Local agreements highlight conciliation and arbitration procedures

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Late 1998 saw three local agreements in northern Italy introducing procedures for conciliation in individual labour disputes. These are significant examples of the application of a 1998 legislative decree which made it compulsory to seek conciliation in individual disputes. Conciliation and arbitration are also important in collective disputes, in particular in the case of strikes involving essential public services, and Sergio D'Antoni, national secretary of the Cisl trade union confederation, has recently proposed their use in an attempt to reduce conflict and strikes in the transport sector.

Conciliation and arbitration are topical issues in Italian industrial relations at present. Conciliation (conciliazione) involves seeking an agreement between the parties - employer and employee - which resolves a dispute between them, while arbitration (arbitrato) concerns the referral of the dispute to one or more impartial third parties.

The contents of legislative decree 80/98

Legislative decree 80 of 31 March 1998 has made attempts at conciliation mandatory in all individual labour disputes. The social partners can define conciliation procedures through collective bargaining, failing which an administrative procedure will be followed. Only in the event of a failure of conciliation is the dispute submitted to judgment by the courts. Previously, attempts to reach conciliation were compulsory only in the case of individual dismissals in small-sized firms (ie with fewer than 15 employees).

The aim of the legislative decree is to lighten the workload of the labour magistrates - at the moment the for labour disputes (Pretore del lavoro), but from June 1999 onwards the court magistrates. Furthermore, since 1 July 1998 local magistrates have been given competence over labour disputes in the civil service, which were previously adjudicated by the Regional Administrative Tribunals (Tribunali amministrativi regionali, Tar) (IT9703105N). In fact, surveys on the judicial application of labour law, in particular of the Workers' Statute (Statuto dei Lavoratori), had shown that the majority of cases concluded with conciliation, usually reached during the first hearing before the "Pretore" for labour disputes.

Legislative decree 80/98 also provides that, if no conciliation is reached, the case may be referred to arbitration rather than go to court. Specifically, the law states that the parties may agree to submit the dispute to arbitration by social partner organisations, provided that this alternative is envisaged by the relevant sectoral agreement. In other words, recourse to arbitration is possible only if the parties agree and if the sectoral agreement contains an express provision on the matter. However, collective agreements are not entirely free to determine the arbitration procedure, since the law stipulates that the following details must be included in the agreement:

  1. the form that the request for referral of the dispute must take and the time period within which the other party must agree;
  2. the composition of the arbitration board and the procedure for appointing its chair and members;
  3. the form that preliminary investigation must take (hearing witnesses, gathering documentation, and so forth);
  4. the deadline by which the board must issue its award; and
  5. the criteria for payment of the arbitrators.

If the collective agreement has complied with the legal provisions, the award issued by the arbitration board has substantial legal validity, since it can be challenged in the Court of Appeal only if it is in breach of fundamental principles of the law or is absolutely devoid of any motive.

A sensitive issue is arbitration procedures provided for by collective agreements that do not meet the requirements of the law. A situation of this kind may arise, for example, in the case of provisions agreed before legislative decree 80/98 was issued. However, it may also happen that collective agreements subsequent to the decree provide for informal arbitration as well as a formal procedure. In these instances, the different form of the procedure should affect only the legal validity of the award granted by the arbitrators: in the case of informal arbitration, the award would lose the special efficacy that the law attributes to the "formal award" and it may be challenged on all the grounds that justify appeals against ordinary contracts.

Arbitration and collective disputes

Legislative decree 80/98 covers only individual labour disputes. Sergio D'Antoni, national secretary of the Cisl trade union confederation, has recently proposed the use of conciliation and arbitration procedures to reduce conflict and strikes in the transport sector, setting this proposal against a call for stricter regulation made by Sergio Cofferati, the national secretary of the Cgil union confederation.

The possibility of referring collective labour disputes to arbitration is not new in the Italian industrial relations system. The social partners, in fact, have frequently viewed arbitration as the best means to settle disputes on rights and the interpretation and application of collective agreements, as witness the IRI Protocol of 1986 (applying to state-owned industry) and the 1990 agreement on the settlement of disputes and labour/management relations, signed by the Confindustria employers' confederation and the Cgil, Cisl and Uil union confederations. However, the limited effectiveness of the arbitration procedure, due to its lack of specific legal regulation, greatly reduced its use in the past, when the parties preferred to apply to the magistrates. The unions' renewed interest in arbitration may therefore be explained by the greater flexibility and rapidity of decisions by arbitration boards compared with the courts. It is no coincidence that the problem has been raised with regard to the transport sector, in particular where agreement is not reached on the provision of essential public services.

