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EIRO 2005 Annual Review for Italy

Italy
Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.
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Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

1. Political data

In April and May 2005, important administrative elections (regional, provincial and municipal) were held in Italy. A total of 41,908,117 voters, equal to 71.4% of those entitled to vote, went to the polls, which was a 1.6% decrease in turnout compared to the previous administrative elections of 2000.

Fourteen regional councils were renewed (Piedmont, Lombardy, Veneto, Liguria, Emilia Romagna, Tuscany, Umbria, Marche, Lazio, Abruzzo, Campania, Puglia, Calabria and Basilicata); 10 provincial councils; 17 capital-municipality councils and 77 councils for non-capital municipalities with more than 15,000 residents.

Overall, the elections saw significant advances by the centre-left coalition, now forming the parliamentary opposition, and a decline in support for the centre-right coalition now in government. Of the 14 regional councils, 12 went to the centre-left and 2 to the centre-right (Lombardy and Veneto). As for the municipal councils of the largest towns where elections were held, centre-left mayoral candidates were elected in Venice and Trento, and centre-right ones in Bolzano and Catania.

Any significant political events which took place in 2005

On 16 November 2005 the Italian senate enacted the bill which reforms part of the Italian constitution (IT0512102N). The reform entrusts Regions with the exclusive legislative competence of: health care assistance and organisation; school organisation and training; definition of school and training programmes; regional and local administrative police. Besides devolving some of the central state powers, the reform grants more powers to the prime minister and weakens the position of the President of the Republic. It also establishes a federalist tax-based system, which, in perspective, would substantially reduce the State available resources - according to an equal distribution principle - between rich and poor regions.

Criticisms for the federalist approach of the reform came from the trade unions, both at national and regional level, as they see a risk linked to the devolution of powers to the regions, whereby citizens may be offered diversified services according to the region where they live and its relative wealth.

Any forthcoming national or important regional/local elections or significant political events

On 19 April 2006 the entire country will go to the polls to elect the national parliament. The two political formations ranged against each other are the centre-right coalition led by the current prime minister, Silvio Berlusconi, and the centre-left coalition led by its candidate for premier Romano Prodi.

In May 2006, administrative elections will be held to elect the regional council of Sicily, 8 provincial councils and 1,250 municipal councils, 24 of which are also regional or provincial capitals (among the most important being Roma, Milan, Naples, Turin, Cagliari and Trieste).

2. Collective bargaining update

According to data on sectoral collective bargaining provided by the National Statistics Institute (Istituto nazionale di statistica, Istat), at the end of December 2005, there were 58 agreements in force; these accords concerned almost 8.4 million of dependent employees, which represents 69.6% of all the employees covered by the survey. During the 2005, 23 agreements were renewed, which regarded almost 2.7 million of dependent employees, representing 25.3% of the total paybill covered by the survey. Between the agreements renewed, 11 agreements concerned their normative part (which has a period of validity of four years) and 12 agreements concerned their pay part (which has a period of validity of two years).

Among the sectors involved in renewals, of particular relevance are the renewal of collective agreements in banking and telecommunications sectors, and the renewal of the pay part of the collective agreements for rail workers, for dependent employees in food and beverage sector and for public employees. In the public sector, in particular, in September and October the social partners reached the renewal of the national collective agreements for school workers - teachers, auxiliary, technical and administrative employees - covering the 2004-2005 economic contractual period (IT0510101N).

At the end of 2005, 18 are the collective agreements expired but not renewed yet, representing 30.4% of the total paybill and concerning 3.9 million of workers. On average, workers in sectors where the collective agreement has expired have been awaiting renewals for 15.7 months (Istat figures). One of the main collective agreements still awaiting renewal at the end of 2005 was the pay part of the metalworking agreement, which had expired at the end of 2004. After one year of negotiations marked by a series of strikes held both at national and local level, the renewal was eventually signed on 19 January 2006 (IT0602301F).

Pay (including both general trends and the level of collectively-agreed pay increases)

According to figures from the National Statistics Institute, in 2005 the index of wages according to collective agreement per hour was on average of 112.8 points (on the basis December 2000=100) with a increased by an average of 3.1% compared with the 2004. Annual changes of the index of wages according to collective agreement per hour were above the average in the following sectors: armed forces ( 12%); police ( 8.9%); commerce ( 5.4%); agriculture ( 5.1%). Conversely, in the following sectors pay rises were moderate: metal machinery ( 1.9%); activities linked to transports ( 1.8%); energy and petroleum ( 1.6%); divisions in public sector employment ( 0.7%).

Among the sectoral collective agreements renewed in 2005, in May 2005, after several months of negotiations, the Italian government and the trade union organisations representing public sector workers affiliated to the General Confederation of Italian Workers (Confederazione generale italiana del lavoro, Cgil), the Italian Confederation of Workers’ Unions (Confederazione italiana sindacato lavoratori, Cisl) and the Union of Italian Labour (Unione italiana del lavoro, Uil) signed an agreement for the renewal of the national collective agreement on pay covering more than 3 million public employees (IT0507101N). 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 authorities. 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 budget law. According to the agreement, at least 0.5% of the increases must be allocated to performance-related pay. After this agreement, in September 2005, the Italian trade union organisations representing the workers of the school and public sector and the Agency for the representation of public administrations in collective bargaining (Agenzia per la rappresentanza negoziale delle pubbliche amministrazioni, Aran) reached an agreement on the pay part of the industry-wide agreement for the 2004-2005 period. The agreement concerns more than 1 million workers: 817,330 teachers and 244,230 auxiliary, technical and administrative employees. The agreement provides for an average monthly pay increase of EUR 130. The agreement defines also progressive pay increases of EUR 330 for school collaborators and of EUR 1,000 for technical-administrative assistants, per year -which will concern about 25% of them.

