New industrial relations system introduced at Ferrero

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In October 1998, trade unions and Ferrero, the Italian food-processing group, signed a major agreement which introduces new forms of participation, increases pay and fosters employment.

On 2 October 1998, an agreement was signed at the Ferrero group, Italy's largest food sector multinational, which is seen as an important breakthrough in industrial relations in the group - according to the unions, Ferrero has long based its relationship with its workers on a "paternalistic logic" which has left little space for trade union initiatives. The deal was signed by management, the national, regional and territorial bodies of the sectoral trade unions - Fat-Cisl,Flai-Cgil, Uila-Uil- and the company's "unitary trade union representative bodies" (Rappresentanza Sindacale Unitaria, Rsu).

The difficulties experienced in the food market, brought about by growing competition with products from countries with low production costs, and Ferrero's investments in the east, have engendered job instability in the company's Italian plants. This is why trade unions sought the negotiations, which turned out to be long and difficult but led to the new agreement. The hope is that the deal will allow the workforce to view the future with more confidence. The agreement provides for:

• the establishment of a "bipartite committee" (Comitato Bilaterale) composed of the company's top management and representatives of the national governing bodies of the three unions. The committee will examine in advance all the issues and the strategic choices faced by the group, in order to deal with changes in the economic context and their consequences on the company's production and work organisation;

• the establishment of "local bipartite bodies" (Gruppi di Progetto Locali) which will discuss employment conditions in individual plants (working time, working flexibility, part-time work etc) and of "local bipartite technical committees" (Commissioni tecniche bilaterali locali), responsible for defining productivity indicators for the purpose of calculating performance-related pay (Premio Legato ad Obiettivei, PLO);

• the development of a joint training programme that will be gradually extended to all the company's Italian plants to improve the industrial relations system, and which will involve both union representatives and managers;

• rules on the functioning of the company's Rsus and of their national coordinating body and on the paid time off required to act as a representative on these bodies;

• the recruitment of 150 workers on open-ended contracts. Also on employment, the deal clarifies that the number of fixed-term workers must not exceed an average of 20% of the total number of the company's workforce;

• a significant increase in performance-related pay. This portion of pay depends on two parameters: return on sales, which reflects the company's profitability; and "qualitative excellence" (Eccellenza Qualitativa), a combination of different production-quality indicators which will be defined by the local bipartite technical committees for each plant. The first indicator determines 70% of the performance-related payment and the second the remaining 30%. If objectives are achieved, the payment will amount to ITL 2.1 million per year;

• continuing vocational training initiatives paid by the company. The programme, aimed at developing multiskilled and multifunctional occupational competence, will involve 260 workers; and

• an exemption from night work for women with children under the age of three. This is significant, given the high proportion of women workers in Ferrero's Italian plants.

The secretaries general of the unions concerned expressed their satisfaction with the outcomes of the agreement which "confirms the industrial relations model provided for in the 1993 central tripartite agreement".