during the time the worker was away from the job.

Critics of the current law say it makes companies less likely to take on new workers, while supporters say it protects workers against potential abuses.

A Contentious Vote

The confidence vote in the Senate was risky because if Renzi had lost he would have been forced to resign. The measure must still pass the lower house of parliament—where Renzi’s party has a larger majority—in order to become law. Analysts said passage was likely, but labor unions have called for a massive national strike and protests for Oct. 25 to mobilize support against the reform.

The vote was contentious, with senators shouting, hissing and throwing objects. In the end, the measure passed 165-111.

The plan would change the laws for workers laid off for economic reasons, but would not affect workers fired for reasons related to competence. Under the terms of the reform, workers laid off because their employer is struggling economically can still protest the decision. If a judge rules the firing was unwarranted, the company would not be required to take the worker back or pay for lost wages, but might be liable for a larger severance package.

The vote came in the wake of the Oct. 8 European Union jobs summit in Milan, where European leaders including German Chancellor Angela Merkel, France’s Francois Hollande and European Commission President Jose Manuel Barroso congratulated Renzi on an important victory they said would make Italy more competitive by making it easier for companies to take on new workers.

To contact the reporter on this story: Eric J. Lyman in Rome at

To contact the editor responsible for this story: Rick Vollmar at

For more information on HR law and regulation, see the Italy primer.


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