Planning for the Executive in Italy: Dismissal & Restructuring

International groups operating in Italy often assume that Italian law treats all employees as a single, homogeneous category governed by one set of rules. This is not the case, and the divergence is at its sharpest for corporate executives, the dirigenti.

The dirigente occupies a legal position that lies, to a significant extent, outside the statutory dismissal-protection regime applicable to other employees and is instead governed by a combination of the Civil Code and sector collective bargaining. The practical consequence is frequently counterintuitive for foreign employers as the executive who appears, on paper, to be the most freely dismissible member of the workforce is frequently the most expensive and the one whose dismissal most frequently gives rise to litigation and significant indemnity exposure. Notwithstanding, a formally broader freedom to dismiss with notice under Article 2118 and 2119, courts now subject executive dismissals to intensive scrutiny, particularly where the employer relies on generic restructuring or loss of trust without a properly documented factual basis.

Although the formal statutory framework might suggest a broader freedom to terminate executive employment, in practice courts subject executive dismissals to intensive scrutiny against the ‘giustificatezza’ standards, the duty of good faith and the prohibition of abuse of rights, so that dismissals cannot be treated as akin to an ‘at will’ regime.

This article addresses the framework as it applies to executives: 

• how they are classified
• how and on what terms they may be dismissed
• how the applicable national collective bargaining agreement (CCNL) shapes their protection
• how they are now drawn into collective redundancy procedures
• which social safety nets reach them
• and what all of this means for a multinational planning a restructuring in Italy

It is intended for executives and for the employers who manage them. Where the outcome depends on the applicable CCNL, the individual contract or the specific facts, this is stated expressly rather than assumed.

The Dirigente as a Distinct Category

Italian law classifies subordinate employees into four categories under Article 2095 of the Civil Code: dirigenti (executives), quadri (middle managers), impiegati (white-collar employees) and operai (blue-collar workers). 

Traditionally, the dirigente is the employee who operates with broad autonomy and discretion as a close collaborator of the entrepreneur, contributing to the direction of the enterprise. This is what sets the executive apart from the quadro and the impiegato, who, however senior, remain within the standard statutory protection regime.

Two features distinguish the executive’s position and recur throughout this article:

• the executive’s relationship is governed, at statutory level, by the general Civil Code rules on termination with notice and for just cause, rather than by the specific dismissal-protection statutes that cover other categories; and
• that statutory framework is materially qualified by collective bargaining, which provides the executive’s concrete protection

A critical caveat concerns classification itself. Italian courts apply a substance-over-form test: the formal attribution of the dirigente title is not decisive. Where an employee labelled a dirigente in fact performs functions that do not correspond to genuine top managerial responsibility, a court may reclassify the worker and apply the protections reserved for the appropriate category. Correct classification is therefore the first analytical step in any executive exit and a genuine area of litigation risk since a misclassified “dirigente” may in fact benefit from the dismissal regime applicable to ordinary employees.

Dismissal of the Executive: The Core Regime

The legal position of the dirigente on dismissal differs fundamentally from that of other employees, and rests on two layers.

The statutory layer: general Civil Code rules

As a matter of statute, the executive relationship is governed by Articles 2118 and 2119 of the Civil Code:

• under Article 2118, either party may terminate the relationship subject to notice (or to payment in lieu); and 
• under Article 2119, either party may terminate without notice for just cause (giusta causa), meaning a breach so serious that it does not permit even the temporary continuation of the employment relationship.

The specific statutory protections that apply to most other employees — Law No. 604/1966, Article 18 of the Workers’ Statute (Law No. 300/1970) and the “growing protections” regime of Legislative Decree No. 23/2015 — do not, as a rule, apply to executives in the same way. More specifically, Article 18 does not generally govern “ordinary” executive dismissals but its reinstatement and indemnity remedies may still apply to executives in the cases expressly provided by law, in particular where the dismissal is null, discriminatory or otherwise falls within the protected situations covered by Article 18 and related special statutes. 

For the avoidance of doubt, the remedies provided by the Legislative Decree No. 23/2015 (the ‘growing protections’ regime) do not apply to executives at any stage, including in cases of null or discriminatory dismissal; in such cases, the applicable statutory remedies for executives derive instead from Article 18 of the Workers’ Statute, as amended, and from the relevant special statutes.

In particular, Legislative Decree No. 23/2015, which governs operai, impiegati and quadri hired from 7 March 2015, expressly excludes dirigenti from its scope. The statutory categories of giustificato motivo soggettivo and giustificato motivo oggettivo that justify the dismissal of other employees are therefore not the direct statutory standard governing ordinary executive dismissals. But they remain relevant by analogy in the judicial assessment of giustificatezza. 

