Employers and unions sign development pact for Vibo Valentia province

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In January 1999, the social partners were among the signatories of an agreement seeking to promote the location of new companies in the Italian province of Vibo Valentia (Calabria). The "development pact" includes three separate agreements, covering: ways of easing bureaucracy for companies; financial aid for companies; and general employment conditions (signed by employers and trade unions).

Vibo Valentia (Calabria) has one of the highest unemployment rates of any of the provinces of Southern Italy. In the "league table" of quality of life in Italian cities published every year by Il Sole 24 Ore (the daily newspaper of the Confindustria employers' confederation), Vibo Valentia currently comes 95th. This depressed situation has led the social partners to conduct a policy of dialogue and consultation aimed at overcoming the province' underdevelopment and at upgrading existing local resources in order to open the area to national and international markets and to attract foreign investment. The result is a new "development pact" (Patto per lo sviluppo) signed on 5 January 1999 by employers, trade unions, provincial and municipal government representatives and representatives of banks, which consists of three separate agreements.

The first agreement creates a "one-stop shop" (sportello unico) for companies to fulfil their various administrative obligations and formalities. This attempt to streamline bureaucratic practices represents a new willingness on the part of the public administration to encourage and facilitate the location of new companies and to foster employment.

Under the second agreement, companies that locate in the Vibo Valentia area will receive financial aid, especially in the form of strong support from the banks in the area.

The third agreement, on conditions of employment, was signed by territorial and local employers' associations and the Cgil, Cisl and Uil trade union confederations. The agreement allows new companies to employ workers on work/training contract s at a job classification two levels lower than that which the employee will achieve at the end of the contract. Usually such workers are employed at a classification only one level lower than the level which they will attain. The special lower level will apply for the duration of the work/training contract and for the first 12 months after the employee moves to an open-ended employment contract. The same special conditions will also apply to existing companies which increase their workforces, on the basis of a plan agreed with the trade unions. The other key points of the employment conditions agreement are as follows:

• fixed-term contracts may be used, without any limitation on the ages of the employees involved, but they should nor exceed 20% of open-ended contracts. Companies with under 20 employees may have no more than four fixed-term workers;

• apprenticeship contracts are made more attractive for companies Pay rates will be 70% of the collectively agreed minimum during the first year, 75% for the second year, 85% for the third year and 90% for the fourth year;

• in order to encourage companies to hire, on open-ended contracts, long-term unemployed people or workers on the "mobility list" or receiving "special short-time earnings compensation" (Cassa integrazione guadagni straordinaria, Cigs) (IT9802319F) the pact provides for "work-entry" contracts. This kind of contract foresees, for the first three years of employment, remuneration equal to the level of job classification below that on which the worker was employed before;

• employers are given the possibility of organising working hours on a yearly basis instead of a weekly or daily basis, allowing working time to be organised so as to allow the maximum exploitation of production plants;

• companies may use fixed-term or open-ended part-time contracts, with the number of hours to be worked during the year to be agreed with trade unions;

• in existing companies, overtime work will be able to exceed by 20% the upper limit foreseen by the relevant national sectoral collective agreement, with a maximum of 250 hours per worker per year. For new companies, the limit may be exceeded by 30%, though still with an annual maximum of 250 hours;

• there will be a four-year moratorium on company-level bargaining in new companies and in established companies that enlarge and modernise their structures; and

• in order to foster the employment of low-skilled workers, it is foreseen that they may be employed on a wage equal to 33% of the normal wage after 12 months of work, 66% after two years and 100% after three years.

The secretary general of Cisl's local organisation, Raffaele Blandino, stated that "the development pact initiative was implemented in order to promote the location of productive activities in the area. Other initiatives able to attract productive investment may follow."