Tool to measure labour costs in construction, Italy
The social partners in the construction sector defined a set of ‘appropriateness’ parameters in October 2010 to be used to assess the regularity of firms in terms of the incidence of labour on total costs. The parameters are designed to promote the regularisation of undeclared work. At present, an experimental phase is still under way.
The legislation on public procurement establishes that, with a view to fighting undeclared work, the appropriateness of the incidence of labour costs in each specific contract should be verified. This control shall be performed by the Construction Workers Welfare Funds (Cassa Edile, a joint body in the construction sector which is set up at provincial level and is responsible for social security and other service provisions) according to the parameters agreed at national level by the parties signatory to the industry-wide agreement more representative in the construction sector and the Ministry of Labour and Social Policies (art. 118 of legislative decree 163 of 2006).
On 28 October 2010, the employer associations in the construction sector, representing large industrial companies, the craft sector, and cooperatives, signed a joint statement with the major trade unions on minimum reference parameters on the incidence of labour costs in a number of types of building projects, ranging from new civil building and industrial sites, to refurbishment, the construction of roads, sewage systems, pipelines, sea and river works, and power stations.
The measure aims to define minimum parameters to be used by supervising authorities with a view to identifying anomalies. In fact, such parameters indicate minimum incidence levels of labour costs in different kinds of construction works. Under such levels, a presumption of non-appropriateness of the firm performing the work would apply.
The joint statement includes the identification of minimum incidence levels of labour costs in different types of construction works. In consideration of the high variability of construction works and of the organisation of building firms, the parameters were devised to underpin a twelve-month experimental application during 2011, which had to be followed by an assessment by a joint committee (Comitato della bilateralità). The experimental phase was to be administered and implemented by the Joint National Committee for Construction Workers' Welfare Funds (Commissione Nazionale Paritetica per le Casse Edili, CNCE).
The parameters shall be used only to promote the regularisation of irregular firms and they will be accompanied by a reduction in the labour costs of firms that prove to have an appropriate incidence of costs, for instance, by way of a reduction in social contributions or taxes. The certification of the appropriate incidence of labour costs will be issued solely by the competent Cassa Edile.
In the case where a building company does not reach the minimum appropriate incidence of labour costs in a particular building site, it will have the chance to explain the situation and provide additional information and documents. When the system is fully operative, failure to meet the appropriateness parameters will imply a ‘declaration of irregularity’, which would only be cleared if the building firms pays the difference between the declared labour costs and the level required to reach the appropriate incidence.
The actors involved are the sectoral social partners, that is the employer associations Ance, Anaepa Confartigianato, Cna Costruzioni, Fiae Casartigiani, Claai, Ancpl LegaCoop, Federlavoro e Servizi Confcooperative, Agci Produzione e Lavoro, Aniem Confapi and the trade unions Fillea-Cgil, Filca-Cisl, and Feneal-Uil. Other key actors are the Joint National Committee for Construction Workers' Welfare Funds and the local Construction Workers' Welfare Funds.
Outcome of evaluations: lessons and conclusions
Achievement of objectives
The system shows some important features, especially the role it assigns to the social partners in both the definition of the parameters and their implementation which is aimed at fostering the regularisation of undeclared work. However, the difficulties that emerged in the experimental phase led the social partners to agree on a postponement of the application of the system, to January 2013.
Obstacles and problems
The application of the appropriateness parameters presents a number of operative and administrative difficulties. For instance, it requires a declaration of the labour force employed in any single building site and this introduces a considerable rigidity in the mobility of workers between sites. Administrative burdens are also significant both for the supervising bodies and the construction firms.
This kind of promotional system, which involve many actors and requires an effective supervision of firms, should remain as simple and possible.
No indicators are available as the experimental period has been prolonged.
It appears to be as a transferrable system, but it presents a number of operative and administrative difficulties which should be taken into consideration in any attempts to replicate it.
CNCE - Commissione Nazionale Paritetica per le Casse Edili: http://www.cassaedile.it
Inps (2012, Rapporto annuale 2011.
Roberto Pedersini, Università degli Studi di Milano