Metalworking agreement renewed

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After eight months of difficult negotiations, on 8 June 1999, Fim-Cisl, Fiom-Cgil and Uilm-Uil, the metalworkers' unions belonging to the three main trade union confederations, and the employers' associations Federmeccanica and Assistal accepted a mediation proposal put forward by the Minister of Labour, aimed at concluding the renewal of the collective agreement for the Italian metalworking industry. During June and July, the procedure for approval of the agreement involved consultation of trade union members on the Ministry of Labour's proposal, and a referendum of all workers on the text of the agreement agreed by the parties in June. In both consultations, the majority of votes were cast in favour of the agreement, which opened the way for its definitive signing.

On 8 June 1999, negotiations over the renewal of the collective agreement for the metalworking sector were successfully concluded when the employers' associations and trade unions accepted a mediation proposal put forward by the Minister of Labour (IT9906118N). Negotiations over the renewal had been long drawn out (IT9809234F), with moments of tension and conflict. From October 1998, in almost eight months of negotiations, there were around 30 meetings between the parties, three suspensions of talks, and 36 hours of strike action. In the end, after 12 days of negotiations at the Ministry of Labour, the parties accepted Minister Antonio Bassolino's proposal to resolve the last remaining problems, which were mainly to do with the issues of reduced working hours and flexibility.

The acceptance (initially only a "gentleman's agreement)" of the Minister of Labour's proposal by Federmeccanica, the major metalworking employers' association and the Italian Association of Heating, Electrical and Telecommunication Contractors (Assistal), both affiliated to Confindustria, and by Fim-Cisl, Fiom-Cgil and Uilm-Uil, the sectoral trade unions affiliated to the main confederations, was followed by a long and complex procedure. First of all, workplace assemblies were organised so that the Minister's proposed settlement could be explained to all workers. A ballot was held among all trade union members concerned, the outcome of which was approval of the mediation proposal by around 80% of the votes cast. The parties then drew up the definitive text of the agreement. This drafting process lasted until 30 June, after a number of difficulties had arisen which mainly concerned overtime and the "hours bank". On 7 July, the parties signed a preliminary agreement, which was then submitted to workforce approval by means of a referendum held on 12-14 July. The first results of the referendum, based on around 85% of the votes casts, showed that around 70% of the valid votes were in favour of the agreement. The process of approving the new agreement - which covers around 1.4 million metalworkers - therefore seemed to be concluded. All that remains is its formal signing of the deal, which was likely to take place by the end of July.

Contents of the renewed agreement

Apart from its economic content, the renewed metalworking agreement has introduced interesting innovations in the areas of working hours and their flexibility, the industrial relations system, and procedures for participation.

Pay and sectoral pension scheme

The agreement envisages an average increase of monthly minimum pay levels of ITL 85,000. This increase will be introduced in two stages: the first half in July 1999 and the second half in April 2000. Moreover, workers will receive a lump-sum payment of ITL 120,000 (Una tantum) for the delay in renewing the agreement, as well as, from 2000 onwards, an increase in the annual amount set aside for their end-of-service allowances. Another important provision is the increased contribution to the sectoral supplementary pension fund (named Cometa- IT9711139N): again from 2000 onwards, employers and employees will increase their payments from 1% to 1.2% of pay, and the share of the severance pay fund which accrues to the fund will be raised to 40% from its present 18%. Finally, periodic seniority pay increases have been changed into fixed sums. Previously they were expressed in percentages.

Working time

The main innovations regarding working time are the following.