In the private sectors, on 17 September 2005, the sectoral trade union organisations representing the workers of the food and beverage sector, the Federation of Agro-Industrial Workers (Federazione dei lavoratori dell’agro-industria, Flai), the Italian Food and Agriculture Organisation (Federazione agro-alimentare, Fai) and the Italian Union of Food Industry Workers (Unione italiana lavoratori agroalimentare, Uila) - respectively affiliated to Cgil, Cisl and Uil - and the sectoral employers’ association, the Italian Federation of Food and Drink Industry (Federazione italiana dell’indusria alimentare, Federalimentare) signed the renewal of the pay part of the national collective agreement, which expired on 31 May 2005. The agreement covers about 300,000 workers and provides for an average monthly pay increase of EUR 96 (EUR 40 in September 2005, EUR 40 in March 2006 and EUR 16 in March 2007). On 23 June 2005, the national collective agreement on pay for workers in the railway sector, which had expired 6 months previously, was renewed (IT0507102N). The new agreement was reached after several months of negotiations and two sectoral general strikes. The agreement sets an average monthly gross pay increase of EUR 100. Moreover, in August 2005 workers received a one-off payment (una tantum) of EUR 320 to cover the period between the expired agreement and its renewal. After ten months of talks and three general national strikes, the renewal of the banking industry’s collective agreement was signed on February 2005 by the trade unions affiliated to the main confederations and by the Italian banking Association (Associazione Italiana Bancaria, Abi), the main the employers’ organisation of the sector (IT0503102N). The agreement provides for a 6.5% pay increase, an average of about EUR 146.71 per month. Moreover, 0.1% of overall annual wages will be destined to finance the Supplementary pension fund for young workers employed after 1994. These workers, in fact, saw the application of less favourable pension rules compared to those previously applied to the other workers.

Working time (including working time reductions and flexibility agreements)

In general, the national collective agreements renewed during 2004 continue to regulate the introduction of the new forms of work foreseen by legislative decree 276/2003 implementing proxy law 30/2003 (IT0307204F), which reformed the Italian labour market. Collective bargaining has consequently regulated the use of some of these new forms of employment introduced by law to increase flexibility in all aspects of work, including time flexibility.

Among the sectoral collective agreement renewed in 2005, the collective agreement signed in December 2005 by trade unions and the employers association in the Italian telecommunications sector provides that the average amount of work will be calculated over a reference period of six months, which may be extended to 12 months by agreement with the unitary workplace union structure. The rest period between two shifts is increased to at least 11 hours (from the previous eight). The agreement also includes a definition of night work. Quarterly restrictions on overtime have been removed and replaced by an annual limit (IT0512305F).

At company level, in late January 2005, Siemens Vdo Automotive (part of the German-based multinational) and trade unions signed a company-level agreement that introduces Sunday working and a reduction of weekly working hours (the total weekly working time decreases from 35 to 32 hours, IT0502303F). On 5 April 2005, after 15 months of talks, Ferrari Auto and the Italian Federation of Metalworkers (Federazione impiegati operai metallurgici, Fiom), the Italian Metal-Mechanical Federation (Federazione italiana metalmeccanici, Fim) and the Union of Italian Metal-Mechanical Workers (Unione italiana lavoratori metalmeccanici, Uilm) - respectively affiliated to the Cgil, Cisl, Uil - signed a collective agreement with the aim to combine the increase in company’s productivity and profitability through an incentive system, a more intensive use of the plants’ equipments and the introduction of a greater working flexibility. In order to achieve these company’ objectives, the trade unions and the company have established a series of flexibility rules for the exploitation of the plants’ equipments, as well as new shifts and working times without, however, increasing the weekly working time of the single workers. Thus, the agreement provides for the introduction of a supplementary shift on Saturday and an economic bonus of EUR 20 for workers doing the Saturday-shift. The company agreement valorises part-time work and extends the possibility of making recourse to this form of employment trying to meet workers’ needs of combining family and professional life.

Job security

During 2004 and 2005, crisis situations that emerged in the Italian production system have been a cause of much concern to both the government and the social partners. Industrial crises have affected almost every part of the country and the majority of productive sectors. Company restructuring and reorganisation gave rise to the most significant measures concerning job security. These processes of reorganisation and restructuring affected especially firms in the following sectors: clothing, footwear, leather goods, textiles, wood and furniture (or the so-called made in Italy sectors) and metalworking. In general, these plans involved both large industrial groups and individual companies of significance in their sector.

