Collective bargaining in Italy

Collective agreements do not have an erga omnes effect in Italy: they are not legally binding for all workers in the sector. They are binding only on employers belonging to the organisations that have signed them, or that choose to adopt and apply them. Otherwise, the application of collective agreements is voluntary for the employer, who chooses which agreement to apply.

NCBAs are concluded for the whole Italian territory and ARE applied to all employees of the same sector (at a centralised level). At this level, the main aspects of employment relations are established, such as minimum wage, working time, job classification and working conditions.

Certain specific aspects of work, such as incentive remuneration schemes, performance bonuses, productivity standards and special types of indemnities, are regulated in DCBAs. Legislation in recent years introduced incentives to encourage the spread of both workplace performance-related schemes and company welfare schemes to increase the number of beneficiaries among workers, and to extend productivity bonuses.

NCBAs can be cross-sectoral, sectoral or related to specific occupations within one or more sectors, depending on the level of negotiations conducted by social partners.

DCBAs mostly take place at company/workplace level, in the private manufacturing and service sectors as well as in the public administration sector. However, in some sectors decentralised agreements are concluded at territorial level. For example, in the construction sector DCBAs are concluded at provincial level, and the same applies to agriculture and tourism; in the artisanal sector, DCBAs are negotiated at regional level.

Collective wage bargaining coverage of employees

Notes: * Percentage indicates the coverage of NCBAs signed by CGIL, CISL and UIL. ** Percentage of employees working in local units where more than 50% of the employees are covered by a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (Nomenclature of Economic Activities codes B–S), with multiple responses possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (Nomenclature of Economic Activities codes B–S, excluding O), with a single response for each local unit); CNEL (2022); OECD and AIAS (2021).

Bargaining levels

The most important level of collective bargaining for wage-setting in Italy is the sectoral level. Italian NCBAs for each economic sector contain provisions dedicated to minimum wages. These include tables structured based on minimum wage thresholds related to the tasks of workers at each level. The maximum length of the working day, depending on the sector and the type of activity carried out, is also defined in NCBAs.

However, the regulation of some aspects of the remuneration structure and working time management, such as incentive plans, fringe benefits, remote work and overtime remuneration is delegated to decentralised-level agreements.

Levels of collective bargaining, 2022

Notes: The Italian interconfederal level (livello interconfederale) does not address individual employment relationships but defines the rules governing collective bargaining and covers some general issues, such as apprenticeships. It provides the rules for the coordination of the sectoral bargaining level with the decentralised bargaining levels, and it establishes the general reference criteria for wage bargaining, including for the protection of the purchasing power of wages.

Articulation

According to the TU 2014, DCBAs should concern only the issues delegated to them by NCBAs or by law. Basic rights and minimum wage levels are established at national/sectoral level, while DCBAs aim to adapt the general conditions to specific contexts, in accordance with the mandatory provisions set out at national/sectoral level or by law.

NCBAs are generally renewed every three years. DCBAs have variable durations, but renewals tend to follow the timing of NCBAs, avoiding the overlap of negotiations. However, agreements concerning productivity standards and productivity bonuses tend to be renewed every year, at least to revise the variable objectives.

On the basis of the TU 2014, in order to avoid the excessive prolongation of bargaining rounds, social partners agreed that the proposals for renewal must be submitted six months before the expiry of an NCBA.

In the event of a delay in renewing the NCBA, its clauses are ultra-active – that is, they remain valid until the next renewal. This situation is not uncommon in Italy, especially as regards NCBAs related to more fragmented economic sectors.

Horizontal and vertical coordination mechanisms are in place in the Italian bargaining system: NCBAs regulate wages in line with the provisions of the 2009 interconfederal framework agreement on the reform of collective bargaining arrangements. The agreement provides a reference framework for sectoral renewals to consider inflation projections, with the aim of ensuring the preservation of the purchasing power (horizontal coordination). Moreover, the agreement envisages the introduction of opening clauses in sectoral agreements, which should be managed by the national bargaining parties (vertical coordination).

The effectiveness of Italian collective agreements is not extended by law. Employers can apply a collective agreement to their workers even if they are not a member of an employer organisation that signed it. Employer organisations and trade unions can sign a collective agreement even if they have not negotiated it (they may do so by ‘following’ it).

NCBAs provide for a minimum wage for employees in the sector they apply to. However, NCBAs apply to workers only if the employer decides so.

Article 36 of the Italian Constitution states that workers are entitled to remuneration commensurate with the quality and quantity of their work (the proportionality principle) and in any case to ensure them and their families a decent living (the sufficiency principle). According to Article 2099(2) of the Civil Code, in the absence of agreement between the parties, remuneration is determined by a judge. In the absence of further specific legislation on minimum wages, the constitutional principle is implemented by the ‘sufficient wage jurisprudence’, based on the combination of Article 36(1) of the Constitution and Article 2099(2) of the Civil Code. In particular, the Italian Supreme Court (Corte di Cassazione) states that only minimum wages established in NCBAs signed by the most representative social partners meet the requirements outlined in the Constitution. Therefore, wage provisions contained in NCBAs represent the criteria to assess wages set in individual contracts. Consequently, workers can sue their employers in labour courts in order to gain wages in line with parameters established by NCBAs. This is a case law mechanism to defend the wage conditions, especially for workers in union-weak sectors.

In principle, the law defines non-derogable principles. The NCBAs supplement these principles with detailed rules tailored to each economic sector, which should be non-derogable with respect to DCBAs.

Nevertheless, collective agreements can provide for opening clauses. Opening clauses mean a deviation from an NCBA and/or law (the TU 2014). The 2009 framework agreement introduced a preliminary scheme of opening clauses. Article 8 of Act No. 138/2011 introduced the possibility that DCBAs (contratti di prossimità) could introduce derogations to NCBAs and, in certain cases, even legislation. Pursuant to Act No. 81/2015, derogations from NCBAs and DCBAs with regard to the regulation of tasks and flexible work (for example, quota clauses in fixed-term work) are possible.

The 2009 framework agreement has adopted general rules regarding the timing of contractual renewals. NCBAs are in force for three years regarding legal aspects as well as pay. If a collective agreement is not renewed on time, a specific economic bonus is awarded to workers. According to the TU 2014, NCBAs can also establish the involvement of cross-sectoral social partners when sectoral social partners do not manage to agree on the contractual renewal. Collective agreements cease to be effective on the date of termination. The parties can continue to apply them, but they are not obliged to do so, unless the ultra-activity of specific provisions is expressly stated in the NCBAs. This happens in the vast majority of cases.

Although it is formally possible to call a strike during negotiations, social partners have autonomously regulated this issue by establishing peace obligation periods and procedures in interconfederal and sectoral agreements. These agreements cover the negotiation phase and include mechanisms of dispute resolution related to industrial action and disputes.