  • The agreement allows for the definition at company level - on agreement with the unions - of a multi-week working time schedule, to allow for seasonal variations and contractors' activities, around an average of 40 hours a week. This working time flexibility covers 64 hours per year, with 48 hours set as the maximum length of the working week (reduced to 46 for workers on working hours schedules with at least 17 shifts) and 32 as the minimum. Throughout the reference period, the workers concerned will be paid at the rate for a normal working week. During periods of extra hours, they will receive a pay premium for working time exceeding normal schedules - 10% for extra hours worked from Monday to Friday and 15% for those worked on Saturdays and Sundays.
  • Shiftworkers will be entitled, on a gradual basis until 2001, to use 16 hours per year of reduced working hours as time off; previously, these hours formed part of an earlier 20-hour annual reduction which was compulsorily compensated with pay rather than time off. Moreover, workers on work schedules comprising at least 15 shifts will be entitled to a further eight hours of paid leave per year (from January 2002). This latter reduction will be granted to steelworkers starting from 2000, but it will not be possible to use it as time off since it will be obligatorily paid.
  • The sector's total 104 hours of previously agreed reduced annual working time will be transformed into 13 "packages" of eight hours each. A maximum of six packages can be used collectively, after prior consultation between the company and the unitary trade union representative body (Rappresentanza sindacale unitaria, Rsu). The remaining reductions are set aside for individual utilisation as time off. The hours of leave not taken in a particular year can be set aside in an individual "time savings account" and used by the worker within two years.
  • The annual ceilings on overtime have been raised by 50 hours. The new ceilings are 200 hours for firms with more than 200 employees, and 250 hours for smaller ones. The individual time savings accounts will also be used to set up an "hours bank" for overtime. In this way, individual overtime hours worked above a certain threshold - which will in any case be paid (32 hours for larger firms and 80 for those with fewer than 200 employees) - can be compensated with paid leave. In this case, the worker will receive only an overtime premium, although he or she always has the option of asking to be paid for the hours of overtime worked.

The industrial relations system

An important innovation is the principle set out in the agreement that the trade unions which signed the sectoral agreement and the company representation structure, the Rsu, are jointly entitled to take part in decentralised bargaining. In this way, the company-level platform of bargaining demands will be signed together by the unions that are party to the sectoral agreement and the Rsu. Moreover, the entire system of participatory "observatories" (see below) and joint committees at enterprise level and information disclosure provisions are based on the joint participation of the trade union organisations which signed the sectoral agreement and of the Rsu.

Another significant aspect is the impetus that the parties intend to give to the development of the "participatory method" in the sector's industrial relations through the creation of joint "observatories". These observatories will have the possibility of performing their tasks with the help of external experts selected by joint agreement. The agreement states that "the results, data and information produced by the observatories system will be stored in the metalworking sector database" and "may be disseminated online and by means of a dedicated Internet site".

The observatories will be organised on three levels: national, territorial and company. Company level observatories are envisaged for companies with at least 3,000 employees, 1,000 of whom working in a single production unit. Their task will be to undertake "specific initiatives of analysis, study and research on matters jointly agreed by the parties", which concern ongoing trends in the sector, industrial development, analysis and monitoring of company agreements on performance-related pay, and, only at the national level, participatory systems and the European social dialogue. Company-level observatories will analyse market structure and trends, industrial strategies and organisational changes, and employment trends. Confidentiality clauses on information disclosure apply to the participants in company-level observatories.

Similar participatory structures, based on joint committees and organised on three levels, are envisaged for the issues of vocational training and for equal opportunities. In particular, vocational training committees will analyse the sector's training needs and develop joint training schemes to meet them. Also envisaged is the creation of a committee for vocational training in firms with more than 2,000 employees, at least 350 of whom work in a single production unit. This committee will have the task of monitoring training initiatives, analysing training needs, and reporting them to the relevant territorial joint committee. The equal opportunities committees, for their part, will analyse female employment in the sector, devise and propose training schemes, study and promote affirmative actions, support work reintegration following maternity leave, and monitor and combat sexual harassment in the workplace. The equal opportunities committees too will be set up in companies with more than 2,000 employees, of whom at least 350 work in a single production unit.

The system of rights to information has been reinforced by the new agreement. Depending on company size, local trade unions and the Rsus will be informed about:

  • changes in technology, organisation and production (companies with more than 200 employees);
  • employment trends, industrial investments, training schemes and projects which concern or affect the work environment (companies with more than 350 employees);
  • changes in process technologies (companies with more than 500 workers); and
  • decentralisation of production (the minimum threshold for this information is 150 employees, and if the firm has more than 350 workers the information must be given beforehand).

