New agreement for Fiat workers signals end of 10-year crisis

In June 2006, the Italian sectoral trade union organisation representing metalworkers and the Fiat car manufacturer renewed, after a gap of 10 years, a supplementary agreement covering more than 80,000 workers. A performance-related pay increase and greater job security for atypical employment relationships are among the key elements of the signed agreement.

On 28 June 2006, the sectoral trade union organisation representing the workers of the metal-mechanical sector and Fiat SpA signed a supplementary agreement covering all of the approximately 82,000 workers employed in the Fiat group. The sectoral trade union organisation represents the following unions:

• the Italian Metalworkers’ Federation (Federazione Italiana Metalmeccanici, Fim), affiliated to the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl);

• the Federation of White and Blue-collar Metalworkers (Federazione Impiegati Operai Metallurgici, Fiom), affiliated to the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil);

• the Italian Metalworkers’ Union (Unione Italiana Lavoratori Metalmeccanici, Uilm), affiliated to the Union of Italian Workers (Unione Italiana del Lavoro, Uil);

• the Italian Federation of Metalworkers’ Trade Unions and Related Industries (Federazione Italiana Sindacati Metalmeccanici ed Industrie Collegate, Fismic).

The agreement was signed after a month of negotiations, without any work time being lost in strike action, and will be valid until 2008. A separate agreement will apply for all sub-supplier companies. The signature of the renewed agreement marks the end of difficult staff relations within the context of a 10-year company crisis in the Fiat group (IT0509101N, IT0604029I, IT0601305F). It also represents an extremely important step towards a recovery strategy to be shared by both the trade unions and the company.

Content of agreement

Performance-related pay

The agreement provides for a total increase of €2,300 in performance-related pay, which currently stands at an average of €1,343 per year. The increase will be paid to workers incrementally: €500 in July 2006, €700 in July 2007, and €1,100 in July 2008 – €200 of the 2008 payment will be linked to profitability and €200 to productivity and quality.

The 2009 performance-related bonus will be set at the beginning of 2008. Moreover, the social partners have also decided to set up a joint committee to define the productivity indicator, and to analyse and verify wages according to the employment relationship.

Participation system

The social partners are to establish another joint committee to review the participation system. This committee will be in charge of verifying and rationalising the current industrial relations system as defined after the last agreement of 18 March 1996.

Supplementary healthcare system

From 1 January 2009, workers will have access, on a voluntary basis, to a supplementary healthcare insurance policy, two thirds of which will be paid directly by the company, amounting to €100, and one third by the worker (€50). In addition, workers will be able to extend the insurance cover to family members by paying an additional sum, which has not yet been defined.

Apprenticeship contract

Workers hired under the apprenticeship contract for generic manual labour will:

• be taken on with a second-level job classification;

• benefit from a pay increase;

• receive the performance-related pay;

• be given, after 13 months, a remuneration corresponding to the third level of job classification.

Atypical employment relations

The apprenticeship contract will also be used to provide greater job security for existing atypical workers, for example those on fixed-term or part-time contracts. The social partners should meet at each individual workplace and have the option of hiring all atypical workers aged below 29 years on apprenticeship contracts. It is envisaged that about 95% of these apprenticeship contracts will be confirmed. Furthermore, it will be possible to define alternative employment paths for other workers, aged over 29 years, for whom the apprenticeship contract is not applicable. This measure concerns about 1,000 atypical workers.

Reaction to the agreement

The new agreement was approved by 93.6% of the workers in the Fiat group.

The trade union representatives were highly satisfied with the results of the agreement. According to Fiom General Secretary, Gianni Rinaldini, the supplementary agreement is ‘satisfactory and provides the answer, even if partial, to some immediate problems – starting with the wage issue – and, at the same time, has defined a path for future negotiations by setting up the two joint committees’.

Fim National Secretary, Bruno Vitali, also expressed the approval of his organisation for the signed agreement and considered it very positive that the Managing Director of Fiat, Sergio Marchionne, was present at the bargaining table. According to Mr Vitali, the objectives set have been confirmed and many possibilities now exist to overcome the company crisis and to hire new workers in the future. The agreement lays the basis for meeting the challenge of competitiveness.

Uilm National Secretary, Eros Panicali, highlighted that workers will receive more money and that the plan to relaunch the company was shared by both the company management and the trade union. The next challenge to be faced is the final outcome of the company’s difficulties.

Meanwhile, Mr Marchionne voiced his satisfaction with the agreement, which he believes ‘is a sign of the new relations with the trade unions, which trust what the company is doing and understand that the commitments taken to overcome the crisis have been fulfilled’.

Marta Santi, Cesos