Italy adopts new law on employee participation in companies

At a glance

• On 14 May 2025, the Italian government approved a new law promoting employee participation in corporate governance.
• The law identifies four types of participation: Managerial; economic and financial; organisational; and consultative.
• Employees may be appointed to governance bodies, share in profits or capital, and be involved in production processes.

On 14 May 2025, the Italian Senate passed a new law establishing a legal framework for employee participation in the management of companies, in line with Article 46 Italian Constitution, which provides for employee participation in the management of companies. The legislation provides for four main forms of participation:

• Managerial participation: Employee representatives may join corporate governance bodies, such as boards of directors or supervisory boards.
• Economic and financial participation: Workers may share in company profits or results, including through equity participation (eg employee share ownership).
• Organisational participation: Employees may contribute to decisions relating to production methods and organisational structures.
• Consultative participation: Trade union representatives may be consulted on business decisions.

The reform promotes a more collaborative corporate culture, where employees are actively involved in strategic and operational aspects of company life.

A distinctive aspect of the new law is the role entrusted to collective bargaining in operationalising its provisions. The effectiveness of most participation mechanisms will depend on their implementation through specific clauses in collective agreements - whether concluded at national, sectoral or company level - thus positioning trade unions and employers' associations as key stakeholders in the law’s practical application.