# India's Four Labour Codes vs Italy's Civil Code and CCNL: Where the Rules Come From

> India now runs on four Labour Codes plus state Shops Acts. Italy runs on the civil code, statutes and a sector CCNL. What that means for your first hire.

When an Indian company hires its first person in Italy, the first surprise is not a number. It is where the rules live. In India you look at a central code, then a state act, then your own appointment letter and HR policy. In Italy you look at the civil code, a handful of statutes and, above all, the national collective agreement for the sector, the CCNL. This guide maps one system onto the other. For the full side-by-side, see [Italy vs India](/italy-vs-india.html).

## India: four Labour Codes, now in force

India consolidated 29 central labour laws into four codes:

- the **Code on Wages, 2019**
- the **Industrial Relations Code, 2020**
- the **Code on Social Security, 2020**
- the **Occupational Safety, Health and Working Conditions Code, 2020**

The Ministry of Labour and Employment brought the four codes into force with effect from **21 November 2025**, notified in the Gazette of India. Final central rules under the four codes were notified on 8 May 2026 (for example the [Code on Wages (Central) Rules, 2026](https://www.labour.gov.in/static/uploads/2026/05/6eb0c35ba63b776487a025e5123b6b12.pdf)); they apply where the Centre is the appropriate government, and each state frames its own rules for most private employers. <!-- review: check whether the relevant state's final rules are notified -->

For an Indian HR team, the codes changed several familiar anchors: a uniform definition of "wages" (with allowances above half of total remuneration added back to wages), gratuity for fixed-term employees after one year, a higher threshold for prior government permission on retrenchment, and appointment letters made mandatory.

## India: the state layer still matters

Labour is a concurrent subject. On top of the central codes, each state has its own **Shops and Establishments Act** (or equivalent), which is where most rules for an office-based IT or SaaS employee actually come from: opening hours, weekly holidays, leave, festival holidays and registration. A Bengaluru office and a Pune office follow different state rules. Many tech employees are also outside "workman" protections because they are managers or supervisors, so in practice the appointment letter and HR policy do a lot of the work.

## Italy: civil code, statutes, CCNL, contract

Italy has no "labour code" in the Indian sense. The hierarchy looks like this:

1. **The Constitution** (for example art. 36 on fair pay and art. 39 on unions).
2. **The civil code** (Codice civile, Book V), which defines the employee (art. 2094), duties of diligence and loyalty (arts. 2104–2105), job level and changes of duties (art. 2103), non-compete (art. 2125) and severance pay, TFR (art. 2120).
3. **Statutes**, such as the Workers' Statute (Law 300/1970), the dismissal laws (Law 604/1966 and Legislative Decree 23/2015), the working time decree (Legislative Decree 66/2003) and the parenthood code (Legislative Decree 151/2001).
4. **The CCNL** for the sector: commerce, metalworking, telecoms and so on. It sets job levels, minimum pay per level, 13th (and sometimes 14th) month, notice periods, probation length, sick pay top-ups and extra leave.
5. **Company or regional agreements**, where they exist.
6. **The individual contract**, which can improve on the CCNL but not go below it.

Italy has no statutory national minimum wage. In practice, the CCNL tables play that role: courts use them as the benchmark for "fair pay" under art. 36 of the Constitution.

## The structural differences

| Topic | India | Italy |
|---|---|---|
| Main source | Four central Labour Codes + state Shops Acts | Civil code + statutes + sector CCNL |
| Who sets pay floors | Central floor wage and state minimum wages by schedule | CCNL minimum per job level |
| Variation by location | Big: state rules differ | Small: national CCNL, same rules in Milan and Bari |
| Role of collective agreements | Limited in tech and services | Central, applies in practice to almost every job |
| Manager carve-outs | Managers often outside "worker" definition | Executives (dirigenti) have their own CCNL; quadri and employees are fully covered |
| Employer policies | HR policy carries much of the detail | Policy cannot go below the law or CCNL |

## Why the CCNL changes the conversation

Indian founders are used to designing the offer: CTC, components, leave policy, notice period. In Italy, much of that is decided before you start. Once the employee is placed in a CCNL and a level, you know the minimum monthly pay, the number of monthly salaries (13 or 14), the notice periods by seniority, the probation cap and the sick pay rules. You negotiate above the floor, not around it.

That also means you cannot run one "global HR policy" in Italy without checking it against the CCNL. A 60-day notice clause, unpaid probation extensions or a "use it or lose it" leave rule may simply be invalid.

## Protections that apply to everyone

Under the Indian codes, many protections depend on whether someone is a "worker" (formerly "workman") or a manager. In Italy, the core protections of the civil code and the Workers' Statute cover every employee, including senior engineers and team leads. Only executives (dirigenti) have a partly different regime, mainly on dismissal. More on this in [appointment letters vs Italian contract levels](/articles/appointment-letter-workman-vs-italian-ccnl-levels.html).

## Where Indian intuition still helps

Some concepts translate well:

- **Written terms.** The codes now require appointment letters; Italy requires written information on the main terms of employment (Legislative Decree 152/1997, as amended in 2022).
- **Social security on top of salary.** EPF and ESI have their Italian counterpart in INPS and INAIL, but the rates are much higher. See [EPF/ESI vs INPS/INAIL](/articles/epf-esi-vs-inps-inail-ctc-vs-ral-italy.html).
- **Gratuity.** Italy has TFR, a deferred payment due on every exit. See [gratuity vs TFR](/articles/gratuity-vs-tfr-italy-india.html).

## Which CCNL applies?

Choosing the CCNL is the employer's decision, but it must fit the company's actual activity. For an EOR, the choice depends on its own registered activity and the type of role. Commerce and services, metalworking and telecoms agreements are common for office and technical roles. The CCNL must be stated in the contract and filed with the hire notice.

## What this means if you hire through an EOR

An Employer of Record becomes the legal employer in Italy. It picks the CCNL that fits the role, places the employee at the right level, issues a compliant contract, registers the hire and runs payroll, INPS, INAIL and tax. Your Indian entity keeps managing the work and pays a monthly service invoice. You do not need an Italian company, a local HR team or a state-by-state style compliance tracker.

What you still own: a clear job description (it drives the CCNL level), a realistic salary above the CCNL minimum, and decisions that have legal weight in Italy, such as performance issues or ending the contract. Use the [cost calculator](/calculator.html) to see the employer cost, read how [Italian employment contracts](/italy-employment-contracts.html) are structured, or [contact us](/contact.html) to scope your first hire.

## Related guides for Indian companies

- [Appointment letters, workman status and Italian CCNL levels](/articles/appointment-letter-workman-vs-italian-ccnl-levels.html)
- [Termination: retrenchment vs Italian justified dismissal](/articles/termination-retrenchment-vs-italian-dismissal-jobs-act.html)
- [Leave, working hours and overtime](/articles/leave-working-hours-india-vs-italy.html)
- [Notice buyouts, bonds, non-compete and data protection](/articles/notice-buyout-bonds-non-compete-dpdp-vs-italy.html)

*General information, not legal advice.*

{{< compare-table compact="true" >}}


---
Source: https://hiringitaly.com/articles/india-labour-codes-vs-italian-civil-code-ccnl.html · 2026-11-09