The agreement's scope and other aspects

An interesting feature of the agreement is that its scope of application has been redefined. It has been extended to cover high-technology areas - hardware and software, the production of devices for telephony, telecommunications, network management and telephony services etc - and other areas affected by outsourcing, as it has been extended to include "production and service units which have interconnections of significant importance with the metalworking sector".

Finally, other points of the agreement also concern: part-time work, which is encouraged and made more flexible in terms of working hours arrangements; temporary agency work, for which, amongst other things, a ceiling on the number of temporary workers is set (8% of total employment of indefinite duration); the creation of a joint study group on telework; and the introduction of some further workers' rights as regards sickness and applications for leave.

Evaluation by the social partners

The social partners have declared themselves satisfied with the agreement. Andrea Pininfarina, president of Federmeccanica, has stated that the deal has positive aspects as regards flexibility, and that it is the first step in a process which may lead to industrial relations based on closer collaboration between firms and trade unions. The employers' associations, however, have emphasised that the renewal will increase costs, especially for steel firms, and state that these increased costs may have negative effects on competitiveness. The trade unions' main reasons for satisfaction are the agreement's endorsement of the bargaining structure introduced by the national tripartite agreement of July 1993 (IT9803223F) - notably through the joint trade union/Rsu entitlement to take part in company-level bargaining - and the results obtained as regards a system of participatory industrial relations. Besides, the unions consider the redefinition of the agreement's scope to include subcontracting firms as an important increase in the level of protection of the workers employed in the sector.

Commentary

The renewal of the industry-wide agreement for the metalworking sector raises some interesting points for reflection.

First, it is possible to say that the agreement shows a substantial confirmation of the existing policy of wage restraint, even though employers have emphasised a growth in indirect costs with potential negative impacts on firms' competitiveness. In fact, the cost increases are seemingly in line with the expected inflation rate and take place after a period in which business profits were able to benefit from moderate wage rises. It is also worth noting the attention which is paid to supplementary pension schemes: this is a topic which is apparently gaining growing importance within bargaining on economic issues (IT9806228F), probably in the light of the pension system reform which is tending to reduce the benefits assured by public schemes.

Second, working time flexibility represents another important aspect of the agreement. On one side, trade unions, in response to employers' association requests, agreed an increase in the annual limit on overtime work which is set in the sectoral agreement, thereby taking into consideration the recent reform of the relevant legislation (IT9812192N). On the other side, the parties agreed on a clearer regulation of the use of overtime work, through the creation of the hours bank. In this way, when production needs allow it, workers will be able to obtain time off in exchange of overtime work, when and if they ask for it. Besides, the open definition of a quota of working time reductions which is set aside for individual use (at least seven "packages" of eight hours each), as opposed to the part which can be used for collective utilisation (a maximum of six "packages"), increases the possibility that workers will benefit from working hours reductions which do not correspond to a decrease in normal working time.

Finally, the part of the deal which modifies the industrial relations system has some very interesting aspects. The coordination and joint entitlement to bargaining which links the unions which signed the industry-wide agreement and the Rsu, confirms the social partners' will to create a bargaining system characterised by "coordinated decentralisation", an intention which was included in the July 1993 central tripartite agreement. Moreover, it represents an important indication at a time when the law on the reform of company-level representation in under discussion (IT9804226F). The emphasis on participatory industrial relations is thus a very significant feature for a sector in which antagonistic attitudes have always been strong. If the experience of the system of joint observatories and committees, together with the enrichment of information disclosure rights, proves to be positive, this may help strengthen the industrial relations system based on "social concertation" and social partners' participation which has been under construction, though with variable results, in Italy since the early 1990s, and which has been questioned in other areas, notably by the reform of the welfare system (Roberto Pedersini, Fondazione Regionale Pietro Seveso).

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