With no claim to exhaustiveness, there now follows a list of the most significant company agreement s signed in 2005 which have directly or indirectly addressed the issue of job security:

  • the company agreement signed between Siemens Vdo Automotive Spa and the Employers’ Association of Pisa (Unione industriali di Pisa) on the one hand, the Unitary workplace union structure (Rsu) and the main sectoral trade unions on the other. The agreement, that concerned workers at the German multinational’s plants in the area between Livorno and Pisa, is innovative in the context of Italian industrial relations, because it runs counter to the increasing tendency for firms to relocate production abroad. The agreement introduces Sunday working, a concession made by the unions in exchange for considerable wage increases, reduced weekly working hours and the guarantee of new recruitments (IT0502303F);
  • the agreement reached in June 2005 between the government, local authorities, trade unions, and the Natuzzi group (a world leader in the manufacture of sofas) whereby 1,220 workers have been covered by the Wages Guarantee Fund. The company has also guaranteed that it will maintain significant levels of production in Southern Italy (IT0507103N);
  • the company agreement reached in June 2005 between the Fiamm group, which manufactures vehicle batteries, and the main trade unions in the group’s plants in Italy. Under the agreement, the company has undertaken not to implement its relocation plan which provided for the closure of two plants in Italy and the consequent loss of 410 jobs. In exchange, the workforce has undertaken not to veto the work reorganisation plan, which will introduce greater temporal flexibility, and to give up temporarily their pre-holiday bonuses, a sort of extra monthly pay introduced by company bargaining;
  • the company agreement reached between the Whirlpool group, the world’s largest manufacturer of domestic appliances, and the main trade unions in the metalworking sector. The agreement - approved by a workforce referendum - establishes: a significant reduction (from 1,000 to 520) in the redundancies initially envisaged by the company’s restructuring plan; the limitation of redundancies to those workers who are already eligible for retirement or reach eligibility during the period covered by the income support measures (the mobility allowance, which lasts from one to three years); the provision of economic incentives for workers who leaves the company; the integration by the firm of the income support measures granted in case collective redundancy, so to preserve the income levels of redundant workers; new investments in Italy by Whirlpool accompanied by the introduction of innovative work organisation methods in its plants (IT0505205F);
  • on February 2005, Italy’s national airline company, Alitalia, and the sectoral trade union organisations representing flight attendants, the Italian Transport Workers’ Federation (Federazione italiana trasporti, Filt-Cgil), the Italian Transport Federation (Federazione italiana trasporti, Fit-Cisl) and the Union of Italian Transport Workers (Unione italiana lavoratori trasporti, Uiltrasporti-Uil) reached an agreement on the application of the flight attendants agreements signed on 18 September 2004 (IT0410104F) with the aim of reducing to zero the number of redundancies envisaged by the previous agreement (IT0504103N). The 900 redundancies envisaged by the restructuring plan would have brought to Alitalia savings for EUR 80 million starting from 2006. In order to avoid redundancies, the agreement provides for incentives to early retirement and a contribution of solidarity on behalf of all workers. This contribution will correspond to 12 non-paid working days, divided into two years (2005-2006) on a rotation basis among flight attendants.
  • On February 2005 the Italian trade unions and the German-based steel making group ThyssenKrupp signed an agreement which puts an end to the long dispute about the closure of some company’s plants (IT0501307F, IT0503103N). The agreement provides that the occupational level will remain stable for the whole duration of the new industrial plan (2005-2009) if there are not specific market changes. The plant-level trade union representatives and the company management engaged to meet every three months to monitor market trends, the occupational situation and investments. ThyssenKrupp will also sustain and take part in research and development initiatives which will be launched at local level.
  • opportunities and diversity issues, including efforts to close pay inequalities

In terms of pay inequalities, a recent report - Contrattazione, retribuzioni e costo del lavoro in Italia nel contesto europeo, 2002-3, published by the National Council for Economics and Labour (Consiglio nazionale dell’economia e del lavoro, Cnel) and drawn up by the Centre for Economic, Social and Trade Union Studies (Centro di Studi economici, sociali e sindacali, Cesos) - analyses gender pay differentials in Italy between 1998 and 2002, and suggests that they could be explained by variations in productivity (IT0502102F). The analysis indicates that, even though the gender gap in annual earnings is following a downward trend, it is still high. In 1998 men earned per year on average a quarter more than women, falling to 23.5% more in 2000 and 20.6% more in 2002. These differences are mainly determined by the fewer hours worked by women compared to men, the wage gap is in fact significantly narrower if hourly wages are considered (4% - 5%). The report finds that the annual wage differential increases consistently with age, education and qualification level. Similarly, analysis of wage differentials by vocational qualifications and educational levels indicates that the higher the qualification the wider the pay gap. Between 1998 and 2002, women managers earned about 35% less than men with the same vocational qualifications, compared with gaps of 23% - 25% for middle managers and 15% - 20% for blue- and white-collar workers. Therefore, the report suggests that experience and length of service may play a fundamental role in the causes of the gender pay gap. Women’s employment is characterised by longer periods of inactivity compared with male employment. Their periods of absence from the labour market are mainly due to maternity leaves, care of children and dependants and a different retirement age. At the end of the working life, this absence means a lower seniority level with their current employer (an average of 19 years of seniority service for women against 21 for men in 2002).

