National collective agreement signed for industrial managers

Download article in original language : IT0412104NIT.DOC

A new national collective agreement for Italy's 80,000 industrial managers was signed in November 2004 by the Confindustria employers' confederation and the Federmanager managers' association. The agreement, which has a longer duration than its predecessors, reforms the pay system, increases supplementary pension contributions and seeks to provide greater financial assistance to redundant managers.

In Italy, there are about 80,000 'industrial managers' (dirigenti industriali), 71.43% of whom work in the North of the country, 21.22% in the Centre and 7.35% in the South. Their average age is a little over 50 and average length of service about nine-and-a-half years, while average annual gross remuneration stands at about EUR 95,000. About 10,000 companies have an 'industrial manager' on their staff. Of these, 76.91% employ up to three managers, 17.08% from four to 10 managers, 3.35% from 11 to 20 and 2.66% more than 20.

Following a pre-accord signed in September 2004 (IT0410307F) a new national agreement for industrial managers was signed on 24 November 2004 by the Confindustria employers’ confederation and the National Federation of Industrial Company Managers (Federazione Nazionale Dirigenti di Aziende Industriali, Federmanager). The duration of the agreement is increased to five years - from 1 January 2004 (retrospectively) to 31 December 2008 - compared with the four-year term of its predecessor. The main innovative provisions are as follows.

• Pay will be established on the basis if individual company-manager negotiations in order to allow, according to the signatories, a closer relationship between company performance and management pay. However, the agreement sets an obligatory minimum remuneration for managers, which will be used as a reference point. In 2004, for example, the gross annual 'minimum wage' for a manager with under six years' service is EUR 52,000, rising to EUR 62,000 for those with longer service. By 2007, these rates will stand at EUR 55,000 and EUR 70,000 respectively. At the end of each year, the amount of money actually earned by the manager and the minimum rate will be compared, and any shortfall will be made up in December by a one-off payment. This new system replaces the previous contractual minimum salary levels pegged to basic monthly pay.

• The employee contribution to Previndai, the supplementary pension fund for industrial managers, is increased to 3% of total pay for those with longer service and 4% for others, while the employer's contribution also rises to 4%. The partners will examine the state of implementation of the relevant legislation before February 2005.

• Where industrial managers lose their jobs or are affected by restructuring, the current legislation does not allow the use of the 'social shock absorbers' that apply to other employees - availability list s (liste di mobilità) or the Wages Guarantee Fund (Cassa integrazione guadagni, Cig) (IT0311306T) - but only ordinary unemployment benefit equal to EUR 900 per month. According to Giorgio Usai, human resources and welfare director at Confindustria, this benefit covers about 60%-70% of blue- or white-collar workers’ remuneration but does not have the same value for managers. The signatories of the new agreement have thus decided to ask the government to modify the legislation and create an ad hoc fund to which a contribution worth 0.3% of managers' pay will be diverted - this sum currently goes to the National Social Security Institute (Istituto nazionale per la Previdenza Sociale, Inps) to fund measures from which managers are excluded. The new fund should be used to supplement the unemployment benefit paid to managers. A new joint technical working group, made up of three representatives each from the employers and Federmanager, will define before 28 February 2005 the implementation and operational procedures of the new joint fund. The agreement provides that the fund will be operational as soon as possible, preferably before 31 December 2005, even if the relevant legislation does not change.

• Two other two joint bodies will be created: a standing joint observatory to monitor variable pay schemes; and a joint technical committee to assess requests for funds for training.

According to Alberto Bombassei, the vice-president of Confindustria, this is a 'very innovative agreement that seeks to re-evaluate the professional profile of the manager and change company culture'.