European Union: CJEU: No Automatic Conversion of Abusive Fixed-Term Contracts, but Remedies Must be Effective
Source: Fondazione Teatro alla Scala di Milano (Case C 668/24), 29 January 2026
1) The facts
The dispute arose in Italy in the performing arts sector. The claimant was a ballerina who had worked for years for the famous La Scala in Milan under successive contracts.
She argued that the arrangements presented as self-employment were unlawful and that the relationship was in substance employment. On that basis, she asked the court to confirm the employment status and to order that she be taken back into employment (reinstated), claiming that the repeated use of fixed-term arrangements amounted to abuse.
The referring court (Tribunale di Milano) put the case to the Court of Justice of the EU (CJEU) because of a key national-law feature: since 2023, the Italian Supreme Court (Corte di Cassazione, Joint Chambers/Sezioni Unite) has taken the position that in this sector conversion to an open-ended contract is not possible. It stated that where sector-specific mandatory rules prohibit open-ended hiring or require prior public selection procedures, a fixed-term clause found unlawful does not lead to conversion into an indefinite contract; instead, the worker retains a right to damages/compensation.
That national “no conversion, but compensation” approach triggered the EU-law question: is that compatible with Directive 1999/70 and the Framework Agreement on fixed-term work, which requires Member States to prevent and sanction abuse of successive fixed-term contracts?
2) CJEU’s answer: conversion is not automatically required, but the alternative remedies must be effective
The CJEU’s message is nuanced and very practical:
The Court did not say conversion is the only effective remedy
The referring court explicitly drew a parallel with earlier EU case law (notably Sciotto, C 331/17). In Sciotto, the Court held (in simplified terms) that EU law prevents a system where automatic conversion is excluded in the operatic/orchestral foundations sector when there is no other effective measure in domestic law to penalise abuses.
But the CJEU stressed that the 2026 case is not about imposing a single mandatory sanction across the board; rather, it is about whether the sector-specific alternatives are effective and dissuasive in practice.
What “alternative measures” did Italy point to?
The Court discussed a national regime (as interpreted by the highest national court) with two separate measures to sanction abuse in this sector:
- Compensation for harm, where (without excluding the possibility of claiming more for greater harm) a minimum amount may be awarded and proof can be facilitated through presumptions; and
- Potential personal liability of directors/managers if there is gross negligence or intentional breach of the national rules on fixed-term contracts.
Is a capped/lump-sum style compensation “problematic” under EU law?
The CJEU did not rule that a minimum/standardised compensation is per se unlawful. Instead, it framed a conditional test: Clause 5 does not preclude such a regime provided that these measures make it possible to penalise the established abuse effectively—and it is for the national court to verify that in the real world.
This is the critical nuance for employers and HR: the label (“lump sum”, “minimum compensation”, “manager liability”) matters less than whether the package is actually dissuasive enough to change behaviour and prevent repeat misuse.
What if the national court finds the alternatives are not effective?
Then the CJEU adds a strong instruction: if the referring court concludes that abuse cannot be effectively penalised through those measures, it must interpret national law as far as possible in conformity with Clause 5, to ensure the full effectiveness of the Directive and reach a result consistent with its purpose. In this case, the national court could impose the reconversion into an open-ended contract.
Text of the case.
