LAS vs Italian dismissal rules: what a Swedish employer should expect

A US company hiring in Italy has to unlearn at-will employment. A Swedish company does not. Under the Employment Protection Act (LAS) you already need objective grounds to dismiss, and you already work with notice periods that grow with service. Italy is built on the same principle: employment is stable, and the employer has to justify ending it.

That is the good news. The detail still differs, and the detail is where cases are lost. This article is an orientation, not legal advice on a specific exit.

The Swedish baseline  

Under LAS, termination must be in writing and rest on objective grounds: shortage of work or reasons relating to the employee. In redundancies, selection normally follows seniority, and an employer may exempt up to three employees whose skills are especially important. Employer notice is at least one month, rising to two months after two years and up to six months after ten years; the employee gives at least one month ( Øresunddirekt ).

Norwegian readers will recognise the same structure: dismissal must be objectively justified, notice is one month under five years of service and grows after that ( Altinn ). Danish readers start from a more flexible position, with the Salaried Employees Act notice of one to six months ( Business in Denmark ); they will find Italy the biggest change.

The Italian grounds  

Italian law recognises three broad grounds for dismissal by the employer:

• Just cause. Conduct so serious that the relationship cannot continue even for the notice period. Close to the Swedish summary dismissal for serious breach.
• Justified subjective reason. A significant breach of duties that is less serious than just cause. Notice applies.
• Justified objective reason. Reasons linked to the organisation, such as a role that no longer exists. The employer may need to show that the person could not be placed in another position.

Some situations have their own rules, such as absence for illness beyond the protected period set by the CCNL.

Certain dismissals are not just costly but void: those linked to discrimination, to pregnancy or parental leave, or to the employee exercising a legal right. Swedish managers will find this intuitive.

Procedure weighs more than in Sweden  

In Sweden, a dismissal with weak grounds is the main risk. In Italy, a dismissal with good grounds and the wrong procedure is a risk of its own.

• Disciplinary dismissals need a written charge, a period for the employee to respond, and only then a decision. Skipping a step can sink the case.
• The letter must be in writing and state the reason where the law requires it. Vague or late letters are a frequent cause of lost disputes.
• Consequences of an unjustified dismissal are compensation and, in some cases, reinstatement.

There is no Italian equivalent of the Swedish seniority order (turordning) as you know it from LAS. Collective redundancies have their own procedure and selection criteria, which an EOR or a lawyer should run.

Notice comes from the CCNL  

LAS sets notice by statute. In Italy, notice usually comes from the national collective agreement (CCNL) that applies to the role, by level and seniority. It can be a few weeks for junior roles and several months for senior ones. If the employer wants the person to stop working at once, it can usually pay in lieu of notice. If the employee leaves without serving notice, the employer can generally claim an indemnity.

Resignation is formal too  

An Italian employee resigns through an official online procedure, not by email. This protects both sides: the company has a clear record that the decision was the employee’s own.

Agreed exits  

As in Sweden, many exits end in a settlement. In Italy the agreement often needs to be signed in a protected setting, such as before a labour office or union representative, to be final. A private document alone may not stop a later claim.

What the employee receives at the end  

Here Italy adds lines that do not exist under LAS:

• unused holiday and hours off;
• the accrued share of the 13th month and any 14th;
• the TFR, the end-of-service accrual of 6.91% of pay a year, unless it has been paid monthly into a pension fund;
• notice pay where it applies.

The TFR is the item Nordic finance teams most often miss. In our EOR set-up it goes monthly into the fund the employee chooses, so no liability builds up.

Practical habits  

1. Use the probation period actively. It is the one window where either side can leave freely.
2. Keep written records of performance discussions and warnings, as you would before a Swedish personal-reasons dismissal.
3. Never announce a dismissal verbally first.
4. Speak to the employer of record or counsel before you start, not after.
5. Plan the final payslip and the return of equipment and access together.

For the full comparison table, see Italy vs Sweden . For how notice and accruals affect cost, try the cost calculator .