From the early 1990s, the Italian industrial relations system came to be described as an example of the ‘neo-corporatist revival’. ‘Negotiated flexibility’, implemented with the participation of the social partners, resulted in an increasingly polarised labour market, with a surge in precarious jobs concentrated mostly among the younger generations, and no lasting effects on employment. Since the crisis, labour legislation has turned from negotiated to unilateral. In the name of urgency, national governments have increasingly resorted to legislation by decree, sidestepping the social partners and national parliament to pass reforms in the fields of labour, welfare and industrial relations. The interaction of these reforms with austerity policies has eroded labour rights while weakening the labour unions, magnified the dualism marking the labour market and opened the way to greater precariousness, inequality and poverty. The case of Italy demonstrates that no degree of labour flexibility can amount to adequate response to the crisis, and that the multiple challenges raised by technological, organisational and social changes call for coordinated responses in the production, employment and social spheres.