Ruling no. 118/2025 by the Italian Constitutional Court upheld the objections raised by the Court of Livorno and declared unconstitutional Article 9(1) of Legislative Decree no. 23/2015, insofar as it imposed a maximum cap of six months’ salary – calculated on the employee’s final salary used for severance pay purposes – as compensation for employees unfairly dismissed by employers with no more than 15 employees per production unit or fewer than 60 employees in total.
The Court indicated that introducing a rigid and absolute ceiling on compensation – regardless of the severity of the unlawful dismissal – results in a limitation on such compensation that is so restrictive that it prevents judges from applying, in determining compensation, the principles of individual assessment, adequacy and appropriateness.
In the Court’s view, such rigidity would also undermine the ability of the compensation to act as a deterrent against unlawful conduct by employers.
Due to the Constitutional Court’s ruling, the cap of six months of salary introduced by Legislative Decree no. 23/2015 is no longer applicable.
The compensation currently due in the event of unfair dismissal is now to be understood as falling within a new range of 3 to 18 months of salary, which corresponds to half the range of limits for businesses with more than 15 employees.