For ordinary, non-null dismissals of dirigenti, the dismissal-protection regime of Law No. 604/1966 — from whose scope executives are excluded by Article 10, which confines that law to employees holding the qualification of impiegato or operaio — together with the regime of Legislative Decree No. 23/2015 does not govern the lawfulness and the consequences of termination, which are instead largely defined by the Civil Code and collective bargaining. They remain, however, applicable to executives in cases of null or discriminatory dismissal, as noted below and in any other situations where the law expressly extends those statutory remedies to the dirigente category.

The collective-bargaining layer: giustificatezza and the supplementary indemnity

This statutory framework is significantly qualified by sector collective bargaining, which supplies the executive’s substantive protection. The principal executive CCNLs require that dismissal be communicated in writing and typically provide that an unjustified dismissal entitles the executive to a supplementary indemnity (indennità supplementare) in addition to notice.

The governing standard is giustificatezza, a concept shaped by collective bargaining and case law. It does not coincide with the contractual and case law standards of giusta causa or giustificato motivo applicable to other categories. In practice, giustificatezza operates as a more flexible benchmark, usually in the context of dismissal with notice or indemnity in lieu, focusing on whether the reasons given are objectively reasonable, consistent with good faith and adequate to justify the loss of trust in an executive role. 

In essence, a dismissal is “justified” where there exists a reason — objectively assessable and consistent with good faith and the freedom of enterprise — capable of affecting the bond of trust with the executive; the employer bears the burden of proving the genuineness and soundness of the stated reasons. An executive dismissed without such justification is generally entitled not to reinstatement but to the contractual supplementary indemnity, in the amount and within the brackets set by the applicable CCNL.

Where reinstatement still applies

The contractual indemnity regime governs the unjustified dismissal under collective bargaining; it does not displace the residual statutory protections against null or discriminatory dismissals. Where the dismissal of an executive is null or discriminatory, the strong mandatory remedies provided by statute – including Article 18 of the Workers’ Statute (Law No. 300/1970), and the related back-pay and contribution obligations – apply to executives as well, subject to the statutory conditions. 

The Applicable CCNL Is Decisive

Because the statutory floor for executives is relatively thin, the applicable CCNL defines the executive’s actual protection. The first task in any executive matter — whether assessing an offer, negotiating an exit or planning a measure — is to identify which national agreement governs the relationship.

The principal executive agreements include:

• The CCNL Dirigenti Industria: negotiated on the employer side within the Confindustria system, with Federmanager representing executives
• CCNL Dirigenti del Terziario, della Distribuzione e dei Servizi: commerce and services, with Manageritalia representing executives and 
• sector-specific agreements, such as those for banking/credit and insurance executives

These agreements differ, sometimes significantly, in respect of:

• notice periods, often calibrated to company seniority
• the brackets and method of calculation of the supplementary indemnity for unjustified dismissal, including automatic increases linked to the executive’s age (typically between age 50 and retirement eligibility)
• the requirement and form of written dismissal reasons and applicable disciplinary rules

The practical consequence is direct: two executives dismissed on the same day, in the same group may face entirely different notice entitlements and indemnity exposure depending on the CCNL applicable to each. Treating all executives as subject to identical rules is an error. The specific figures and formulas vary by agreement and by renewal cycle, and must be checked against the version of the CCNL in force at the relevant time.

Executives in Collective Redundancies (Law No. 223/1991)

Where workforce reductions reach a certain scale, the employer cannot proceed solely by individual dismissals but must follow the collective redundancy procedure under Law No. 223/1991. For most of that statute’s life, executives were excluded from its scope. They no longer are, and this is one of the most important developments affecting the executive’s position.

The inclusion of executives

Following the Court of Justice of the European Union’s judgment of 13 February 2014 in Case C-596/12 (Commission v Italy), which held Italy in breach of Directive 98/59/EC for excluding dirigenti from collective redundancy protection, the Italian legislator amended Article 24 of Law No. 223/1991 by Law No. 161/2014 (the “European Law 2013-bis“), inserting paragraph 1-quinquies and bringing executives within the regime. The Court of Cassation has confirmed that, once executives are included within the scope of Law No. 223/1991, the employer must also involve in the consultation the representative trade-union organisations for the category, identified according to the applicable collective agreements and the representative organisations operating in the relevant sector and workplace, which for executives often include associations such as Federmanager or Manageritalia.

Practical implications for executives

An executive affected by a qualifying reduction must be brought within the collective procedure, and the relevant executives’ union (typically Federmanager) must be involved in the information and consultation phase.

Where the procedural obligations or the selection criteria are breached in respect of an executive, the law provides the applicable monetary protection – a statutory indemnity – in case of procedural or selection-criteria defects, distinct from the CCNL supplementary indemnity regime applicable to individual dismissals. The amount and legal basis of this statutory indemnity are governed, in particular, by Article 5 of Law No. 223/1991, as amended, which for executives provides a monetary protection in lieu of reinstatement in cases of defective collective redundancy. 