It is precisely in order to guarantee fundamental human rights that arbitration (in the broad sense) has been conducted by the Guarantee Authority (Commissione di Garanzia) on the right to strike in the essential public services, as introduced by law no. 146/90 (IT9802220F), albeit in the absence of specific legal provisions on the matter. More specifically, the Court of Cassation (Corte di Cassazione) - the court of last instance in the Italian judicial system - has ruled that the mandatory conditions for the issue of an injunction ordering striking workers in essential public services to return to work are: (a) that attempts at conciliation must be made between the parties, as provided by law no. 146/90; and (b) that the recommendations of the Guarantee Authority must be complied with (Corte di Cassazioneruling of 6 November 1997, no. 10889). This ruling highlights the intention to encourage recourse to consensus-based conflict resolution procedures like conciliation or to an impartial third party, the Authority, to arbitrate the dispute.

Three local agreements

Three recent local agreements have specifically applied the provisions of legislative decree 80/98 on compulsory prior conciliation in the case of individual disputes. The first of them was signed on 15 September 1998 by the Provincial Hoteliers' Association (Associazione provinciale albergatori) of Milan and the provincial organisations of the three service sector union federations, Filcams-Cgil, Fisascat-Cisl and Uiltucs-Uil. The second agreement, concluded on 24 September 1998, also concerned the province of Milan and covered the whole of the commerce and tourism sector. The signatories were the Trade, Tourism and Services Association of the Province of Milan (Unione del commercio, del turismo e dei servizi della provincia di Milano) and the same provincial union federations as signed the first agreement. The third agreement concerns the province of Turin and was signed on 24 November 1998 by the Turin Industrial Association (Unione industriale di Torino) and the provincial secretariats of Cgil, Cisl and Uil.

The three agreements are substantially equivalent in content and implement the provisions of legislative decree 80/98. All three of them provide for the creation of local joint conciliation committees consisting of two members, one appointed by the employers' association, the other a representative of the union to which the worker concerned belongs or which she or he has mandated to represent him/her. In Turin, the committee must meet within 15 days of the request for conciliation in order to examine the dispute and it must complete the attempt to broker conciliation within 60 days. At the end of the process, the committee submits a "record of conciliation" (or non-conciliation) to the Provincial Labour Office.


Although conciliation and arbitration procedures are part of the Italian industrial relations system, usually based on collective bargaining, until recently they were only infrequently used. The lack of specific legislative regulation and, as regards individual disputes, case-law findings largely favourable to the worker, have provided few incentives to reach conciliation through conciliation procedures before intervention by the "Pretore" for labour disputes. As for collective disputes, the antagonistic stances of trade unions and employers has weakened the effectiveness of the rules on conciliation and arbitration, because the parties have preferred other dispute-resolution mechanisms - such as politically-based ones like intervention by the government, ministers or prefects, or else conflict and collective bargaining.

These two factors are now showing signs of change. In the case of individual disputes, legislative decree 80/98 requires the parties to try to reach a conciliation before resorting to the magistrate's court. In the case of collective disputes, confrontational industrial relations are giving way to more participatory attitudes and institutions. Accordingly, the new impetus provided by the legislative decree to conciliation and arbitration procedures may enhance cooperation between unions and employers, while also supporting their autonomy in regulating the employment relationship.

A change of this kind would be particularly welcome in the essential public services, and especially in the transport sector, which is characterised by a high level of conflict. It should be pointed out, however, that the particular situation of this sector, where independent unions, even when small in size, are able to sustain high levels of conflict and "disruption" (IT9707209F), may render more feasible a strengthening of the Guarantee Authority's role, also as arbitrator, rather than the use of difficult conciliation procedures (Cristina Alessi, University of Brescia and Roberto Pedersini, Fondazione Regionale Pietro Seveso).

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