Italy ends ban on laying off employees during Covid-19 crisis

Italy's government on Wednesday approved a deal between trade unions and employers, ending the country's ban on layoffs while keeping some protections for certain workers hit by the coronavirus pandemic.

Italy ends ban on laying off employees during Covid-19 crisis
A demonstration in Turin against business closues due to Covid-19 restrictions held in May 2021.Photo: Marco Bertorello/AFP

The freeze on firings introduced in February 2020 as Covid-19 hit Italy will be selectively lifted from Thursday, a government spokesman said following a cabinet meeting.

READ ALSO: ‘A million more unemployed’: Fears as Italy’s Covid freeze on layoffs set to end

The Bank of Italy estimates that Italy’s ban on lay-offs, unique among European nations, helped save 440,000 jobs last year amid the pandemic

Trade unions had warned that ending the layoff freeze as scheduled could lead to “a million more unemployed” in the country. 

But after tough negotiations, Italian unions this week secured a commitment from employers to use measures such as reducing workers’ hours before laying them off.

A state-funded scheme of part-time working for struggling firms was also extended for 13 weeks, and in return, companies that benefit must not to fire workers during this period.

As announced earlier this week, the freeze on lay-offs will remain until October in sectors hardest hit by the pandemic, such as textile, fashion and footwear.

For large companies notably in construction and manufacturing, the freeze will end as planned on Wednesday.

The eurozone’s third largest economy was plunged into a deep recession last year by the pandemic.


The European Commission this month denounced the Italian ban on layoffs as “counterproductive” as it protects employees on long-term contracts but not those in more precarious jobs – notably women and young people who have so far felt the brunt of the economic problems in Italy.

It asserted that in France and Germany, which instead offered financial support for people whose hours were cut by struggling companies, the effects of the pandemic on employment have been less severe than in Italy.

Despite the ban, there were 550,000 layoffs in Italy in 2020, as those related to disciplinary issues or the closure of companies were exempt.

There are also hundreds of thousands of workers in more precarious jobs whose contracts were not renewed.

In total, almost a million jobs were lost last year in Italy.

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EXPLAINED: How to claim Italy’s €200 cost of living bonus

The Italian government is sending one-off €200 payments to cushion the rising cost of living, but they won't be automatic. Here's the latest on how the process works.

EXPLAINED: How to claim Italy's €200 cost of living bonus

The €200 cost of living bonus was announced in May 2022, alongside several government measures aimed at offsetting the increasing cost of living, as The Local reported.

Employees, as well as the self-employed, pensioners and the unemployed, will be eligible to receive the €200 payment if they have an annual income of under €35,000 gross, according to a decree law passed in May.

READ ALSO: Who can claim Italy’s €200 cost of living bonus?

However, the bonus is only automatically made to those who are state employees or pensioners. Those in these categories will be identified by the Ministry of Economy and Finance and INPS and receive €200 along with their salaries or pension payments.

What if I work in the private sector?

Employers working in the private sector should receive their payments in their July pay packet. First, however, they need to submit a self-declaration (autodichiarazione) form to their employer, who will pay the sum with the July pay check and then recover the funds from the state later.

The decree doesn’t specify a deadline for the submission, but as the payments should be made in July, the paperwork needs to be filed before that – so you’ll need to talk to your employer and arrange it.

READ ALSO: EXPLAINED: The rules and deadlines for filing Italian taxes in 2022

The self-declaration serves to establish that the worker has all the requirements to be a beneficiary. That means the person does not go over the income ceiling for the benefit, for example.

You will also have to declare that you will not receive a €200 bonus from other sources, such as from being a recipient of the citizen income or through another employment relationship.

How can other workers apply?

Italy’s government expanded the bonus payment scheme to more people in early May, as The Local reported.

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ were added to the categories of people in Italy eligible for a one-off €200 payment.

These other categories of workers will not receive automatic payment, though. Instead, they need to make a special request to INPS to receive the bonus.

There are different deadlines for different people, so ‘domestic workers’ (lavoratori domestici) need to apply by September 30th. Other workers, such as seasonal, for example, have until October 21st.

You can apply for the bonus on the INPS website, which indicates that the payments will be made at an unspecified later date.