Thanks to Juri Stani Pascarella for collaborating on this article
With the entry into force of Law No. 76 of 15 May 2025 (“Law 76/2025”), Italy has introduced a comprehensive legal framework for employees participation in corporate governance, profit-sharing, capital ownership, and organizational processes. Enacted in implementation of Article 46 of the Italian Constitution (which had remained unapplied for over 75 years), the law aims to strengthen cooperation between employers and employees, to maintain and increase employment levels, and to enhance the economic and social value of work.
To this end, the legislation recognizes four distinct forms of participation:
a. managerial;
b. economic and financial;
c. organizational;
d. consultative.
Each of these areas is governed by specific provisions designed to ensure flexibility and compatibility with the company’s corporate structure. A central role is assigned to collective bargaining agreements at national, structural and company level, for regulating participation in all its dimensions.
a. Managerial participation: “the plurality of forms of employees participation in strategic decisions within the company”
The law identifies different possibilities based on the various types of governance.
In particular, in companies adopting a dualistic governance system, characterized by the separation of functions between a management board (“Consiglio di gestione”) and a supervisory board (“Consiglio di sorveglianza”), the company’s by-laws may provide, where regulated by the collective bargaining agreements, for the presence of one or more employee representatives on the supervisory board.
On the other hand, companies that do not opt for a dualistic system may include in their corporate by-laws, where provided for by collective agreements, provisions allowing for the appointment of employee representatives between the members of the board of directors or between the members of the management control committee (if such a body is established).
This regulatory approach seeks to balance corporate efficiency with participatory governance, fostering employee engagement in strategic and supervisory functions, while respecting the specific characteristics of each governance model.
b. Economic and financial participation: “the participation of employees in the profits and results of the company, including through forms of participation in capital, such as share ownership”
This type of participation may take the form of the distribution of a share of company profits or the implementation of employee share ownership plans.
When such forms of participation are adopted, Law 76/2025 introduces certain favorable tax provisions aimed at encouraging the direct involvement of employees in company performance, thereby promoting loyalty, a sense of belonging, and generating positive effects on productivity and competitiveness. Such tax benefits are of temporary nature.
Specifically, for the 2025 tax year only, and by way of derogation from the rules established under Article 1, par. 182 Law No. 208/2015 regarding the tax regime applicable to performance bonuses, a special incentive is introduced: in cases where at least 10% of total company profits are distributed to employees, in accordance with national collective agreements or collective agreements at company level, the threshold of income eligible for substitute taxation at the rate of 10% (reduced to 5% for the 2025–2027 period) is increased from €3,000 to €5,000 gross.
In addition, for 2025, dividends distributed to employees as part of equity-based compensation schemes, particularly when company shares are granted in place of performance bonuses pursuant to Law 208/2015, are exempt from personal income tax (IRPEF) on 50% of their amount, for an amount not exceeding €1,500 per year.
c. Organizational participation: “the whole range of ways in which employees are involved in decisions concerning the various stages of production and organization of company’s life”
Companies may foster organizational participation by establishing joint committees composed of an equal number of representatives from management and from the workforce. These committees are tasked with developing proposals for the improvement and innovation of products, production processes, services, and work organization.
This participatory model encourages collaboration between employees and employers in shaping operational and strategic aspects of the company, thereby promoting a more inclusive and dynamic corporate culture.
In addition, through collective agreements, companies may reflect this participatory approach within their organizational structures by introducing in their organization chart dedicated roles or functions, such as:
- Training representatives;
- Welfare and employee benefit coordinators;
- Remuneration and incentive policy officers;
- Workplace quality and work–life balance officers;
- Parenting and family support advisors;
- Diversity and inclusion managers, including roles specifically focused on the inclusion of people with disabilities.
Furthermore, companies with less than 35 employees may encourage, also through bilateral bodies, forms of worker participation in the organization of the companies themselves.
d. Consultative participation: “participation through the expression of opinions and proposals on the merits of decisions that the company intends to take”
This type of participation is carried out within joint committees, where work councils (RSA/RSU) or, in their absence, employees’ representatives and local branches of sectoral bilateral bodies, may be consulted in advance on specific company decisions.
This procedure for the consultation is governed by a dedicated procedural framework, which defines specific timelines and modalities, while fully respecting the consultation mechanisms already established by law or by collective bargaining agreements.
The responsibility for defining the composition of such joint committees, along with the venues, timing, methods, and substantive scope of the consultation process, is delegated to the collective agreements of reference.
This mechanism aims to strengthen social dialogue at company level, enhancing transparency and promoting shared decision-making in matters of strategic relevance.
Additional provisions: training and National Commission at CNEL
The law establishes mandatory training requirements for employee representatives who participate in joint committees or other corporate bodies involved in participatory processes. Specifically, representatives must receive at least 10 hours of training per year, which may also be delivered jointly.
This training is intended to strengthen their technical, specialist, and cross-cutting competencies, enabling them to effectively contribute to corporate governance, consultation, and organizational innovation.
The training hours required may be financed through various channels, including:
- Bilateral bodies;
- Interprofessional training funds;
- The new skills fund (“Fondo Nuove Competenze”)
The law also provides for the establishment of a Permanent National Commission for Employees Participation within the framework of the National Council for Economics and Labor (CNEL), composed of government representatives and experts.
The Commission’s main responsibilities include:
- Monitoring the implementation of the law on employees participation;
- Issuing interpretative opinions and technical guidance, upon request, to support the correct application of the provisions;
- Proposing future amendments or corrective measures, based on observed outcomes and evolving needs.
This body will act as a permanent observatory and advisory authority, ensuring coordinated oversight and continuous development of participatory practices in the workplace.
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The provisions of law 76/2025 apply to all types of companies including, insofar as compatible, the cooperatives. At present, the adoption of any form of employees participation remains entirely at the discretion of the companies.