Among the collective agreements at company level renewed in 2005, the Italian multinational group Bitron- which produces automotive and appliance components for several industries - and the sectoral trade union organisations affiliated to Cgil, Cisl and Uil signed a company agreement for two plants of the Group located in the Piedmont region (IT0505102N). In particular, the agreement provides a flexible working time modulated on the needs of female employees. The Bitron group, given the high percentage of female workers employed in the two units (about 70% of total personnel), opted for a variety of part-time contracts among which night part-time work (16 or 24 hours worked only during the night), Saturday work (when employees works on Saturday will have a day off during the week), and part-time week-end (Saturday, Sunday plus another day of the week).

At sectoral level, a report published in January 2005 by the Italian Food and Agriculture Organisation (Federazione agro-alimentare, Fai-Cisl) analyses the problem of balancing work and family life and indicates certain company agreements, signed in the recent years by firms in the food sector, that introduced significant measures about these issues (IT0506104F). In particular, the study highlights the company agreement signed at the Tre Valli food company, which has proposed a fixed form of part-time work, similar to job-sharing. The part-time option is permitted in cases of giving assistance to disabled family members, for health problems or for the care of young children. The agreement signed at the Ferrero food and chocolate company has provided part-time work to working mothers hired on open-ended contracts following their maternity leave until the child reaches three years of age, as well as to other categories of workers with proven health problems. Other companies, such as Lavazza, have introduced the possibility of working partial or fixed shifts for working mothers returning to work after maternity leave. Among the most innovative and original forms of support is that introduced by the Kraft company which, besides offering a regulated flexibility in working hours, has provided its employees with the option of benefiting from a range of supplementary services: home-delivery of groceries, dry-cleaning, bank, postal and registry office-related services.

Training and skills development

Among the sectoral collective agreements renewed in 2005, the deal for the telecommunications sector included the right for workers to training and study for 160 and 150 hours a year respectively, and the creation of a joint training body, which, among other goals, will have to liaise with Fondimpresa, the intersectoral fund for continuing training (IT0202103F).

At company level, the agreement at Bitron group introduced 150 remunerated hours of training leave under the form of foreign language courses, IT courses and special vocational refreshing courses.

Any other issues

During the 2005, social partners continue the debate about a possible reform of the collective bargaining structure established by the national tripartite agreement of 23 July 1993. In September 2005, Confindustria - the major Italian employers’ association - presented to the trade unions a document that reaffirms the validity and efficiency of the current two-tier bargaining system but emphasises a need to improve the mechanisms that guarantee compliance with the rules, in particular those on the right to strike and no-strike clauses (IT0508206F).

3. Legislative developments

Between the end of September and the end of October 2005, the government prepared the budget law for 2006 (IT0511305F). Of the around EUR 25 billion covered by measures included the budget law, more than 16 billion are to be used to restore the deficit/2006 GDP ratio to 3.8% from the predicted 4.9%, as required by the European Commission. One of the distinctive features of the manoeuvre is the reduction of financial transfers to local authorities, the cutbacks being 3.8% less than in 2004 for regions, and 6.7% for municipalities and provinces. Another key aim of the law is to curb spending in the public administration, with the renewals of all public-sector agreements being postponed to 2006 (with the exception of ministries, public undertakings, schools and universities).

The reaction by Cgil, Cisl and Uil - which were not consulted or involved in the drafting of the bill - has been entirely hostile. In order to protest against the budget law, the main trade union confederations staged a four-hour general strike on 25 November and sent to Parliament, the Government, Confindustria, and the autonomous provinces a joint document setting out proposals for amendment to the 2006 budget law (see also Industrial action section).

On 24 March 2005 the Italian government approved two legislative decrees implementing the reform of the school and training system introduced by Law 53/2003, known as the Moratti reform (IT0304106F), named after the Ministry of Education Letizia Moratti. The first decree, which regulated the duty-right to education and training, provides that young people will have to attend school for at least 12 years compared to the previously 9 and achieve, at the age of 18, a title of vocational qualification or a high school diploma. The vocational qualification may also be achieved through an apprenticeship contract.

The second decree has introduced the possibility for students aged between 15 and 18 - attending either vocational training schools or high schools - to alternate school and work periods. This school-work alternating system will provide the possibility to obtain training credits. The school or training institution will also be able to issue a certificate attesting the competences acquired by the students. This certificate will be useful to continue the studies or to enter the labour market.

4. The organisation and role of the social partners

In May 2005, Confindustria held its annual assembly (IT0506101N). In July 2005, Cisl, one of Italy’s three main trade union confederations, held its 15th national congress (IT0508307F). Some key issues of debate in the two meeting were common: the re-launch of competitiveness of the Italian productive system; the reform of the welfare state; and the restructuring of collective bargaining system. Concerning this last item, Cisl maintains that the agreement of 23 July 1993 is no longer able to safeguard the real purchasing power of the employees’ income, owing to the scant diffusion of decentralised bargaining. The bargaining structure should therefore be modified, in order to remedy the excess of bargaining centralism that prevents consolidation of second-level (company and local) bargaining and consequently hinders improvement of pay levels and income distribution. Cisl believes that both bargaining levels should be given priority, with a strengthening of the second - company or territorial - level. On the other hand, Confindustria does not propose a structural reform of the current bargaining system; rather, it wants to strengthen mechanisms to ensure compliance, at every level, with the rules established by the social partners. Moreover, Confindustria emphasises a need to improve the mechanisms that guarantee compliance with rules on the right to strike and no-strike clauses.

