Second phase of public sector reorganisation launched

Italy’s Minister for Public Administration and Innovation presented a second reform plan for the public sector in September 2008, which aims to identify, enhance and disseminate best practices in the sector. Meanwhile, the Council of Ministers issued the budget law for the year 2009, providing for the payment of pay increments even in the absence of a collective agreement. The trade unions have strongly criticised the government’s unilateral action and called for mobilisation.

After the first measures to reform Italy’s public sector employment were introduced in June 2008 (IT0807039I), the Minister for Public Administration and Innovation, Renato Brunetta, launched the second phase of his reform programme on 4 September 2008. This part of the government’s reorganisation plan (Non solo fannulloni! (44Kb PDF)) aims to increase the efficiency of Italy’s public administration by identifying, enhancing and disseminating cases of good practice within the country’s administration.

Meanwhile, on 23 September 2008, the Council of Ministers issued the budget law for the year 2009, which envisages the payment of pay increments even in the absence of the national collective agreement for public sector workers.

Provisions of reform plan

The second phase of the public administration reorganisation plan is based on five actions:

  1. publication on the ministry’s website of good practice examples of efficient administration and public sector employees who have improved service provision – for example, in terms of accessibility, good timing, user numbers and user satisfaction, reduced costs and rationalised spending without reducing the quality and quantity of services;
  2. establishment of an online forum on the ministry’s website for reporting positive experiences and examples of success by public sector workers;
  3. organisation of a ‘competition’ to identify and reward the best results achieved by innovative administrations;
  4. exchange of positive territorial experiences by organising meetings in the various regions of the country, which show best practice examples and have cooperative programmes between various actors in place;
  5. financing of schemes intended to encourage poorly-performing administrations – that is, administrations which offer inefficient services to citizens or record irrational spending and high costs – to achieve results similar to those of efficient administrations.

Minister Brunetta considers that the outcome of these actions will provide a negotiation basis for performance-related pay increments and merit bonuses during the pending collective bargaining round in the public sector. According to the agreement in force, the social partners were to enter negotiations introducing a triennial duration of public sector agreements, by December 2007 (IT0706029I).

Nonetheless, when the second phase of the public sector reform was launched, the criteria to assess and evaluate the performance of the country’s administrations still needed to be defined. This phase of the reorganisation involved various stakeholders, including employer organisations, non-governmental organisations (NGOs) and consumer associations.

Renewal of public sector agreement

In parallel, the government issued the budget law for 2009 on 23 September 2008. The latter allocates resources amounting to about €2.8 billion for the 2008–2009 renewal of the national collective agreement for public sector workers. In addition to this figure – which, according to Minister Brunetta, will guarantee wage increases equal to 3.2% – a further €200 million should be made available deriving from cutbacks on consultancies; however, the latter amount is not quantified in the 2009 budget law. It is meant to be allocated to productivity bonuses paid locally on the basis of the selective performance reward mechanism described in the second public sector reform plan.

However, the most interesting innovation in the 2009 budget law relates to the capacity given to Minister Brunetta to disburse an advance pay increase equalling 90% of the resources allocated by the budget law and a collective interim pay guarantee amounting to €150. The minister will be in a position to allocate these pay provisions while awaiting an accord with the trade unions on the new public sector agreement. Similar initiatives had already been undertaken in the private sector by the Fiat Group while awaiting renewal of the metalworkers’ collective agreement (IT0711019I).

Reactions of social partners

The government’s second programme for reform has received substantial support from the employer organisations – in particular, from the largest employer association, the Confederation of Italian Industry (Confederazione Generale dell’Industria, Confindustria). The latter has been complaining for a long time about the damage to Italy’s economic system caused by the inefficiencies of the public administration.

On the trade union side, the General Confederation of Italian Workers (Confederazione Generale del Lavoro, Cgil), the Italian Confederation of Workers’ Trade Unions (Confederazione Sindacale del Lavoro, Cisl) and the Union of Italian Workers (Unione dei Lavoratori, Uil) have already begun mobilisation. The trade unions mainly complain about the lack of union involvement in drawing up the reform plan and about the fact that they were not convened for negotiation on the agreement’s renewal. As stated by a joint press release, according to the trade unions, a ‘general negotiating table’ should be created, since ‘only at that level it is possible to resolve the various aspects of a bargaining process of extraordinary complexity; until the negotiations begin, the mobilisation will continue’.

Commentary

The government’s initiatives in relation to reorganising the country’s public administration prompt two main considerations. First, Italy’s public administration suffers from a longstanding problem of inefficiency and its reform can no longer be postponed. Second, the government’s tendency to proceed unilaterally with both the administration’s reorganisation and pay increases raises questions over its procedures. Such a unilateral approach inevitably provokes the hostility of the trade unions and, if the government continues to go ahead with reforms without consultation, it will certainly have major repercussions on industrial relations in Italy’s public sector.

Edoardo Della Torre, Ires Lombardia

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