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In March 1998, Italy's Confindustria employers' confederation broke off negotiations with the Government on the reduction of the statutory working week from 40 to 35 hours, and proposed new social concertation and dialogue rules.
In October 1997, in order to avoid a governmental crisis, the Italian Government and the left-wing Rifondazione Comunista party signed an agreement committing the former to presenting a law which would reduce the working week from 40 to 35 hours by the year 2000 (IT9710133N). The Government started up a separate consultation process on working time with the social partners (IT9711216F) and on 18 March 1998, during a meeting with the Confindustria employers' confederation, the Government confirmed that it would present a bill on the reduced working week (as indeed it did on 24 March - IT9803159N).
The Confindustria president, Giorgio Fossa, left the meeting heavily criticising the Government's plans and threatening to consider as no longer valid the tripartite central agreements reached in July 1993 (IT9803223F) and in September 1996 (IT9702201F), which constitute the cornerstones of the Italian system of social concertation and dialogue. According to Mr Fossa, the Government is being held hostage by a political party which is opposed to a European orientation. He also criticised the "imposition of a law without positive consequences for employment that will certainly have a negative impact on the country" (quoted in Il Sole 24 Ore, 22 March 1998).
The trade unions described Confindustria's action as "an irresponsible and self-destructing act" (Il Sole 24 Ore, 19 March 1998).
On 27 March, Confindustria held an extraordinary meeting of its executive, during which it confirmed once again its opposition to the statutory 35-hour week (IT9802148N) because "it penalises the competitiveness of the Italian and European productive system, it does not leave any place for collective bargaining for a long period of time, it splits the labour market into large and small enterprises and accentuates the North-South dualism" (Il Sole 24 Ore, 28 March 1998).
Confindustria has decided not to declare invalid the July 1993 tripartite agreement on incomes policy, but to ask the Government and other social partners to launch new global negotiations that would establish rules and procedures for concertation. The process should address what employers consider the main problems facing the country and enterprises' competitiveness: labour flexibility, unemployment, infrastructures, development of the Italian South or Mezzogiorno and the reform of public administration.
This position was appreciated both by the prime minister, Romano Prodi, and by trade union organisations. Mr Prodi, during the Confindustria meeting held in Parma, affirmed that the Government wants to keep looking for dialogue and agreement with the social partners. The unions described the employers' decision not to declare invalid existing agreements as "an act of responsibility" and they think that the government proposal to reduce the working hours "can be compatible with the incomes policy" (Il Sole 24 Ore, 29 March 1998).