In Italy, the wages guarantee fund (CIG) aims to maintain employment when a company faces a crisis. In 2009, there was a 311% increase in recourse to the CIG compared with 2008. According to the government and the social partners, the Italian ‘social shock absorber’ system has considerably reduced the number of dismissals. However, the trade unions have recently expressed concern about the future prospects of workers whose CIG periods will terminate in the next few months.
About the wages guarantee fund
In Italy, the wages guarantee fund (Cassa Integrazione Guadagni, CIG), in its various forms, is the most important ‘social shock absorber’, intended to cushion the harmful effects of dismissals or layoffs on workers. It is used where work is partially or temporarily reduced or suspended. The CIG ensures continuity of income and employment of temporarily laid-off workers. It can be applied through two schemes:
- the ‘ordinary’ wages guarantee fund (CIGO), which may be used in cases of temporary downturns in production for transitory reasons;
- the ‘extraordinary’ wages guarantee fund (CIGS), which may be applied in serious situations of a surplus workforce and to intervene in the case of corporate restructuring, reorganisation or conversion, as well as in the event of bankruptcy, liquidation or extraordinary administration.
The two schemes have different requirements and procedures. Generally, they can be used only by companies in specific sectors that fulfil certain requirements, such as company size (see the Italian contribution to the study Tackling the recession: Employment-related public initiatives in the EU Member States and Norway from the European Monitoring Centre on Change (EMCC)).
Impact of slowdown on access to CIG
The recent economic slowdown has led the Italian government to introduce temporary rules that extend access to the CIG schemes to companies and workers normally excluded. Access to both CIG schemes has been made easier and more flexible; the period of access to the CIGO has been prolonged, and the use of the CIGS has been extended to companies and workers previously excluded from it through the introduction of the CIG ‘in derogation’ (IT0812029I).
Given the importance of the CIG in the Italian social shock absorber system and its particular features, it may also be considered as a useful indicator with which to evaluate the effects of the economic crisis on the Italian production system.
Increase in recourse to CIG in 2009
According to the data furnished by the National Social Security Institute (INPS), in 2009 a 311% increase in recourse to the CIG was recorded compared with 2008 (918,146,133 hours were authorised). In 2009, authorised hours of the CIGO grew by 410% compared with the previous year, while the increase in the CIGS (which also included the CIG ‘in derogation’) was 209%, with more marked growth in the second part of the year. The mechanical engineering, metalworking, transport and telecommunications sectors were those where greatest use was made of the CIGO, while recourse to the CIGS and the CIG ‘in derogation’ was greater in the mechanical engineering, textiles, clothing/furnishings, wood, construction and commerce sectors. In geographical terms, those regions with the largest numbers of companies have made the greatest use of the CIG (Emilia-Romagna, Lombardy, Piedmont and Veneto in northern Italy and Marche to the east of the country). It is estimated that in 2009 around 350,000 workers were involved in CIG procedures.
In the first four months of 2010, authorised CIG hours increased compared with 2009 (+103%); there were 415.7 million authorised CIG hours in the January–April 2010 period, while in the same period in 2009 there had been 204.8 million authorised hours. In particular, the first part of 2010 saw a marked rise in use of the CIGS (which also includes the CIG ‘in derogation’).
Reactions of social partners
The government has emphasised the importance of the Italian social shock absorber system, particularly the CIG schemes, in considerably reducing the number of possible dismissals (IT1003019I).
The main trade union confederations – the General Confederation of Italian Workers (Cgil), the Italian Confederation of Workers’ Trade Unions (Cisl) and the Union of Italian Workers (Uil) – have also recognised the role of CIG schemes in tackling the negative effects of the economic crisis on employment. In recent months, however, they have expressed growing concern about the future prospects of workers whose CIG periods will terminate in the next few months. In fact, if the large recourse to the CIGO scheme that characterised the previous year seemed to suggest that companies were in a ‘wait-and-see’ situation, the recent increase in recourse to the CIGS could indicate a growing tendency towards substantial restructuring processes with the aim of curbing companies’ costs, including labour costs.
Diego Coletto, University of Milan