Italian labor law sets out specific notice periods that employers must follow when terminating employment. The notice period in Italy is primarily dependent on two factors: the Collective Bargaining Agreement (CBA) and the Italian Civil Code (Articles 2118-2121).

Collective Bargaining Agreement (CBA)

In most instances, the relevant CBA for the employee's sector or industry determines the notice period. These agreements typically set out notice periods based on factors such as the employee's length of service and their position within the company. For example, a metal worker's union CBA might specify a 10-day notice period for employees with less than a year of service and a 30-day period for those with more than five years.

Italian Civil Code (Articles 2118-2121)

If no applicable CBA exists, the general provisions of the Civil Code determine the notice period. These provisions establish a minimum notice period of 15 days for employees with less than six months of service and one month for employees with six months or more of service. It's important to note that the CBA notice period generally supersedes the minimums set by the Civil Code, potentially providing a longer notice period for the employee's benefit.

Exceptions to Notice Periods

There are certain exceptions where notice periods may not apply or may be shortened. If an employee commits a serious offense that justifies immediate dismissal, such as gross misconduct or violation of company policies, no notice period is required. Additionally, when both the employer and employee agree to terminate the employment contract, they can mutually decide on a shorter notice period or waive it entirely.

Importance of Written Notice

Regardless of the specific notice period, Italian law mandates that termination notices must be provided in writing to the employee. This written notice should clearly state the termination date and, in cases of dismissal with notice, the reason for termination.

In Italy, employees are entitled to severance pay, known as the Trattamento di Fine Rapporto (TFR), upon resignation or termination, regardless of the reason.

TFR Accrual and Calculation

Every year, employers are required to set aside a portion of the employee's salary as TFR in a company or external fund. This amount accrues throughout the employment duration and is payable upon termination. The calculation is done by setting aside 6.91% of the employees' annual gross salary for each year of service. This amount is then revalued annually by 1.5% plus 75% of the Italian inflation rate (ISTAT index).

Payment of TFR

The TFR is generally paid out in the following situations:

• Termination: The full accrued TFR is paid to the employee upon termination of the employment relationship, regardless of the termination reason.
• Retirement: Upon retirement, employees receive the full TFR.
• Advance Payments: Under specific conditions, such as purchasing a primary residence or facing significant medical expenses, employees may request a portion of their accrued TFR in advance.

Key Notes

Specific Collective Bargaining Agreements (CBAs) might offer more favorable TFR terms than the legal minimums. If the company manages the TFR, employees retain the right to transfer their TFR to an external fund if they desire.

For complex TFR calculations or specific situations, it's advisable to seek professional guidance from a labor law expert or accountant. The Italian Civil Code (Articles 2120 and 2121) and the National Institute of Social Security (INPS) are authoritative sources for further information.

Italian labor law provides a structured framework for both employers and employees during the termination process. Here's a breakdown of the key stages:

Types of Termination

• Dismissal for Just Cause (Giusta Causa): Immediate dismissal for severe misconduct, such as theft, insubordination, or violence. No notice or severance pay is required.

• Dismissal for Justified Objective Reason (Giustificato Motivo Oggettivo): Dismissal due to economic, technical, or organizational factors that render the employee's role unnecessary.

• Dismissal for Justified Subjective Reason (Giustificato Motivo Soggettivo): Dismissal due to poor performance, breach of contract, or other employee-related issues.

• Resignation: Voluntary termination of employment by the employee.

Mandatory Procedures

1. Written Notice: The termination must be communicated in writing, including:
   • Reason for termination: Only if it's a dismissal, not resignation.
   • Effective termination date: With respect to the required notice period.

Employee Rights

• Right to Challenge: Within 60 days of termination, an employee may challenge a dismissal in court.

Important Considerations

• Collective Bargaining Agreements (CBAs): CBAs often provide additional protections and benefits beyond the legal minimums during the termination process.
• Special Protections: Certain categories of employees (pregnant women, disabled workers) have enhanced protection against dismissal.