Background for Italy

The 2022 update note to the economic and financial document (Nota di Aggiornamento al Documento di Economia e Finanza) (Ministry of Economy and Finance, 2022), approved by the Council of Ministers on 28 September 2022, is limited to an analysis of current trends and forecasts for the Italian economy and public finance under current legislation. After six quarters of higher-than-expected growth, which in the second quarter of 2022 brought gross domestic product (GDP) above the average for 2019 (the year before the COVID-19 pandemic), the economic outlook in September 2022 appeared less favourable. The global economy and the European economy are in a marked slowdown. Signs of a possible reversal of the expansionary business cycle are attributable to rising energy prices, the sudden rise in interest rates in response to rising inflation and the geopolitical situation. In 2022, the surge in prices increased the cost of energy imports in Italy to an unprecedented extent, pushing the trade balance into deficit after almost 10 years of uninterrupted surpluses. At the same time, the rise in inflation contributed to an increase in tax revenues that was much higher than estimated; the extra revenue generated was used by the government to mitigate the impact of energy price increases on households and businesses. The measures adopted by the Government in 2022 supported the country’s economy. By the end of 2022, GDP per capita had increased by 3.7%, from 7% in 2021, according to the International Monetary Fund. As a result of the positive revenue performance and public expenditure moderation, the government deficit as a share of GDP decreased from 9% in 2021 to 7.9% in 2022.

The sources of Italian labour law can be divided into two groups: legislative sources (European, national and regional) and national collective bargaining agreements (NCBAs). Case law and instructions from the National Labour Inspectorate may have a significant impact on the management of labour relations.

Relationships between employers and employees are mainly regulated by laws, the NCBAs and decentralised collective bargaining agreements (DCBAs), leaving specific matters to be settled by individual labour contracts.

The most significant legal sources dealing with labour and industrial relations are as follows:

• the Italian Constitution (Articles 1, 3, 4, 35–41, 45, 46 and 99)

• the Workers’ Statute (Act No. 300/1970), the six titles of which deal with the following topics: the freedom and dignity of workers, trade union freedom, trade union activities, miscellaneous and general provisions, placement rules, final and criminal provisions

• framework agreements on the collective bargaining agreements and industrial relations systems of 1993, 2009, 2011, 2013, 2014 and 2018 (protocols and consolidated texts)

• rules on individual dismissals (Article 18 of the Workers’ Statute, Act Nos. 604/1966, 92/2012, 23/2015)

• rules on collective dismissals (Act Nos. 223/1991, 92/2012, 23/2015)

• the Jobs Act (a labour law reform implemented through the enactment of several legislative measures between 2014 and 2016: Act Nos. 22/2015, 23/2015, 80/2015, 81/2015, 148/2015, 149/2015, 150/2015, 151/2015, 185/2016), which regulates individual and collective dismissals, flexible working arrangements, social safety nets, etc.

• working time regulations (Act No. 66/2003)

• the Consolidated Text on Health and Safety at Work (Act No. 81/2008)

• Act No. 104/2022, implementing Directive (EU) 2019/1152 and introducing new obligations for employers regarding information to be provided to employees in employment contracts

• Act Nos. 215/2003 and 216/2003, introducing measures to prevent discrimination based on sex, race, ethnic origin and discrimination in employment and working conditions

The industrial relations and collective bargaining system in Italy is not regulated by the legislature. Regulations regarding trade unions and employer representation and representativeness are almost non-existent in Italy. The inter-union system (ordinamento intersindacale) makes it possible to look at the effect of the application of industrial relations regulations on the dynamics of the Italian industrial relations system. Regulations of the inter-union system are set out in interconfederal agreements, framework agreements, protocols, regulations, and so on. These can be signed bilaterally, by confederations of workers and confederations of employers, or trilaterally, if the government participates. Mention should be made here of the Consolidated Text on Trade Union Representation (TU 2014), resulting from an agreement of 10 January 2014 between the General Confederation of Italian Industry (Confederazione Generale dell’Industria Italiana, Confindustria) and the Italian General Confederation of Work (Confederazione Generale Italiana del Lavoro, CGIL), the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacati Lavoratori, CISL) and the Union of Italian Workers (Unione Italiana del Lavoro, UIL).

The Italian industrial relations and collective bargaining system is traditionally regulated by NCBAs. This system is based on power balances between the main trade unions (CGIL, CISL and UIL) – that is, confederal unions representing workers in all the economic sectors in Italy and leading cross-industry collective bargaining processes. At the time of the creation, development and national establishment of the three trade unions, they were aligned with the three dominant political forces and ideological traditions in Italy (that is, Marxist/socialist, Christian and republican traditions). Over time, and owing to the crisis of mass parties and strong political ideology, the three confederal trade unions have enabled different ideologies to coexist within them, although their original identities partly remain.

The need to formalise the industrial relations rules in Italy has emerged for two reasons: on the one hand, because of the emergence of autonomous trade unions and militant groups that have undermined the hegemonic position of the three confederations, and, on the other, the fading of major ideological conflicts between the confederations. The Italian industrial relations system has started to produce its own regulations, which are set out in interconfederal agreements, framework agreements, protocols, and so on.

