Pay agreement reached for public sector workers

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In May 2005, after several months of negotiations, the Italian government and the trade union organizations representing public sector workers affiliated to Cgil, Cisl and Uil signed an agreement for the renewal of the national collective agreement on pay covering more than 3 million public employees. The main novelties of the agreement are pay increases linked to productivity and a proposed mobility plan.

After a long period of negotiations, on 29 May 2005, the Italian government and the main Italian trade union confederations, the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacato Lavotori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil) signed an agreement for the renewal of the national collective agreement on pay for public sector workers which had expired 17 months ago.

The agreement concerns the employees of Ministries, Regions, Local Bodies, tax agencies, public health care services, Universities and Non-economic public bodies. The negotiations among the partners have been long and difficult. Three strikes were held before obtaining the renewal of the pay agreement covering about 3.4 million public employees (IT0504307F). The negotiations were conducted by the secretaries general of Italy’s three main trade union confederations Cgil, Cisl and Uil and by the representatives of the respective sectoral organisations Public Service Union (Funzione Pubblica, Fp-Cgil), Federation of Public and service Workers (Federazione Lavoratori Pubblici e dei Servizi, Fps-Cisl) and by the Public Administration Workers’ Unions (Pubblica Amministrazione, Pa-Uil).

There are several reasons behind the difficulties in reaching the agreement First, the severe financial crisis of Italy’s public budget and the structural crisis of the Italian economic system, which have reduced the margins of negotiations; secondly the divergences within the political forces which have limited the government decision-making capacity and lastly, the firmness of the trade unions about their requests which was strengthened by the common will of reaching an agreement setting, thus, a useful precedent for the renewal of all the other agreements of the private sector which are about to expire.

The agreement signed provides for an average gross monthly pay increase of 5.01% equal to EUR 99. Real pay increases will vary between EUR 120.7 for Public bodies to EUR 91.51 for Local bodies. About EUR 992 million will be needed to cover the costs of the application of the new pay agreement and will be included in the 2006 finance act (legge finanziaria). According to the agreement at least 0.5% of the increases established have to be allocated for the employees’ performance - related pay.

The government and the social partners have also decided to activate a mobility plan for public employees in order to support the organisational innovative process resulting from the systematic adoption of the new information technologies. The plan envisages to cut down about 60,000 jobs and to place about 50,000 on the mobility rolls before the end of 2007.

The social partners did not manage to reach an agreement on the reform of the bargaining system. The trade unions were, in fact, divided on the government proposal to include in the agreement the possibility of changing some bargaining rules established by the national tripartite agreement of 23 July 1993. Cisl and Uil were clearly willing to re-discuss the possible changes of the bargaining structure while Cgil defended the already established system threatening to walk out from negotiations if this issue would be included in the agreement.

According to Savino Pezzotta 'it was an important agreement and a major achievement for the trade union which managed to defend workers’ contractual rights and the purchasing power eroded by inflation'. According to Luigi Angeletti, secretary general of Uil 'it was a long and suffered negotiation but now pay increases are compatible with the State budget and in line with those of the private sector'.

Carlo Podda, secretary general of Fp-Cgil, expressed his satisfaction with the agreement signed but criticised the government for 'having allocated the additional economic resources just to the most urgent actions related to productivity and mobility'.

Criticisms on the agreement reached were also voiced by Alberto Bombassei, Vice Presidente of Italy’s main employers’ association, Confindustria, in charge of the management of the industrial relations and social affairs department. According to Mr Bombassei, in fact, the cost of the pay agreement exceed programmed inflation and risks reducing the funds aimed to support company’s competitive potential. But, the Ministry of Economy, Domenico Siniscalco, reassured employers about the impact of public sector bargaining considering it 'quite balanced in consideration of the funds allocated and of the envisaged mobility and productivity plans'.

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