Job security agreement

Job security agreements may be used by shop-floor and office workers, as well as by members of cooperatives. The law allows for both a defensive and an offensive job security agreement. A defensive job security agreement provides for a reduction of working hours on a daily, weekly or monthly basis, in order to prevent job cuts. It may be applied simultaneously to the CIGS, but may not involve workers placed on the Wage Guarantee Fund schemes. An offensive job security agreement is used in relation to a permanent reduction of working hours, in order to facilitate the hiring of new personnel. In this case, the state pays to the employer a contribution for each new employee hired. Job security agreements can also be availed of by firms that are outside the scope of the CIGS. In these cases, the allowance granted to the employee is equal to 25% of the wage lost and an equivalent contribution is paid to the company.

Company-level agreements are based on the principle of solidarity. In the case of a defensive agreement, employees of a production unit within a company reduce their working hours, by an equal amount, in order to avoid dismissals.

In the case of a defensive agreement, companies are enabled to recruit new employees.

The reduction of working hours (daily, weekly or monthly) may be applied parallel to CIGS (but not for the same workers). The agreement provides for a reduction of working hours, by a maximum of 60%, with a corresponding reduction in pay. In such cases, Inps pays a wage supplement equal to 60% of the wage reduction. During periods of job security agreement, social security contributions are only paid for worked hours; this has no effect on employees’ social security contributions as the Italian system provides for figurative contributions. The protection can last for a maximum of 24 months, and can then be extended for 24 further months (36 months for Southern Italy). Once the maximum extension has been reached, a new job security agreeement for the same units can only be agreed after production has resumed for at least 12 months following the end of the last agreement.

National government
Funding is provided by the National Social Security Institute (Instituto nazionale di previdenza sociale, Inps)

Employers' or employees' organisations
Reduction of working hours for each worker has to be reached by an agreement between company and trade unions.

National funds

Since the recession began, the use of job-security agreeements has increased significantly.

The job security agreement is of longer duration than the Wage Guarantee Fund. In addition, employers who decide to use job security agreements can benefit from a reduction in the amount of social security contributions payable for workers affected by the scheme. If the working time is reduced by more than 20%, employers’ contributions are reduced by 25%. If the working time is reduced by more than 30%, employers’ contributions are reduced by 35%. Law 236/1993 extended eligibility for the job security agreement to firms that are not covered by the CIG schemes. It also simplified some procedures.

Some procedures are still complex. It is not very flexible. Feeble integration has occurred between income support provided by job security agreements and active labour market policies.

Cooperativa Ceramica di Imola; Embraco; Alfa Acciai.

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 Report VC/2008/0667, Brussels, European Commission, 2009; Glassner. Government and trade union responses to the economic crisis in the financial sector. ETUI working paper 2009; Extending flexicurity – The potential of short-time working schemes: ERM Report 2010; www.inps.it; www.lavoro.gov.it/Lavoro/md/AreaLavoro/AmmortizzatoriSociali.