The Italian industrial relations framework has undergone numerous changes in recent years, with a view to increasing the importance of decentralised bargaining and achieving a closer link between wages and productivity.

In 2018, Confindustria, the major employer confederation, and CGIL, CISL and UIL reached a cross-industry agreement on the bargaining system (Factory Pact (Patto della Fabbrica) of 9 March 2018). The agreement is meant to accompany the transformation and digitalisation of manufacturing and services, with an emphasis on effectiveness and participation. The agreement introduces a set of guidelines on the content and institutions of industrial relations and on some issues of mutual interest on which future deals should be negotiated. In particular, it covers the certification of representativeness and highlights the need to extend the agreement to employer organisations. The agreement also confirms the two-tier structure of the bargaining system, with NCBAs as the main pillar and DCBAs as instruments to support specific company-level practices and needs, and identifies a number of issues that will be covered by future negotiations, such as contractual welfare; training and skills development; health and safety as a priority area for the development of participatory industrial relations; active labour market policies to ensure a more inclusive and dynamic labour market; and participatory practices, especially innovative work organisational patterns, which should be promoted by DCBAs. One implementing agreement, on health and safety issues, was reached in December 2018.

It is worth mentioning the novelty of the unique alphanumeric code that the National Council for Economics and Labour (Consiglio Nazionale dell’Economia e del Lavoro, CNEL) assigns to each NCBA. Article 16-quater of Decree Law No. 76/2020, converted, with amendments, into Law No. 120/2020, provided that the data related to the NCBA applied to the employee must be indicated by the employer in their compulsory communications to the Ministry of Labour and Social Policies and in the monthly reports to the National Institute for Social Security (INPS), by means of the unique alphanumeric code assigned by CNEL when the contract is added to the CNEL archives. INPS Circular No. 170 of 12 November 2021 provided information on the passage of data through the Uniemens flow, facilitated by the unique alphanumeric code attributed by CNEL. Starting with the employers’ declaration of February 2022, the data are transmitted exclusively through the CNEL code. An exception is made for the collective agreements for the agriculture and domestic work sectors, for which the communication of employers with INPS also takes place through other information flows and for which the Uniemens source information is therefore partial. This makes it possible to obtain very precise data on the application of NCBAs for tax purposes.

The COVID-19 pandemic made collective bargaining more difficult, especially because of its economic impact and the uncertainty around recovery. However, negotiations for the renewal of sectoral agreements continued, and agreements were reached. In some cases, wage increases were scheduled over the duration of the agreements, to take into account the expected recovery period.

Since March 2020, discussions between the Ministry of Labour and Social Policies, the Ministry of Health, the Ministry of Economic Development, the National Institute for Insurance against Accidents at Work (INAIL) and social partners have resulted in a shared protocol on measures to combat and contain the spread of COVID-19 in the workplace, which has been repeatedly amended and implemented. The protocol and its subsequent updates, developing the principles set out in Act No. 81/2008 (the Consolidated Text on Health and Safety at Work), provide the reference framework for the establishment of company-level health and safety protocols.

Compulsory vaccination against COVID-19 for workers was introduced. In 2021, access to company premises became conditional on the possession of a ‘green pass’ – that is, a certificate of vaccination or recovery from COVID-19. At the beginning of 2022, all public and private workers aged 50 and over required the reinforced ‘green pass’ – that is, proving the holder’s completion of the vaccination cycle – in order to access their workplace. The same general obligation, without the 50-year age limit, also concerned certain categories of workers considered ‘at risk’ of COVID-19 infection, namely workers in the public and private healthcare sector (doctors, nurses and other staff); workers of the Residenze Sanitarie Assistenziali (sociomedical residential facilities for non-self-sufficient older people and people with disabilities); school workers (in private and public schools of all levels, universities and training institutions); and workers in the defence, security and public rescue sector. A financial penalty was imposed for workers who did not comply with the vaccination requirements. Moreover, non-compliant workers were considered to be unjustly absent, but without disciplinary consequences, with the right to keep their jobs until they presented a ‘green pass’. Employers were not required to pay employees for days of unjustified absence. Until 15 June 2022, employers could, after five days of unjustified absence due to non-compliance with compulsory vaccination, suspend workers from service for the duration of the employment contract concluded for their replacement, for a period not exceeding 10 working days and renewable until 15 June 2022. On 15 June 2022, the requirement to be vaccinated to enter the workplace was abolished for almost all of the above categories of workers, with the exception of healthcare workers and workers employed in the Residenze Sanitarie Assistenziali, for whom the requirement expired on 1 November 2022.

The COVID-19 pandemic accelerated the take-up of remote work in Italy. The use of this work arrangement increased during the pandemic, and it seems to be an emerging model that will characterise the future of work in Italy. On 7 December 2021, at the Ministry of Labour and Social Policies, an agreement was reached with the social partners on the first national protocol on agile working in the private sector. The protocol sets out the definition of remote working and the guidelines for national-, company- and territorial-level collective bargaining, in compliance with the regulations set out in Act No. 81/2017 and existing collective agreements. Collective bargaining is conducted to determine what measures must be implemented in specific sectors.