14 May 2025
Industrial relations
More voice and more profits for workers: the law on employee participation in companies has been approved

On 14 May 2025, the Senate definitively approved a law introducing a comprehensive set of provisions aimed at promoting employee participation in company life. The measure seeks to strengthen the role of labour in business management and performance, upholding the constitutional principle of collaboration between parties.

The new legislation recognises four areas of participation: managerial, economic and financial, organisational, and consultative. It encourages the inclusion of workers’ representatives on boards of directors and supervisory boards, where allowed by corporate governance structures and collective agreements.

Economically, the law introduces tax incentives for companies that distribute at least 10% of profits to employees and for schemes that allocate shares instead of performance bonuses.

From an organisational perspective, companies will be able to establish joint committees to promote innovation in processes and work quality. The law also strengthens the role of prior consultation with workers’ representatives before significant business decisions are made.

This legislation marks an important step toward more inclusive business models, where the contribution of workers becomes an integral part of corporate strategy.

14 May 2025
Industrial relations
Managerial participation: workers in corporate bodies between voluntariness and collective bargaining

The new law, stemming from a popular initiative implementing Article 46 of the Constitution, introduces in Chapter II two models of managerial participation for workers: membership on the supervisory board and on the board of directors. This is an “organic” type of participation, as it involves workers’ representatives in the strategic leadership of the company.

However, both options remain voluntary. Their adoption is determined by the company’s articles of association, with no legal obligation and a clear renunciation of any mandatory provisions, including for publicly owned companies, as originally envisaged. Adoption is thus left to the free initiative of business owners.

Nonetheless, the role of collective bargaining remains central. It serves a decisive regulatory function: on the one hand, it can govern the procedures for appointing workers’ representatives; on the other, it can define additional requirements of independence, integrity, and professionalism beyond those set by the company’s articles.

The law also allows for workers participating in financial involvement schemes to have their own specific representative, but leaves it to collective bargaining to determine the implementation methods, also to prevent conflicts between different forms of representation.

14 May 2025
Pay and benefits
From profits to shares: new fiscal incentives for workers’ economic participation

The law stemming from a popular initiative implementing Article 46 of the Constitution, in Chapter III, addresses workers’ economic and financial participation, revitalising existing tools through new tax measures.

There are two main areas: profit sharing and share ownership. The first concerns direct profit distribution to workers. For 2025 only, if a company allocates at least 10% of its profits to employees, the amount eligible for tax relief increases from €3,000 to €5,000, provided the measure is included in a company or local collective agreement.

The second area involves capital participation through financial instruments, including the allocation of shares to employees. One notable innovation is the tax-incentivised option to convert performance bonuses into shares. In this case, the converted amount is tax-exempt up to €3,000 (or €4,000 in the case of equal involvement), with the possibility to combine these thresholds with standard employee share ownership limits.

A distinction is made between performance bonuses and profit sharing: the former depends on measurable improvements in company performance (gain sharing), whereas the latter is based on objective accounting data, independent of incremental evaluations. The law clearly differentiates the two tools, favouring — albeit temporarily — the second.

14 May 2025
Industrial relations
Joint committees and innovation: organisational participation in companies

In line with the popular initiative law implementing Article 46 of the Constitution, Chapter IV introduces a model of organisational participation for workers, focused on involvement in decisions regarding the improvement and innovation of processes, products, and work organisation.

The mechanism provided is that of joint committees, composed equally of company and worker representatives. Initially designed with decision-making powers, their role has been scaled back to advisory and proposal-making functions. These committees can be set up at the company’s initiative or through collective bargaining, especially in workplaces with union representation.

While the law does not specify details on their composition or functioning, there remains strong interest in regulating them through collective agreements to ensure their effectiveness and sustainability. The experience of numerous collective agreements already in force — particularly in the metalworking, textile, chemical, and retail sectors — demonstrates the feasibility of participatory tools focused on innovation.

For companies with fewer than 35 employees, the law encourages the use of bilateral bodies to support these participation forms, showing attention to small production entities as well.

14 May 2025
Industrial relations
Consultative participation: the new frontier of dialogue between companies and workers

Chapter V of the popular initiative law implementing Article 46 of the Constitution outlines an advanced model of consultative participation, based on joint committees and firmly anchored in collective bargaining.

Consultation is not automatic: it is activated only where foreseen by collective agreements and primarily involves union representatives. In their absence, the discussion can be carried out by workers’ representatives supported by local structures of bilateral bodies.

The law sets out a minimum procedure timeline: the meeting must be convened within five days of the request, with the option to attach a written opinion to the meeting minutes, and the employer is required to provide reasoning and reconvene the committee in case of disagreement. The entire process must be concluded within ten days.

Unlike previous laws, the new legislation does not impose mandatory consultation topics. Everything — timing, content, and procedures — is left to collective bargaining. However, the workers’ opinion — although not binding — gains legal and evidentiary value and may serve as a starting point for a subsequent structured negotiation.

In this way, consultative participation acts as a bridging tool, reinforcing the role of collective bargaining and fostering a mature dialogue between companies and workers’ representatives.

8 April 2025
Employment contract – Ancillary agreements
Non-compete agreements must be assessed at the time of signing, not at the end of the employment relationship
Court of Cassation, Labour Section

A bank filed a lawsuit to prevent a former employee from engaging in competitive activities with another bank until the natural expiration of a non-compete agreement and to claim damages.

The Court of Appeal rejected the claim, considering the agreement null and void due to its vagueness and the inadequacy of the compensation, as assessed at the end of the employment relationship.

The Court of Cassation instead ruled in favour of the bank, clarifying that the non-compete agreement, even if signed at the same time as the employment contract, remains causally autonomous from it.

Therefore, since the compensation is the payment for this separate obligation of “not doing,” its adequacy must be evaluated ex ante, that is, based on the terms of the agreement at the time of signing, not on how the relationship later evolves. Based on this reasoning, the Supreme Court upheld the bank’s appeal and overturned the challenged ruling.

18 April 2025
Employee monitoring
Investigative monitoring is lawful when aimed at uncovering fraudulent employee behaviour
Court of Cassation

An employee was subjected to surveillance by a private investigation agency hired by the employer to verify suspected misconduct outside company premises. Both the Naples Court and the Court of Appeal deemed the employer’s actions legitimate, ruling that the monitoring was not aimed at verifying work performance.

The Court of Cassation confirmed this interpretation, reiterating that employer-ordered surveillance, when conducted outside the workplace and aimed at uncovering criminally relevant or fraudulent behaviour, is fully lawful.

In particular, the Court excluded the need to comply with the limits imposed for ordinary defensive checks, since the surveillance was aimed at protecting the company’s assets against potentially unlawful conduct.

This decision aligns with well-established case law that distinguishes defensive controls from performance-related controls, allowing the former even without the safeguards required by the Workers’ Statute, provided they are intended to protect the employer from fraud.