In practice, where an executive is dismissed in the context of a collective redundancy, the specific monetary remedies provided by Law No. 223/1991 for breaches of the procedure or selection criteria come to the fore. The relationship between these statutory sanctions and the contractual supplementary indemnity under the applicable CCNL is an area of ongoing case law, with courts sometimes treating them as cumulative and, in other instances, reasoning in terms of absorption. The availability and quantum of the contractual indemnity therefore need to be assessed case by case in light of the prevailing jurisprudence. 

While, for executives, the statutory sanctions for defects in collective redundancy procedures are today primarily monetary, this does not exclude the application of general nullity or anti-discrimination rules, which may still lead to reinstatement in exceptional cases in which the collective dismissal is also null or discriminatory. 

For employers, the key point is that an executive cannot simply be excluded from a restructuring on the assumption that the collective procedure is irrelevant to managers. Failure to include the executive or to consult the relevant association creates clear and quantifiable legal exposure.

Industrial Relations: Executive Representation

Italian industrial relations operate through workplace representation bodies — principally the RSA (company union representations under Article 19 of the Workers’ Statute) and the elected RSU (the unitary body regulated by the inter-confederal Consolidated Text of 10 January 2014). These are among the employer’s counterparties in the information and consultation obligations that arise in restructurings. Bear in mind information and consultation obligations are not always attributed to RSA/RSU alone in all cases and instead the relevant actors depend on the applicable procedure and collective framework.       

For executives, representative functions are in practice exercised by dedicated associations– chiefly Federmanager in industry and Manageritalia in commerce and services– which are typically among the organisations consulted when executive positions are affected in collective redundancy. These are the relevant interlocutors wherever executive interests are engaged, including the consultation obligations within collective redundancy procedures. For the executive, membership of the relevant association is often the practical gateway to effective representation in a restructuring.

Social Safety Nets as They Apply to Executives

The Italian safety-net system distinguishes between income support during the suspension of an ongoing relationship and unemployment benefit following termination. The executive’s position is not uniform across these instruments, and several do not reach executives at all.

Wage supplementation (Cassa Integrazione Guadagni, CIGO/CIGS): governed by Legislative Decree No. 148/2015 (as amended, including by Law No. 234/2021). 

• Article 1 identifies the beneficiaries as subordinate employees, including apprentices and home-workers, but the ordinary CIG schemes are not applied to dirigenti under the general regime 
• Executives therefore do not, as a rule, access CIG, and cannot be placed on wage supplementation during a downturn in the way other employees can

NASpI (Nuova Assicurazione Sociale per l’Impiego): the ordinary unemployment benefit introduced by Legislative Decree No. 22/2015.

• It may be available to private-sector executives as subordinate workers who have involuntarily lost their employment, provided that all statutory contribution and employment requirements are met and none of the exclusion conditions apply, in line with current INPS rules and practice
• Eligibility in the individual case depends on meeting those requirements.
• In more complex situations for example, where the executive also holds corporate offices, or has had recent resignations/settlements from other roles, NASpI eligibility must be checked carefully against current INPS guidance
• Employment and corporate office must be analysed carefully against current INPS practice
• The form of termination (dismissal, resignation, consensual resolution in protected venues) has a direct impact on NASpI entitlement

Mobility allowance (indennità di mobilità): of historical relevance only

• It was abolished with effect from 1 January 2017 by the “Fornero” reform (Law No. 92/2012) and replaced by NASpI; it is therefore relevant only for the analysis of legacy situations predating that date and does not have a role in current restructuring planning, including for executives

As regards social safety nets, the general exclusion of executives from ordinary wage supplementation schemes (CIG) should be read without prejudice to any special or emergency measures occasionally enacted by the legislature, and recent INPS practice has confirmed that NASpI may also be granted to executives – including in certain consensual termination scenarios – where all statutory conditions are met and no exclusion ground applies.

The asymmetry matters in restructuring economics. Because executives are excluded from CIG, the employer cannot defer an executive’s exit through wage supplementation, and the executive’s post-termination protection rests essentially on NASpI plus any contractual or collectively bargained indemnity.

Strategic Considerations for Multinational Employers

For a group coordinating an Italian measure involving executives under a global policy, the following sequence reduces both cost and risk:

Conclusion

The key message for any group dealing with executives in Italy is that the dirigente is not simply a senior employee who can be dismissed “freely.” The executive stands largely outside the ordinary statutory dismissal-protection architecture, yet is protected by a robust collective-bargaining framework whose giustificatezza standard, supplementary indemnities and (since 2014) inclusion in collective redundancy procedures create real and quantifiable exposure. 

Effective planning is therefore front-loaded: confirm classification, identify the governing CCNL, document the business case, sequence any collective procedure correctly and engage the right counterparties. In cases in which the legal outcomes depend on the applicable agreement or the specific facts, those dependencies should be identified, evaluated and managed, not assumed away.

AL AdvaLux advises international companies, senior executives and in-house legal teams on these issues, from the classification, negotiation and exit of individual dirigenti to the inclusion of executives in collective restructurings in Italy, coordinated with global workforce strategy. We remain available to assist in assessing specific matters against the framework described above.