The Italian Constitutional Court (the “Court”) has partially repealed the “Jobs Act” reform of 2015 that introduced, among other things, a predictable calculation criteria for the monetary compensation to be paid in case of unlawful dismissal (2 months’ salary for each year of service, with a minimum threshold and a maximum cap).

The full decision of the Court has not yet been issued, but based on the text of a press release relating to the matter, the position of the Court is clear: indemnity for unlawful dismissal based exclusively on length of service goes against the constitutional principles of reasonability, equality, and job protection.

Once the full decision is issued, Italian law will still provide for a minimum and a maximum monetary compensation in case of unlawful dismissal, but there will no longer be a “formula” to determine these thresholds in advance. Within the minimum and maximum values, the relevant tribunal will have discretion to decide the compensation to be paid to the employee who was unlawfully dismissed.

There is a possibility that following this decision the Parliament will reintroduce a predictable calculation for compensation for unlawful dismissal, which could take into account, for example, the size of the employer or the age of the employee.  However, even though common in other Italian statutes, it is not likely that factors such as physical health or economic status will be elements that the relevant tribunal could consider in determining compensation.

Stay connected to our blog for more information on this hot topic. We will post the full version of the decision of the Court on the topic of compensation for unlawful dismissal as soon as it is available.

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