Dismissals: the Corte costituzionale grants broader discretion to judges and greater scope for reinstatement (I Focus del Sole 24 Ore, 26 febbraio 2026 – Vittorio De Luca e Alessandra Zilla)

The regulation of dismissals continues to represent one of the central pillars of Italian labour law, an area of constant tension between freedom of economic initiative and the protection of job stability.

For over forty years, the cornerstone of the system was Article 18 of the Workers’ Statute, unchanged from its 1970 version, which provided for reinstatement as the ordinary remedy in medium and large-sized companies.

This framework was profoundly affected by the 2012 Fornero reform and, subsequently, by Legislative Decree No. 23/2015 (the so-called Jobs Act), which introduced the “increasing protection” regime for employees hired as of 7 March 2015, marking a clear distinction between “old” and “new” hires.

The declared aim of the legislature was to make the system more predictable, reducing the scope of reinstatement in favour of a system primarily based on financial compensation. However, over the years, the intervention of the Corte costituzionale has had a profound impact on this framework, significantly reshaping it compared to its original design.

The Fornero reform and the progressive expansion of reinstatement following the Constitutional Court’s intervention

With specific reference to Article 18, as amended in 2012, case law has played a decisive role in clarifying key concepts, including that of the “manifest non-existence of the fact.”

In its judgment No. 59/2021, the Corte costituzionale removed the merely optional nature of reinstatement in cases where the factual basis of an economic dismissal is found to be non-existent, holding it unreasonable to leave such a discretionary choice to the judge in the presence of such a serious substantive defect.

Continue reading the full version published on I focus del Sole 24 Ore