LABOUR | The Constitutional Court on limits on compensation for unlawful dismissals for companies with up to 15 employees

On 25 July 2025, the Italian Constitutional Court issued its judgment in case No. 118, declaring Article 9.1 of Legislative Decree no. 23/2015 (the so-called JobsAct) unconstitutional. The above-mentioned article provided for a maximum compensation for unlawful dismissals in small companies, with up to 15 employees, consisting in an amount of six months’ salary. The Court held that such rigid and insurmountable limit prevented judges from ensuring compensation that is personalised, adequate, and proportionate to the seriousness of the dismissal and set the maximum amount at half of that provided for the larger companies, thereby establishing an upper limit of 18 months. It was ruled that the fixed ceiling failed to provide the necessary deterrent effect against unlawful conduct by employers. The ruling underlines the need for judicial discretion in assessing damages to effectively protect workers .

Newsletter n. 110 – August/September 2025