On 17 December 2005, the Italian social partners and the regional institutions signed a manifesto for the development of the South of Italy to fight the decline of the country’s economy by re-launching the development of Southern regions. The document contains proposals and common commitments on several issues: companies and labour; development of infrastructures; urban re-qualification; enhancement and strengthening of the educational system; valorisation of tourist sites and re-launch of tourism (IT0601102N). The document follows a joint document signed by the three trade union confederations and 13 employers’ associations and presented to the government in November 2004, setting out proposals for re-launching the economy of the South of Italy (IT0411107F). In this case, the trade unions have criticised the current centre-right government for abandoning social concertation with the social partners to address important economic and social issues and implement an acceptable incomes policy (see section Industrial action).

5. Industrial action

In 2005, there was an increase in industrial conflict, largely connected to both the renewal of collective agreements and to the confrontation between government and trade unions over some key issues. According to Istat figures, in the period January-October 2005, a total of 5.5 million of working hours were lost due to industrial action (37.3% more than in the corresponding period in 2004). Of these hours lost, 39.6% (equal to around 3.3 million of working hours) were due to industrial action over the renewal of collective agreements.

Some sectors were mainly involved in industrial conflicts:

  • metalworking sector; in October, 400,000 working hours were lost in this sector, ie 84.1% of the monthly working hours lost due to industrial action. The industrial conflicts are mainly connected with the difficult situation of the renewal of the pay part of the sectoral collective agreement, which had expired at the end of 2004 (IT0509205F);
  • the public sector (IT0504307F);
  • the transport sector (IT0508104N), which confirms itself as one of the more strike-prone industries in recent years.

In 2005, industrial conflict was also connected to the confrontation between the government and trade unions, in particular over the budget law for 2006 (IT0511305F). In order to protest against the government action, Cgil, Cisl and Uil published a joint document on amendment of the budget law and held a four-hour general strike on 25 November. The first part of the document assesses the method and contents of the budget law. As regards the method used by the government to draw up the budget, the unions claimed that it was in breach of the provisions of national tripartite agreement of 23 July 1993 on consultation of the social partners (IT9709212F), as the unions were given no prior information at all about the budget. As far as the budget law’s contents are concerned, the unions criticised it because, in the words of the general secretary of Cgil, Guglielmo Epifani: it supports neither consumption nor development, it does not contain a policy for the Mezzogiorno (South), and none of its measures will restore the public accounts to financial health.

The second part of the document focused on some key issues, which the main trade union confederations consider crucial to re-launch the Italian productive system:

  • Social emergencies. Refinancing of the National Social Policy Fund (Fondo nazionale per le politiche sociali) with definition of essential levels of social welfare, and the creation of a National Non Self-Sufficiency Fund (Fondo nazionale per la non-autosufficienza) for elderly and disabled people;
  • unemployment and industrial emergencies. Increased income support benefits for job losers, refinancing of the fund devoted to support companies in difficulty, in order to tackle current industrial crises, and implementation of the necessary sectoral policies;
  • Mezzogiorno. Tax relief on investments in the South, upgrading and completion of infrastructures, and closer cooperation between universities, research centres and business innovation;
  • civil service. Allocation of resources for the renewal of collective agreements in 2006-7, and the holding of talks on measures aimed to favour conversion of flexible contracts (fixed-term, training/work, temporary agency, freelance) into permanent contracts across all branches of the civil service;
  • prices and tariffs. Introduction of a price governance policy by means of decentralised agreements between social partners and service providers, the purpose being to keep price rises below the planned inflation rate;
  • housing. Measures to stabilise the housing market, and the introduction of a policy to assist first-home buying, including by couples on flexible employment contacts (through access to mortgages).

6. Employee participation

In March 2005, Confindustria, the Italian Banks Association (Associazione bancaria italiana, Abi), the Italian Insurance Companies Association (Associazione nazionale fra le imprese assicuratrici, Ania), the General Confederation of Trade, Tourism, Services and SMEs (Confederazione generale italiana del commercio, del turismo, dei servizi e delle PMI, Confcommercio), the Italian Confederation of Local Public Services Companies (Confederazione delle imprese e degli enti che gestiscono servizi pubblici locali, Confservizi) and Cgil, Cisl and Uil signed a joint opinion on transposition of the EU Directive (2001/86/EC) on employee involvement through the recognition of information and consultation rights and, under specific circumstances, of forms of participation, accompanying the European Company Statute (EU0206202F). Through this agreement the social partners presented the legislators with their joint position on the text of a law to be enacted only after prior consultation with them (IT0505103N).

The joint text signed by the social partners introduces, for the first time, in our regulatory system the presence of employees in the company’s organs: the supervisory and the administrative organs. The signature of the joint opinion allowed the trade union confederations to overcome the previous divergences on the issue of participation, which had been dividing the confederations for a while.

According to Cgil, Cisl and Uil the dualistic model is the most appropriate model to express employees’ participation rights. This model provides for the presence of the workers representatives in the supervisory board and in the administrative board. Cgil, Cisl and Uil intend to support the diffusion of the dualistic company model.

