Termination and Notice in the UAE vs Dismissal Rules in Italy

In the UAE, either party can end an employment contract with written notice of 30 to 90 days, and compensation for arbitrary dismissal is capped at three months’ wage. In Italy, the employer’s freedom to terminate ends with probation. After that, dismissal needs a reason recognised by law, set out in writing, and a court can award between 3 and 36 months’ pay, sometimes with reinstatement. This is the single biggest legal gap UAE companies face when they hire in Italy. Full comparison on Italy vs the UAE .

The UAE: notice-based termination  

Under Federal Decree-Law No. 33 of 2021, a contract ends by mutual written agreement, by expiry without renewal, by notice from either party, or on listed events such as death, permanent incapacity, closure or insolvency (Article 42). The government portal summarises the rules:

• Notice (Article 43): written, at least 30 days and no more than 90 days, the same for both parties unless more favourable to the worker. The contract continues during notice and the worker is paid in full. A party that does not give notice owes pay in lieu.
• Job search: when the employer terminates, the worker can take one unpaid day a week during notice to look for work.
• Summary dismissal (Article 44): the employer can dismiss without notice, after a written investigation, for listed misconduct: forged documents, serious loss, safety breaches, repeated failure after two warnings, disclosing confidential information, intoxication at work, assault, unexcused absence beyond the limits, abuse of position, or joining another employer improperly.
• Arbitrary dismissal (Article 47): dismissal because the worker filed a valid complaint with MoHRE or a proven lawsuit is unlawful. Compensation is set by the court but cannot exceed three months’ wage, plus gratuity, notice and other dues.
• Probation: the employer can end employment with 14 days’ written notice.

The result is a system where termination is mostly a cost question: notice, gratuity and, at most, three months’ compensation.

Italy: dismissal needs a reason  

Italian law (Law 604/1966, art. 2118–2119 civil code, Legislative Decree 23/2015) allows dismissal only for:

• Giusta causa (just cause): conduct so serious that the relationship cannot continue even for the notice period. No notice is due.
• Giustificato motivo soggettivo: a significant breach of the employee’s duties, less serious than just cause. Notice is due.
• Giustificato motivo oggettivo: economic or organisational reasons, such as eliminating the position. The employer must show the reason is real and that no other suitable role was available.

Any disciplinary dismissal must follow article 7 of the Workers’ Statute: a written charge, at least five days for the employee’s defence, then a written decision. The reasons must be stated in the dismissal letter.

Notice (preavviso) is set by the CCNL by level and seniority, from a couple of weeks for junior staff to several months for managers. Pay in lieu is possible.

What an unjustified dismissal costs  

For employees hired from 7 March 2015 (the Jobs Act regime):

• In companies with more than 15 employees in the unit or 60 in Italy, an unjustified dismissal leads to compensation of 6 to 36 months’ reference pay. Reinstatement applies to discriminatory, void or oral dismissals and some disciplinary cases.
• In companies with 15 or fewer employees, compensation is 3 to 18 months’ pay, following the Constitutional Court’s ruling 118/2025.

On top of that, every dismissal of an open-ended employee triggers the NASpI ticket, a contribution paid to INPS: about €649.73 per year of service in 2026, up to about €1,949. It is tripled in collective dismissals without a union agreement.

Collective dismissal (Law 223/1991) applies to employers with more than 15 employees dismissing at least five people within 120 days, and requires a consultation procedure with unions.

Side by side  

Resignation and mutual agreement  

UAE employees resign with contractual notice. Italian employees must resign online through the Ministry of Labour procedure, otherwise the resignation is not valid. Mutual termination (risoluzione consensuale) follows the same online route or is signed before a protected forum (sede protetta), such as a union or labour office conciliation. Settlements signed in a protected forum are final, so most negotiated exits in Italy end there.

Practical consequences for a UAE company  

• Use probation. It is the only period in which you can end employment without a reason. Set clear objectives in the first weeks.
• Document performance. Poor performance can justify dismissal only if it is serious, documented and follows warnings.
• Budget for exits. A negotiated exit often costs several months’ pay to avoid litigation.
• Avoid serial fixed-term contracts. Non-renewal is not a UAE-style exit route after 24 months (see UAE fixed-term contracts vs the Italian contract ).

What this means if you hire through an EOR  

The EOR is the legal employer, so it runs the Italian procedure: disciplinary letters, the article 7 timeline, dismissal letters with reasons, NASpI ticket and final pay including TFR. Commercial terms for ending the assignment are in your EOR contract, but the employee’s rights under Italian law do not change because an EOR is involved. Plan around the Italian employment contract , compare on Italy vs your country , model exit costs in the cost calculator or contact us .

Related guides for UAE companies  

• End-of-service gratuity vs Italian TFR
• Non-competes and data protection: UAE vs Italy
• Tax-free salary vs IRPEF and INPS

General information, not legal advice.