Court Of Cassation: The Limits Of Unilateral Termination Of The Applicable Collective Agreement

The Court of Cassation, Labor Section, with order No. 20601 of 18 June 2026 stated that the right to unilaterally terminate a collective agreement in force prior to its expiry lies exclusively with the signatory trade unions and employers’ organizations, therefore, it is unlawful if exercised unilaterally by an individual employer.

Indeed, according to the Court’s reasoning, an individual employer is not entitled to opt out of the collective agreement by giving notice of withdrawal, even if accompanied by a period of notice, with the consequent workers’ right to pay differentials arising from the unlawful replacement of the applicable collective agreement.

This is because the survival clause contained in a collective agreement – which provides for the agreement to remain in force until the next renewal is concluded – incorporates a final expiry date linked to a future event that is certain as to “whether” it will occur but uncertain as to “when”, with the result that the collective agreement remains binding until renewal and cannot be terminated early before its expiry.