The joint opinion, which will be now presented to the Parliament and the Government, signed by all the social partners reflects the importance and the efficacy of the social concertation method in the negotiation of important agreement between the partners. The partners auspicate that the same method of social concertation will be adopted by the government before issuing possible legislative measures in view of the transposition of the Directive 2001/86/EC and before the transposition of the other two European directives, the one relative to employees’ information and consultation rights (2002/14/EC) and the one on the European cooperatives (2003/72). In this regard, according to the trade unions, the role of the European Works Councils (EWC) as transnational structures should be enhanced.

As regards participative arrangements in particular, great importance by the trade unions is attached to the workings of the bilateral committees and joint bodies. In Italy, bilateral bodies (run jointly by the workers’ representatives and employers) operate in various sectors (industry, crafts, cooperation, commerce, tourism, temporary agency work) and deal with issues of prime importance, such as management of the social shock absorbers and continuing training (the latter via the recently-created multisectoral funds.

7. Labour migration

On 20 December 2005 the representatives of Italy’s three main trade union confederations met in Rome to discuss about the European-level parliamentary debate on the proposed EU services Directive (the Bolkestein Directive), and about the possible initiatives against the inevitably knock-on effects on employment conditions entailed by some aspects of the Directive (IT0601101N).

The Italian trade unions together with the European trade unions are strongly opposing the approval of the Directive in its current form and are campaigning for further amendments. The meeting of 20 December 2005 enshrined the unity of actions and intents of the three confederations. The trade unions believe that the directive in its current form represents a veritable attack to the social dimension and to the European social model.

Cgil, Cisl and Uil - in a note addressed to the European Trade Union Confederation (Etuc) - in view of the definition of the National Action three-year Plan for the implementation of the Lisbon strategy, stressed the importance of guaranteeing free and competitive markets both at European Union and national level but not at the detriment of the European social and economic development, as it would be if the Bolkestein directive is approved.

The objective of the Italian trade unions, in line with the ETUC’s indications, is twofold: on one side, they plan to launch an information and awareness campaign to make workers alert about the risk linked to the possible approval of the directive and, on the other side, they intend to put pressure on the members of the European Parliament elected in Italy, in order to reject the directive in its current form.

In April 2004, the Italian government issued a decree to limit, for two years, labour migration from new Member States of Central and Eastern Europe. At the same time, the government introduced a specific additional quota of 20,000 immigrant workers who are citizens of these countries, in order to enforce the principle of communitarian preference. Similarly, the reserved quota for 2005 was fixed at 79,500. Such restrictions will come to an end in 2006. The decree recently issued by the Prime Minister’s office on planned immigrant inflows into Italy for the year 2006 set the maximum number at 340,000 entries, of which half are for non-EU workers and the rest (170,000 entries) are reserved for workers from the new EU member-states. During the current transitional phase, the preferential treatment granted since 1 May 2004 to the nationals of the neo-EU countries has also comprised a less restrictive procedure whereby a stay permit is issued for 10 years, whereas for non-EU immigrant workers issue and renewal of the permit depends on the duration of the work contract (Law 189/2002, the so-called Bossi-Fini Law).

The majority of migrants who are present in Italy come from extra-EU countries, and especially from high emigration countries. Almost two-thirds of all visitors’ permits were granted for work reasons (see tables 1 and 2 below). The data on stay permits show (Table 1) that Romanians now constitute the largest immigrant community, which is larger in size than both the Moroccan community, historically the biggest since the beginning of the century (as reported by the 2001 Census) and the Albanian community, which was the most numerous in early 2003. There then follow Ukraine and China, with more than 100 thousand stay permits issued. Most recent years have therefore seen the significant growth of numerous groups of immigrants from Balkan Europe and the East. Moreover, there has been a marked increase in the holders of stay permits for work purposes (Table 2), who at the end of 2003 numbered 1,450,000 and worked mostly in subordinate employment. In the three previous years the figure had remained substantially stable at around 830-840 thousand, while the growth in the number of immigrants was accelerated by family reunions (around 50-60 thousand a year), which in 2001-2002 gave rise to a 30% increase in stay permits issued.

The number of immigrants active in the Italian labour market can be estimated at around 1.7 and 1.8 million. This represents an approximately 6% share of the labour force, with an activity rate of around 70%, which is distinctly higher than that of the labour force in Italy (61.4% in 2003 with reference to 15-to-64 year olds).

