Wage Guarantee Fund

Application of both the ordinary and extraordinary CIG is restricted to the employees of firms operating in certain sectors and of a certain size. The term refers to both temporary downturns in production (Cassa integrazione guadagni ordinaria, CIGO) and to the following categories: structural difficulties; corporate reorganisation; restructuring; conversion; bankruptcy; liquidation; and extraordinary administration (Cassa integrazione guadagni straordinaria, CIGS). CIGO can be used for blue and white collar workers (full-time and part-time) in the industrial sector, regardless of the number of employees (the crafts sector is excluded). It can also be used for the construction and building supply sectors, subject to seasonal working time reduction due to weather conditions. In these sectors, it can be applied to workers on fixed-term contract, but not to senior executives, temporary agency workers, home workers or apprentices.

The term CIGS can be used for blue and white collar workers (full-time and part-time), but not for senior executives, temporary agency workers, home workers or apprentices. It specifically applies to those who are employed at least 90 days in enterprises within the following types of enterprise: those in the industrial sector (including the construction and building supply sector) with more than 15 workers; those in the commercial sector with more than 200 employees, reduced to 50 employees with provisions renewed every year since 1993; publishing companies with any number of employees; enterprises in the craft sector with more than 15 employees and complying with law 223/91; enterprises in the restaurant and catering sector that use CIG and have more than 15 employees; service enterprises with more than 15 employees; and cooperatives with more than 15 employees.

Workers are entitled to an allowance of 80% of their last pay. Working time can be reduced to zero hours per week. Two types of cover exist. Under CIGO, a maximum of 13 consecutive weeks is provided, with a possible extension to 52 weeks (not necessarily consecutive) for exceptional circumstances. In the construction and building supply sectors, cover can be stretched to 52 weeks only in the event of reduction of the working time, but not if working time is reduced to zero hours worked per week (known as 'CIG zero hours'). Following CIG cover, a production unit can apply for a second treatment, only after production has resumed for at least 52 weeks. If the company benefits from the measure for non-consecutive periods, the maximum length of the treatment is of 52 weeks in two years.

CIGS can be provided to companies in the event of restructuring, reorganisation or change of activity. The measure can last for 24 months, with a possible extension of 12 months that can be granted twice, following two separate applications. In the event of a company crisis, the measure can last for 12 months that can only be extended once for a maximum of 12 months. In the event of bankruptcy, the measure can be used for 12 months and can be extended for a further six months. 

During periods of CIG, social security contributions are only paid for hours worked; this has no effect on employees’ social security contributions as the Italian system provides for figurative contributions. Moreover, while benefiting from CIG, workers do not benefit from any dismissal protection policy.

National government
Funding; approval of CIGS by the Ministry of Labour, Health and Social Policies.

Regional/local government
Employers have to request CIGO schemes to Inps' territorial agencies. The technical committee for the first assessment of CIGS is appointed by the regional administration.

Employers' or employees' organisations
When an enterprise plans to apply for CIGO it must first contact the trade unions to inform them of the reasons for the suspension and of the number of employees affected by the suspension; nonetheless the enterprise does not have to stipulate collective agreements with trade unions in order to apply for the CIGO. Before applying for CIGS, the enterprise must organise a phase of consultations that must lead to collective agreements with the trade unions.

Public employment services
CIGS: application must be sent to the provincial labour offices; CIG in derogation: the management of active labour policies linked to economic support is entrusted to public job centres.

Other
National Social Security Institute (Inps) pays allowances; employers add a quota to the state contribution, which changes depending on the firms' dimension

Employer

National funds

There was a decrease in payout over 2005-2007; this was followed by a considerable increase in 2008-2009 (mainly due to CIGO). In 2010, the recourse to CIG schemes increased by 31.7% compared to 2009 data. In particular, the recourse to CIGS and CIG in derogation rose significantly.

Strengths include: the provision of rapid relief to companies; preservation of workers’ income/jobs; the instrument is easy to use; the involvement of trade unions, national and regional government; and the fact it allows for greater flexibility than solidarity contracts. In addition, CIG in derogation aims to mix income support with active labour market policies.

The following weaknesses apply: limited coverage of sectors and company size classes; little involvement of PES/active and passive labour market policy; low effectiveness in supporting reemployment and fostering new economic initiatives; shorter duration than solidarity contracts. In addition, the instrument is often viewed as replacement tool for unemployment allowance, and involves a feeble integration of social shock absorbers and active labour market policies.

Electrolux, Motorola, Fiat, Indesit, Merloni.

www.inps.it; www.lavoro.gov.it/Lavoro/md/AreaLavoro/AmmortizzatoriSociali

Coletto, D. and Pedersini, R. National background paper Italy. Anticipating and managing restructuring in enterprises: 27 national seminars, ARENAS. Brussels, European Commission, 2009; Voss, E., Wild, A., Pulignano, V., Kwiatkiewicz, V., Farvaque, A. Organising Transitions in Response to Restructuring. DG Employment, Social Affairs and Equal Opportunities, Brussels, 2010; Mandl, I., Storrie, D., Hurley, J., Mascherini, M., Broughton, A., Owczarzak, R., Riso, S., Salvatore, L. Extending flexicurity – The potential of short-time working schemes: ERM Report 2010. Eurofound. 2010; www.lavoro.gov.it/Lavoro/md/AreaLavoro/AmmortizzatoriSociali.