Committee appointed to assess the July 1993 tripartite agreement

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In September 1997, the Italian Prime Minister appointed a committee to assess the operation of the tripartite central agreement on incomes policy and the structure of collective bargaining, among other issues, signed in July 1993. This article reviews the agreement's contents and its implementation.

At the beginning of September 1997, a committee was appointed by the President of the Council of Ministers to prepare a report finalising the assessment by the Government and social partners of the July 1993 tripartite central agreement, as envisaged by the agreement itself. The chair of this committee is Professor Gino Giugni, who was Minister of Labour at the time when the agreement was reached.

Main contents of the July 1993 agreement and its implementation

About one year after the final abolition of the sliding-scale mechanism (scala mobile) for pay indexation covering all Italian employees, and the exit of the Italian Lira from the European Monetary System (in September 1992), the July 1993 central agreement between Government and social partners represented a far-reaching reform of the whole industrial relations system. The reform was at the time defined by Professor Giugni as "the new Constitution of labour".

The July 1993 accord contains four main chapters, relating to: incomes and employment policies; the structure of collective bargaining and workers' representation at company level; labour market policies; and policies meant to support the economic system. The third chapter met several delays and difficulties in implementation and was eventually the object of a new agreement in September 1996, the "Pact for Employment" (IT9702201F), and finally of law no. 196, passed in June 1997, which included a number of measures on labour market flexibility (including temporary agency work - IT9707308F). The implementation of the fourth chapter has been even more uncertain, so that the real core of the agreement may be found in the first two chapters, and especially in the second one.

Incomes policy

The agreement's first two chapters define a set of principles and rules to make collective bargaining processes and industrial relations compatible with the objectives of controlling inflation, improving public finances and achieving exchange rate stability, in the framework of European integration. For this purpose, two annual meetings of the social partners and Government were established in order to discuss incomes policy, but leaving intact the decision-making powers of the Government. The first meeting takes place in May-June and the second one in September, on the occasions of the main economic policy acts of the Government - that is, the presentation of the "Document for economic and financial planning" (Documento di programmazione economica e finanziaria) and of the Budget Law (Legge finanziaria). During these meetings, the social partners and Government, among other items, have to define planned inflation rates, which represent an essential reference for the ensuing bargaining activities, both in the public and private sector.

National sectoral bargaining

The collective bargaining structure is made up of two levels, a national one and a decentralised one, either at company or territorial level. At the first level, an industry-wide agreement (Contratto collettivo nazionale di lavoro, Ccnl) is negotiated. Its normative contents are valid for four years, while the wage and economic part is valid for only two years (the former duration of sectoral agreements was three years). The economic effects of the agreement, in accordance with the planned inflation rates, take into consideration the objective of protecting workers' purchasing power, general economic trends and the evolution of productivity and competitiveness in each industrial sector involved. At the time of the biennial renewal of the economic part of the agreement, any gap between planned and actual inflation is taken into account, in the light of the changes that have occurred in the meantime in national competitiveness, and of the course of wage increases. This particular point has caused some interpretation problems, leading to open conflict in the case of metalworking, over the question of whether the "inflation gap refund" should be automatic or not. If it were automatic, this would mean the restoration of a mechanism similar to the abolished scala mobile.

The July 1993 agreement also introduces specific procedures for presenting bargaining platforms, and establishes a restraint on industrial conflict lasting four months on the occasion of the agreement's renewal. It also stipulates that, in the event of long delays in renewing the Ccnl, a special compensation has to be paid to all workers.

Decentralised bargaining

Agreements at the second bargaining level have a four-year validity and must conform to the procedures, contents, and timing set in the relevant industry-wide agreement. They cover subjects and elements that are different from the wage elements defined by the industry-wide agreement. In particular, the tripartite agreement states that wage increases at decentralised level should be linked to programmes, agreed upon by employers and unions, for the improvement of company productivity, quality and competitiveness, as well as to the company's economic performance. Reality, however, has not always complied with this model.

Company-level representation

Finally, the reform of the bargaining structure has been accompanied by the reform of union representation at company level. This is entrusted to a single body, the Rappresentanze sindacali unitarie (Rsu) with a double function (bargaining and consultation/participation) and a double composition (two-thirds of members are elected by all workers and one-third are appointed by the trade unions that signed the Ccnl in force in the company). The bargaining function, for all topics assigned to this level by the industry-wide agreement, is granted to the Rsu and to territorial representatives of the unions that signed the Ccnl. In this way, besides the structural coordination of the two bargaining levels assured through the abovementioned "transfer" and "specialisation" clauses, a partial homogeneity of bargaining actors at national and company level is also granted.

Commentary

The importance of the July 1993 tripartite agreement is widely accepted. On one hand, with reference to macroeconomic results, its merits in lowering inflation and improving public finance, despite the strong devaluation of the Italian Lira and also the substantial protection of the purchasing power of wages, have been emphasised several times by political and economic authorities. On the other hand, the reforms of the bargaining structure and of union representation at company level have increased the institutionalisation of industrial relations, which is traditionally very weak in the Italian experience, with beneficial effects for the operation of the whole system.

This explains why the prevailing attitude among all interested actors - Government and social partners - seems to be rather cautious in considering deep modifications of the incomes policy and bargaining structures as defined by the July 1993 agreement. However, many scholars and practitioners emphasise the need for several adaptations, for instance in the relationship between the two bargaining levels, mainly in relation to wage elements (employers would prefer to simply abolish either of the two levels); or in the ways of refunding the gap between planned and actual inflation at the time of the biennial bargaining (even if such a gap might well be positive, given an inflation rate below 2%); or in increasing the participative and variable character of second-level bargaining over wage elements.

These adaptations are also suggested in the perspective of EU Economic and Monetary Union and its related "stability pact", which imposes new constraints on national economic policies and forces collective bargaining to take place more and more in "real terms" and no longer in nominal ones. (Lorenzo Bordogna, University of Brescia)