Table 1. Visitors’ permit for country of origin
Table Layout
Country of origin Visitors’ permits Residents
  2000 2002 2003 2001 (census) 2003
Romania 69,999 94,818 239,426 74,885 177,812
Albania 146,321 171,567 233,616 173,064 270,383
Morocco 162,254 170,746 227,940 180,103 253,362
Ukraine 9,068 14,802 112,802 8,647 57,971
China 60,143 64,010 100,109 46,887 86,738
Philippines 65,073 65,575 73,847 53,994 72,372
Poland 30,419 34,980 65,847 27,220 40,314
Tunisia 45,972 51,137 60,572 47,656 68,630
United States 45,528 45,642 48,286 16,871 14,132
Senegal 39,170 36,959 47,762 31,174 46,478
India 30,006 34,324 47,170 27,188 44,791
Peru 30,142 31,323 46,964 29,452 43,009
Ecuador 11,170 12,281 45,859 13,716 33,506
Serbia-Montenegro 40,151 40,237 45,302 49,324 51,708
Egypt 32,381 31,061 44,798 27,331 40,583
Sri Lanka 33,789 35,696 41,539 26,474 39,231
Macedonia 22,504 26,210 33,656 28,073 51,208
Bangladesh 20,820 22,237 32,391 14,695 27,356
Pakistan 18,551 20,616 30,506 15,619 27,798
Others 466,288 499,065 615,607 442,516 542,777
Total 1,379,749 1,503,286 2,193,999 1,334,889 1,990,159
Total extra-EU 1,233,584 1,352,420 2,040,530 1,202,822 1,856,614
% extra-EU 89.4% 90.0% 93.0% 90.1% 93.3%
High emigration countries (HEC) 1,154,187 1,270,766 1,949,680 1,155,357 1,816,301
% HEC 83.7% 84.5% 88.9% 86.6% 91.3%
% HEC/extra-EU 93.6% 94.0% 95.5% 96.1% 97.8%

Source: Cnel elaboration on Istat data.

Table 2. Visitors’ permits reasons (on 31 December 2005)
Table Layout
Reason 2000 2001 2002 2003 2000 2001 2002 2003
  Figures %
Work 837,945 840,966 829,761 1,449,746 60.7% 58.1% 55.2% 66.1%
-Subordinate 665,334 684,479 682,250 1,328,912 48.2% 47.3% 45.4% 60.6%
-Independent 89,653 104,672 110,052 120,834 6.5% 7.2% 7.3% 5.5%
-Searching for a job 82,958 51,815 37,459 - 6.0% 3.6% 2.5% -
Family 365,894 421,761 477,959 532,670 26.5% 29.1% 31.8% 24.3%
Study 30,476 33,215 38,012 43,596 2.2% 2.3% 2.5% 2.0%
Other 145,434 152,450 157,554 167,987 10.5% 10.5% 10.5% 7.7%
Total 1,379,749 1,448,392 1,503,286 2,193,999 100.0% 100.0% 100.0% 100.0%

Source: Cnel elaboration on Istat data.

8. Corporate social responsibility

At company level, in February 2005, the Italian multinational group Bitron and the Fiom-Cgil, Fim-Cisl e Uilm-Uil signed a code of conduct for the group’s activities located abroad (IT0505102N). The signature of the antidumping code for all the group’s foreign activities raises from the trade union need of establishing a fixed set of rules able to encourage fair competitiveness among all Bitron plants located abroad (Poland, Brazil, China and Spain).

The main items of the antidumping code agreed upon with the company are:

  • application of the heath and safety regulation in the workplace;
  • respect of labour rules and rights as well as equal opportunities rules;
  • respect of trade union freedoms and autonomy;
  • prohibition of child labour and respect of the International Labour Organisation regulation;
  • respect of European environmental and safety regulations as regards the use of products.

9. New forms of work

In Italy, the debate on the forms of atypical employment has increased since the government approved the reform of labour market in 2003 that introduced a range of alternatives employment contracts from which employers (or workers, albeit to a lesser extent) can choose according to their needs (IT0307204F).

The growth of atypical employment was pointed out by Eurispes research institute in its last annual report (IT0504206F). The report stresses that over the past 10 years the growth of non-dependent forms of employment has been matched by an increase in atypical dependent employment, which comprises part-time work on open-ended contracts and part-time and full-time work on fixed-term contracts.

The number of part-time workers on open-ended contracts increased by 16.3% between 2000 and 2003. In 2003, a total of 14,464,000 workers were on open-ended contracts; of these, 7% (more than 1 million workers) were employed part-time, of whom 86.8% were women.

There are three different types of contract regulating fixed-term employment in Italy: fixed-term contracts for full-time or part-time work; contracts that combine work and training - ie apprenticeship and work/training contract s, though following a 2003 reform of the labour market, the latter have been replaced by work-entry contracts; and temporary agency work contracts. In 2003, there were:

  • 1,583,000 workers on fixed-term contracts. Of these, 443,000 were employed on a part-time basis (29.3% of the total). Women accounted for the largest proportion of such part-time employment (65.7% of workers on fixed-term part-time contracts);
  • 651,648 workers on employment contracts that combine work and training - a 15.2% decrease in comparison with 2000 (almost entirely due to a cut in work/training contracts).

As regards temporary agency work, the implementation of law 196/1997, which regulates the activities of temporary work agencies (IT9707308F), has produced a significant increase in the number of workers on this type of flexible contract. According to Istat, in 2002 the average number of temporary agency workers was more than 140,000 per month, which was an increase on the previous year. Working days by agency workers over the year amounted to 24 million, a figure corresponding to around 95,000 full-time equivalent workers (0.59% of total dependent employment and 0.43% of the total average for 2002).

In the case of non-dependent atypical work (IT0404303F), the scant availability of data makes precise quantification of the number of employer-coordinated workers (known as co.co.co. workers) very difficult. According to estimates by Cnel, there were 695,419 pure semi-subordinate workers in 2003, and 59% of them were women. According to the Eurispes report, the use of employer-coordinated freelance contracts has grown progressively, and considerably when compared with the general employment trend. Between 2000 and 2003, total employment grew from 21,080,000 to 22,054,000, which was an increase of 4.6%, compared with a 28.8% rise in employer-coordinated freelance workers (who numbered 540,067 in 2000 and 695,419 in 2003). This trend is confirmed also by the Italian Social Security Institute (Istituto nazionale previdenza sociale, Inps), which estimates that, among the atypical employment contracts, economically dependent work represented an increasingly widespread form of employment in Italy (IT0308304F, IT0509104F).

