ESG Enforcement Tracker

Key facts:

Italian prosecutors are seeking to place luxury shoemaker Tod’s S.p.A. under judicial administration over alleged labour abuses in its Italian supply chain and are seeking precautionary action in the form of an advertising ban. Tod’s is the sixth high-end Italian brand to face court supervision since early 2024, following similar measures against Loro Piana, Valentino, Dior, Armani, and Alviero Martini.

The case, revealed through a decision of the Italian Supreme Court, arises from prosecutors in Milan alleging that Tod’s “culpably failed” to adequately oversee its subcontractors to pursue higher profits.

Tod’s previously told Reuters that it had been informed of the hearing but had no further details. The company reiterated that it complies with current legislation, including labour law, and carries out regular checks on the workshops it uses. It also stated that workshops are required to sign agreements guaranteeing compliance with labour contracts and acceptable working conditions before commencing work.

The investigation centres on subcontractors operating in both Milan and the Marche region. In Milan, from 2023 to 2024, Tod’s assigned production of sales-assistant uniforms to a company with no production capacity, which subcontracted the work to another firm. That firm in turn subcontracted to two Chinese-owned factories, which were placed under investigation after inspections revealed worker exploitation. In the Marche region, from January 2024 to January 2025, Tod’s directly contracted two Chinese-owned workshops (one of which subcontracted again) for the production of shoe uppers and other footwear components.

Inspectors found workers were paid on a piecework basis, resulting in net hourly wages between €2.75 and just over €3.00, less than half of the €10.00 stipulated by the national collective agreement. Deductions of €150 for accommodation and €100 for food were also recorded.

The case highlights growing government and industry attention to worker exploitation in Italy’s luxury fashion sector. Italian Industry Minister Adolfo Urso said the government has proposed a certification scheme allowing fashion companies to obtain pre-emptive third-party verification that their supply chains comply with labour law, aiming to safeguard the “Made in Italy” reputation.

The Supreme Court (Cassazione) held on 19 November that the Marche prosecutors have jurisdiction over the judicial administration application. The status of any proceedings being pursued by Marche prosecutors remains unknown.  

The following day, on 20 November 2025, the Milanese prosecutors commenced an investigation into Tod’s and three of its executives. The prosecutors applied to the magistrates’ court for a six-month advertising ban on 20 November 2025 on the grounds that Tod’s demonstrated ‘wilful blindness’ to labour exploitation in its supply chain by ignoring 3^rd party audit findings over several years.

Under Legislative Decree No. 231/2001, which governs the administrative liability of legal entities in Italy, the court may impose precautionary measures, such as advertising bans, in certain cases where predicate offences, including labour exploitation, are alleged.

On 3 December 2025, the Milanese Magistrates’ Court granted additional time for Tod’s to implement measures aimed at preventing further labour exploitation by subcontractors. In a public statement, the company welcomed the decision, noting it provides “the necessary time to complete the additional control-strengthening measures that the company initiated long ago”. It reported that steps were being taken to control risks in its supply chain, through procedures, training and safeguards reviewed by external consultants. The application is now due to be heard on 23 February 2026.