Reform of public sector bargaining agency approved

Download article in original language : IT9711217FIT.DOC

A recent decree, approved in November 1997, has significantly reformed the system of employers' representation for collective bargaining within the Italian public administration. This article discusses the changes made to the structure and tasks of Aran, the agency which negotiates with trade unions in the public administration. An important effect of these changes will be a greater role for individual units of the public administration in the bargaining system.

In early November 1997, the Italian Parliament approved a legislative decree (No. 396) which amends important aspects of industrial relations in the public administration. The decree modifies or supplements three aspects of a wide-ranging reform approved in 1993 (legislative decree No. 29), namely:

1. the scope, structure and efficacy of collective bargaining;

2. the structure and tasks of Aran (Agenzia per la rappresentanza negoziale delle pubbliche amministrazioni), the Agency for the representation in negotiations of the public administration; and

3. the definition of rules on trade union representativeness, in order to recognise union rights and bargaining rights

Further information on points (i) and (iii) can be found in IT9709311F. Here we focus on the reform of Aran.

The main tasks of Aran

Aran was created as part of the reform introduced in 1993 and acts as the representative of the public administration in collective bargaining. Representation by Aran is compulsory for the various individual administrations (eg ministries, the various levels of local government, schools, health and social security bodies) as regards national-level collective bargaining, but it is only optional in the case of decentralised negotiations, although legislative decree 29/93 provided that individual administrations were also obliged to comply with the Agency's directives at this level. Aran therefore exerted close control over the entire bargaining process within the public administration, acting under the supervision of the Presidency of the Council of Ministers (through the Civil Service Department), whose instructions it was obliged to implement during negotiations. Individual administrations - including local authorities which do not depend directly on central government - could intervene in the negotiations only to a very limited extent.

Main innovations

The main innovations introduced by legislative decree No. 396 concern both Aran's organisational structure and its tasks, and they are linked to a redefinition of the Agency's relationships with the public administrations that it represents.

The organisational structure of Aran is headed, as previously, by a board consisting of five members appointed by the President of the Council of Ministers. They remain in office for four years and may be reappointed. Of these five board members, three are now nominated by the President of the Council of Ministers, including - following consultation with the Joint State-Regions and State-Cities Conference (Conferenza unificata Stato-regioni e Stato-città), a consultative body which bring together government and representatives of local authorities - the president of the Agency. Of the other two members, one is nominated by the Conference of the Presidents of the Regions (Conferenza dei presidenti delle regioni) and the other by the Association of the Municipalities and Provinces (Associazione dei comuni e delle province) The innovation introduced by the decree is therefore a greater influence exerted by the various levels of local government on the appointment of the board members: in fact, not only do local authorities nominate two members of the board, they also participate in the designation of the president, who was previously elected within the board itself.

The decree grants to the Agency organisational and accounting autonomy, within the limits of its budget. It also increases the Agency's personnel (up to a maximum of 50 employees, including executives, as opposed to the previous 25) and authorises it to draw on a pool of 25 workers, up to executive level, made available by the public administrations represented, as well as using external experts and consultants, to the extent allowed by its budget. As for funding, the Agency is financed by contributions paid by individual public administrations, according to the number of their employees, and by the fees charged to the administrations that make use of the Agency's services in second-level decentralised bargaining activities.

As regards its competence, Aran is still the obligatory representative of public administrations in national collective bargaining, and at this level it undertakes all activities related to industrial relations on the basis of the "guidelines" received (see below). As for decentralised bargaining, administrations are still allowed to choose whether or not to use the Agency's services, through specific agreements.

An entirely new feature is the task now assigned to the Agency of providing the analysis, monitoring and documentation necessary for the proper conduct of collective bargaining. It must also file a three-monthly report on wage developments in the public administration. The decree also provides for the creation of a joint "observatory" to monitor the application of national-level agreements and of articulated (or complementary) bargaining. The staff of this observatory is appointed by Aran, the sector committees (see below) and trade unions which sign national collective agreements.

Relationships between Aran and public administrations

Another important innovation concerns the relationships between Aran and its "base" - the administrations which it represents. The aim of the decree, in fact, is to strengthen the influence of the various public administrations, so that Aran operates as a service structure for them. It is thus envisaged that the various administrations, via their associative structures, will exercise a "power of direction" over Aran as regards national collective bargaining, setting up sector committees for this purpose. A sector committee will be created for each sector of collective bargaining - health, local authorities, research, universities and non-economic public bodies (ie social security). However, as regards the ministries, schools and some public utilities (the fire service and a few others), it is the President of the Council of Ministers, through the Civil Service Ministry, who will act as the "sector committee".

Each committee, and the President of the Council of Ministers for the central state administrations, will set guidelines and objectives for collective bargaining as each agreement comes up for renewal, while Aran must keep them constantly informed on the progress of negotiations. Once a provisional agreement has been reached, the Agency must obtain the committees' approval of the draft before it is definitively signed. The law therefore provides that the sector committees must be expressly involved in the ratification of collective agreements, thus establishing a relationship with Aran which to a certain extent resembles the relationship between base/membership and bargaining agents in the private sector.

By contrast, under the previous provisions of legislative decree 29/93, the power of direction and intervention by the public administrations and local governments in the bargaining procedure was much more limited, since Aran was more closely constrained by the instructions issued by the Government.

Commentary

In the four years that followed the reform of 1993, Aran drew up a total of 32 national collective agreements: 16 four-year agreements for the period 1994-7 - that is, one each for the eight sectors among which the approximately 2.8 million public employees are divided, and eight for their 160,000 or so managers and executives; and the same number of two-year agreements for 1996-7, renewing the pay aspects of the national agreements. It is the general opinion that the attribution of exclusive negotiating competence to Aran has proved rather successful in curbing wage growth and the costs of bargaining - previously, direct participation in negotiations by the individual ministers concerned often meant that planned spending targets were exceeded.

However, the high degree of centralisation has on some occasions provoked tensions between Aran and the administrations that it represents, especially over agreements in local government (regions, provinces, municipalities) and the national health service. The present decree, besides specifying Aran's tasks and strengthening its structure, also aims to "specialise" the representation of the public administrations and to reinforce their influence (as regards local governments especially) over the Agency's activities, within the framework of a more general government programme of administrative decentralisation. This influence is exercised not only when the board and its president are appointed, but also by the assignment to the individual administrations - by creating the sector committees - of a more central role in negotiations than previously, and by reducing Aran's control over decentralised bargaining. All this should give rise to a greater differentiation of bargaining relations and outcomes which matches the conditions and requirements of the various administrations; a differentiation hitherto hampered by the overriding need to curb spending (Lorenzo Bordogna, University of Brescia).