European Employment Insights – Dicember 2025

European Andersen professionals from more than 20 different jurisdictions have published the latest Employment Insights Newsletter with the main updates in the field of Employment and Labour Law.

Tax developments in Cyprus, updates for 2026

Magdalena Patryas, Partner at Andersen Poland, interviewed Nick Tsilimidos, Partner at Andersen Greece, to provide an overview of the tax and legal developments that will affect employers and employees in Cyprus in 2026.

Among the new measures is the recognition of employees’ right to perform multiple additional jobs simultaneously: employers may not prohibit employees from working for another employer outside their working hours and may not adopt discriminatory behaviour or measures because of this choice.

Another major development concerns the extension of maternity leave from 18 to 22 weeks for the first child, including for surrogate mothers, with the possibility of extending the leave by up to an additional 8 weeks in cases of premature birth or specific medical needs. The legislation has also amended adoption leave, increasing it from 16 to 20 weeks in the case of adoption of a minor child.

From 2026, employers are required to upload electronically to the social security services the information relating to the essential terms and conditions of employment: private sector employees must be able to access information on the workplace, job duties and classification, the start date of employment and any end date in fixed-term contracts, as well as the main details regarding remuneration and working hours.

Significant tax incentives have been introduced for highly paid employees seconded to Cyprus but resident abroad. Upon the employee’s request, these incentives apply to income tax, provided that the remuneration derives from work performed in Cyprus and that the employee was tax resident in another country before the start of employment. The regime provides for a 50% exemption of gross annual remuneration for a period of ten years starting from the first year of employment, provided that the beneficiary’s annual income exceeds EUR 100,000.

Nick Tsilimidos acknowledges that, overall, the Cypriot regulatory framework is more protective of employees than employers. In light of the new role assigned to the Department of Labour Relations in the out-of-court resolution of disputes, employees may file a free online complaint against their employer, which will be examined by a government labour inspector who will request clarifications from the parties involved.

The most debated “Work XXI” measures in the Labour Reform in Portugal

José Morta Soares, commenting on the draft reform of the Labour Code, “Work XXI”, underlines that its aim is to make the economy more competitive and companies more productive, based on a merit-based system to enhance workers and promote employment.

To date, trade unions remain sceptical, considering the reform as a reduction of employee protections and job stability. On the other hand, the Portuguese Government has highlighted the non-negotiable measures regarding the “hours bank”, dismissals, breastfeeding leave and fixed-term contracts.

The draft bill reintroduces the possibility of accumulating overtime hours through an agreement between the company and the employee. Working time may increase by up to two hours per day, with a maximum of 50 hours per week and 150 additional hours per year. As for dismissals, an important novelty for employers is the possibility to ask the judge, in the event of an appeal against unfair dismissal, to avoid the reinstatement of the unlawfully dismissed employee. The Government also proposes several changes to the use of fixed-term contracts by extending their maximum duration: up to three years for fixed-term contracts and up to five years for open-ended contracts, and by broadening their use also for the start-up of new activities and for hiring workers with no previous open-ended contracts or who have been long-term unemployed.

The reform also addresses breastfeeding leave, the use of which would be limited to the first two years of the child’s life, with the requirement for the employee to submit, every six months after the child’s first year, a medical certificate confirming the continuation of breastfeeding.

You can find the full contribution on page 6 of the newsletter

Italian legislation and new developments in Labour Law

Uberto Percivalle, Partner at Andersen Italy and Head of the Employment and Labour Service Line, presented the main updates in employment law and the case law of the highest courts. In this contribution, Uberto Percivalle focuses in particular on the renewal of the most widespread collective bargaining agreements in Italy and on immigration legislation.

Simplification of immigration procedures

On 3 December 2025, Law No. 182 was published in the Official Gazette to simplify and digitalise immigration procedures, with the aim of speeding up processes for workers in the tourism and yachting sectors. In particular, this law seeks to facilitate immigration-related procedures and to accelerate the remote issuance of sickness certificates, thereby reducing bureaucracy for citizens and companies.

Renewal of the National Collective Bargaining Agreement for Executives in Commerce – CNEL Ho21

On 5 November 2025, Confcommercio and Manageritalia renewed the national collective agreement for executives in the tertiary and services sectors, with an addendum signed on 12 November. The agreement provides for progressive salary increases until 2028, a minimum corporate welfare package, increased contributions for supplementary pensions and accident insurance, and benefits for newly appointed executives or those approaching retirement. The agreement will remain in force until 31 December 2028.

Renewal of the National Collective Bargaining Agreement for Metalworkers (Industry) – CNEL Co11

The metalworkers’ agreement was also updated in 2025. The agreement, signed by Federmeccanica, Assistal and the main trade unions in the sector, provides for increases in minimum pay until mid-2028 and the strengthening of corporate welfare. Three additional days of parental leave have been introduced in the event of children’s illness, while the rules on fixed-term contracts now require that at least 20% of previous fixed-term contracts be converted into open-ended contracts. Temporary workers with contracts of at least 48 months will be eligible for stabilisation from 2026. The agreement also introduces consultative committees in larger companies, new occupational safety protections and specific rules on subcontracting, requiring subcontractors to apply the most representative collective bargaining agreement. The agreement will remain in force until 30 June 2028.

Prohibition on amending collective bargaining agreements

With Judgment No. 29737 of 11 November 2025, the Italian Supreme Court clarified that companies may not amend a collective bargaining agreement before its expiry without the consent of all signatory trade unions. The Court held that agreeing amendments only with some unions or relying on generic communications to employees is insufficient and constitutes anti-union conduct.

Taxi reimbursements

Finally, with Ruling No. 302 of 4 December 2025, the Italian Revenue Agency confirmed that reimbursements for taxi journeys paid in cash are subject to withholding tax. In line with Law No. 207 of 2024, the Agency confirmed that expenses for food, accommodation, travel and transport do not constitute taxable income only if they are paid using traceable payment instruments.