In general, the introduction of a wide range of forms of flexible work contracts caused profound divisions between the majority and the opposition parties, which consider the contractual forms of flexible work introduced by the last reform of labour market not useful to the socio-economic development of the country. According to the majority of the opposition parties, these forms of atypical employment promote generalised flexibility that can be associated more closely with the negative aspects of flexible work: principally precariousness, which in some cases considerably impedes the taking of concrete life choices and the building of a continuous career path. Similar criticisms were expressed by the trade union organisations.

10. Other relevant developments

On 24 November 2005 the Italian government approved the legislative decree implementing proxy law 243/2004 (IT0409101F) on the reform of the supplementary pension system, which had been rejected in October 2005 (IT0510105F). The reform will take effect on 1 January 2008 together with the application of the reform of Italy’s first pension pillar, the public obligatory pension system, which raises retirement age from 57 to 60 years of age (IT0512101N).

From 1 January 2008 (2009 in the case of small and medium companies), the reform of the so-called second pillar of the pension system provides the immediate transfer of the end-of-service allowance (a portion of a worker’s pay - around 8% - set aside by the employer and then paid as a lump sum at the end of the employment relationship) into supplementary pension funds. The workers employed in private companies will have six months to decide whether to transfer their accrued severance pay to a closed fund (set up by collective agreement and restricted to workers in a particular sector) or to an open one (promoted by institutions permitted to operate pension funds and intended mainly for self-employed workers and professionals). Up until 2008 the current rules on the voluntary transfer of the end-of-service allowance to the pension fund, on behalf of workers, will remain in force.

The reform of Italy’s second pension pillar and, in particular, the postponement of its application, raised the disappointment of the parliamentary opposition and of the main trade union confederations, which consider unfair and senseless the enactment of a reform without its short-term application. Conversely, Confindustria expressed his satisfaction with the solution adopted by the government and with the approval of the reform which grants a moratorium to companies before the transfer of the end-of service allowance.

11. Outlook

2006 could be crucial for Italian industrial relations in many respects: for the relations between the social partners and the government; for bilateral relations between the social partners, and notably for the structure of collective bargaining. A number of issues and tensions which have been building for some time are apparently reaching the stage where some adjustment, even if of a temporary nature, may be unavoidable.

First, on April 2006 the national parliament will be renewed. The new government must be confronted with the relevant task to boost the country’s competitiveness and economic development. Some priority measures will have to be taken in various fields, mainly aimed to promote investment in research, development and innovation; to sustain the internationalisation of Italian companies; to strengthen the social shock absorbers (the measures that support employees during restructuring, IT0311306T); to accelerate the processes of liberalisation and privatisation; to reduce the costs of labour. The challenge will be how to implement such a relevant set of changes. Decisive to influence the results of this process will probably be the decision of the next government to confirm the method often used in the recent years by the current executive and essentially characterised of a greater autonomy in the field of social and employment policies or, instead, to re-launch the concertation method, that in the past has enabled the achievement of important objectives in terms of incomes policies, flexibilisation of the labour market, reform of the pension system and redefinition of the collective bargaining structure.

As far as collective bargaining is concerned, in 2005 the two-tier bargaining structure introduced by the tripartite agreement of 23 July 1993 has been under strain for some time, as demands for further decentralisation have increased. Any doubts on the sustainability of the existing bargaining structure may also call into question the viability of the current incomes policy. At present, the limit on sectoral wage bargaining set by the planned inflation rate (under the terms of the 1993 agreement) has been under attack by the trade unions, which consider it to be too restrictive and often excessively low.

  • renewal of the pay part of the metalworking collective agreement signed in January 2006 by the Employers’ Association of the Italian Metal-Mechanical Industry (Federazione sindacale dell’industria metalmeccanica italiana, Federmeccanica) and Fiom-Cgil, Fim-Cisl and Uilm-Uil could product some effects on the debate on the bargaining structure started in the 2005 among the trade union confederations and between the social partners. In fact, the metalworking agreement introduced some relevant novelties and notably provided a pay increase for all the workers not covered by company-level bargaining.

But the negotiations on renewal of metalworking agreement was also characterised by radical protests conducted by workers who blockaded with a series of sit-down protests some of the main motorways which connect the areas more industrialised of the country. During the 2005, an increase in social tension emerged not only in the metalworking industry, but also in other crucial sectors as the public sector (IT0504307F) and transports (IT0509303F; IT0508104N). Probably, an improvement or a worsening in the industrial relations climate will depend on the capacity of the social partners and the new government to reduce social conflict and promote an incomes policy that will be able to give effective answers to the urgent trade unions pay demands - mainly generated by the increases in the cost of living which have hit especially workers and retired people - and, at the same time, to the employers’ requests to improve the competitiveness of the Italian productive system. (Diego Coletto, Fondazione Regionale Pietro Seveso, and Livio Muratore, Ires Lombardia)

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