Unfair Dismissal in Australia vs Dismissal Rules in Italy: Reasons, Process and Remedies

An Australian manager knows the basic rule: after the minimum employment period, a dismissal must not be harsh, unjust or unreasonable. Italy’s rule sounds similar but is stricter in practice: after probation, every dismissal needs a legally recognised reason, stated in writing, that the employer can prove in court. Full comparison on Italy vs Australia .

Australia: unfair dismissal under the Fair Work Act  

According to the Fair Work Ombudsman, an employee can apply to the Fair Work Commission for unfair dismissal if they:

• have worked for the employer for at least 6 months, or 12 months for a small business employer (fewer than 15 employees, counting associated entities and regular casuals);
• are covered by the national system; and
• are covered by an award or enterprise agreement or earn less than the high income threshold .

The application must be lodged within 21 days of the dismissal. The Commission considers whether there was a valid reason related to capacity or conduct, whether the employee was told the reason and given a chance to respond, and whether underperformance was preceded by warnings. A small business that follows the Small Business Fair Dismissal Code is treated as having dismissed fairly. A genuine redundancy is not an unfair dismissal. Remedies are reinstatement or compensation .

Outside unfair dismissal, general protections and unlawful termination claims are open to all employees regardless of service or salary.

Italy: justified reason from the end of probation  

Italian law (Law 604/1966) allows dismissal only for:

• Giusta causa (just cause, art. 2119 civil code): conduct so serious that the relationship cannot continue even for the notice period. Dismissal is immediate, without notice. Close to Australian serious misconduct.
• Giustificato motivo soggettivo: a significant breach of duties by the employee, not serious enough for summary dismissal. Notice applies.
• Giustificato motivo oggettivo: economic, organisational or production reasons, such as the elimination of the role. Close to an Australian genuine redundancy, but the employer must also show that the employee could not be redeployed to another available role.

There is no minimum employment period beyond the agreed probation, no salary threshold and no small business exemption from the requirement of a reason. Executives (dirigenti) follow a separate regime under their CCNL.

The disciplinary procedure  

Any dismissal for conduct must follow art. 7 of the Workers’ Statute: written charges, at least five days for the employee to respond (in writing or at a hearing with a union representative), then a written decision. The disciplinary code must be posted where employees can see it. Skipping the procedure makes the dismissal unjustified even when the facts are true. It is a formal version of the Australian “chance to respond” factor.

Remedies under the Jobs Act  

For employees hired from 7 March 2015, D.Lgs 23/2015 sets compensation for unjustified dismissal:

• Employers with more than 15 employees (in the unit or municipality, or more than 60 nationally): 6 to 36 months’ pay, set by the judge.
• Employers with 15 or fewer: 3 to 18 months’ pay, after the Constitutional Court’s ruling 118/2025.
• Reinstatement for discriminatory or oral dismissals and some cases where the alleged fact did not exist.

The employer can also offer a tax-free conciliation payment (one month per year of service, within limits) to settle quickly.

Side by side  

Notice and pay in lieu  

Australia’s NES notice ranges from one week to four weeks, plus a week for employees over 45 with at least two years of service, and can be paid in lieu. In Italy, notice comes from the CCNL by level and seniority and is usually longer: often one to four months for white-collar staff. Pay in lieu is allowed. Details in notice and redundancy pay vs TFR .

Performance management  

In Australia, a documented performance process with warnings usually supports a valid reason. In Italy, poor performance is a difficult ground: courts require a marked and attributable shortfall against reasonable objectives, documented over time and handled through the disciplinary procedure. Plan with that in mind and use probation to assess fit.

Common questions from Australian companies  

Can we let someone go in the first six months? Only during the agreed probation period. After it ends, you need a reason from day one.

What is the cost of a no-fault exit? Many Italian exits are negotiated: a consensual termination signed in a protected venue, with an agreed payment, often a few months’ salary. The employer also pays the NASpI dismissal “ticket” (about €649.73 per year of service in 2026, up to about €1,949).

Does the Small Business Fair Dismissal Code have an equivalent? No checklist offers a safe harbour. Small employers face lower compensation, not looser rules.

What this means if you hire through an EOR  

The EOR is the legal employer, so it runs the disciplinary procedure, writes the dismissal letter and handles conciliation. You still need to give it the facts and documents. Read about the Italian employment contract , see other countries , estimate the cost with the calculator or contact us .

Related guides for Australian companies  

• Modern awards and the NES vs the Italian CCNL
• Notice and redundancy pay vs TFR and collective dismissal
• Non-compete reform in Australia vs art. 2125 in Italy

General information, not legal advice.