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Covid-19 – Italy Legislative Update – January 2021 

Law no. 178 of 30 December 2020. State budget for the financial year 2021 and multi-annual budget for the three-year period 2021-2023. 

The 2021 Budget Law (Law no. 178/2020), which came into force on 1 January 2021, has extended the current ban on dismissals until 31 March 20212

The ban on dismissals for objective reasons, affecting all employers and regardless of  
their number of employees, and is not connected to the company having made full  
use of the COVID-19 shock absorbers, as initially provided for by the “August Law  
Decree”.  The new rule establishes that until 31 March 2021 employers may not: 

Law No. 604/1966

The following cases do not fall under dismissals for justified objective reasons and as such are to be excluded from the ban on dismissals: 

2 The ban was previously provided for in Article 12, paragraphs 9 and 10 of Law Decree no. 137/2020, known as the Ristori Decree, converted, with amendments, by Law no. 176 of 18 December 2020, which would have ended its effectiveness next 31 January 2021. 

Mutual terminations of employment relationships are allowed, and the legislator has  
not placed limits on employee resignations, including those for constructive dismissal.  The additional circumstances in which the legislator has provided for the possibility of terminating the employment relationship are: 

Any violation of the ban on dismissal entails the nullity of the dismissal itself, with the consequences of the law. 

Do you have questions regarding termination scenarios in Italy?  Direct your query to our specialist IRIS HR Consulting team here.