Reform of inspection services, Italy
Decree Law No. 124 of 23 April 2004 introduced reform of the labour inspection services. The aims were to improve coordination and information exchange between the various agencies involved, and to move beyond the traditional penalty based approach by also offering advisory services.
Italy has a long history of attempting to tackle undeclared work, and this experience has resulted in a high level of knowledge on the problem. Nevertheless, the poor outcomes – generated above all by Law 383/2001 promoting the regularisation of irregular work – highlighted the need to implement a combination of penalty and support measures. Low success rates also convinced policymakers of the urgent need to change the type of inspection carried out by the different agencies involved. It seemed that a different relationship should be established between the state and its citizens. This resulted in the issue of Decree Law No. 124 of 23 April 2004 introducing reform of the labour inspection services.
The main actors involved include the: Ministry of Labour and Social Security (Ministero del Lavoro e delle Previdenza Sociale); National Committee for the formalisation of non-registered labour (Comitato per l’emersione del lavoro non regolare); National Social Security Institute (Istituto Nazionale Previdenza Sociale, INPS); Italian Workers’ Compensation Authority (Istituto Nazionale per l’assicurazione contro gli infortuni sul lavoro, INAIL); Customs Service; Revenue Agency; trade unions; and employer organisations.
The target groups include workers and employers.
The legislative reform aims to:
- coordinate the inspection activity carried out by all agencies in charge of labour and social legislation, as well as by those responsible for combating undeclared work;
- improve the exchange of information between the inspection bodies and the organisations that specialise in preventing non-registered labour and promoting regularisation (horizontal cooperation), as well as between the central administration and peripheral administrations (vertical cooperation);
- extend the mostly penalty-oriented traditional tasks of the inspection bodies by including new softer types of measures advising the companies concerned on how to avoid irregular work practices;
- prevent recurring forms of offence;
- highlight new or particularly complex provisions;
- introduce both in the traditional penalty-oriented inspection activity and in the preventive advisory inspections a number of assessment mechanisms based not so much on the number of sanctions but on other indicators.
The new strategy involved the following organisational changes:
- positioning the Ministry of Labour and Social Security at the top of the hierarchical structure of the inspection system, enhancing both its guidance and coordination functions;
- creating regional and provincial management offices for labour, in addition to the general management head office.
The new regional and provincial offices carry out their work through:
- a central coordination commission including: the managers of the various bodies and of the National Commission for the formalisation of non-registered labour, the manager of INAIL, the commander of the Customs Service, the manager of the Revenue Agency, the national coordinator of the local health units, and four members of the most representative trade unions and employer organisations;
- a regional coordination commission including the managers of the same bodies operating at regional level;
- Committees for work and its formalisation (Comitati per il lavoro e l’emersione del sommerso, CLES) including the trade union and employer representatives, as well as the above agencies operating at provincial level.
Evaluation and outcome
As this measure was introduced relatively recently, no evaluations are available. However, a number of articles by trade union and employer representatives are in favour of the change.
Achievement of objectives
It seems that inspections are increasing, judging by the cases of irregularity discovered and reported in newspapers such as the national business daily Il Sole 24 Ore. However, it is not yet apparent whether this is the result of the coordination among the different bodies or of increased monitoring levels.
Obstacles and problems
Coordinating the inspection and prevention activities carried out by the Ministry of Labour and Social Security required a change in the public officials’ way of working. In the past, staff have been more concerned about complying with the regulations from a formal point of view than about the outcomes achieved.
Additional problems can arise when implementing the strategy of vertical and horizontal cooperation, which represents an integral part of the reform; this innovation also requires a change in the public officials’ behaviour.
It is too soon to assess the lessons learnt and draw conclusions.
Undoubtedly, this reform is going in the right direction in combating undeclared work. However, for its full implementation, the inspection and prevention activity must be evaluated. To do this, it will be necessary to identify the quantitative and qualitative indicators of these activities which are to be added to the regular communication of outcomes achieved. The growing pressure exerted by various newspaper articles with respect to cases of tax evasion and the informal economy might facilitate the application of this reform.
Main organisation responsible: Ministry of Labour and Social Security
Liliana Bàculo and Sara Gaudino