Report assesses July 1993 tripartite agreement

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The study committee set up to assess Italy's major tripartite central agreement of 23 July 1993 - which covers incomes policy and collective bargaining structure - submitted its final report to the Government in December 1997, with some proposals for change.

In September 1997, the President of Italy's Council of Ministers appointed a "study committee" chaired by Gino Giugni, an expert on labour law and former Minister of Labour, to assess the incomes policy and collective bargaining structure introduced by the tripartite central agreement of 23 July 1993 and to propose possible modifications, in the light of its first four years of application (IT9709212F). The work of this committee is the first step towards assessment of the agreement by the social partners, as stipulated by the agreement itself. In writing its report, the committee drew on research and studies published on the 1993 agreement and on its effects, while also conducting a number of hearings with leading public and private research centres. Technical meetings were also held with the social partners.

The committee's report, which had to be presented by the end of 1997, was released on 23 December 1997. However, it did not appear on the social partners' agenda for some time, owing to the difficulties that the social concertation and dialogue process (and therefore also the revision of the July 1993 agreement) faced in connection with the 35-hour week debate - see below.

The July 1993 agreement and the committee's evaluation

The tripartite agreement of July 1993 contains three parts, relating to: a) the principles and contents of incomes policy; b) the bargaining system and company-level trade union representation; and c) labour market policies and policies to support industry. The task of the committee was to assess the implementation of the first two parts of the agreement.

By way of summary, the objectives set by the first two parts of the July 1993 agreement were to protect the purchasing power of wages through national-level "concertation" between the parties, and to decentralise the variable elements of wage bargaining, mainly to the company level but also to the territorial level. More specifically, the decentralised level of bargaining should have introduced a certain amount of wage flexibility linked to company productivity and performance. The coordination of the sectoral and the decentralised levels was to be ensured by the specific provisions of industry-wide agreements and by the creation of a single union representation body, the Rappresentanze sindacali unitarie(Rsu) (IT9709211F), as defined by the agreement.

In general, the committee concludes that the agreement has enabled, through the definition of a set of constraints and procedures, the achievement of important results in line with the objectives initially set. These outcomes are: curbing inflation and at the same time protecting the real incomes of households; improving public finances so that the criteria for membership of EU Economic and Monetary Union could be met; reviving firms' competitiveness; setting up the basis for an increase in investments and the improvement of employment levels. Moreover, the new bargaining structure introduced by the 1993 agreement has helped attain a low level of social conflict, laying the basis for a concertation-based and more participatory model of industrial relations.

The social partners have also expressed their satisfaction with the July 1993 agreement. They have declared their firm intention to maintain it, with the appropriate adjustments suggested by the experience of its first four years of application.

The committee's proposals

First, the committee declares that the Italian model of concertation should be vigorously sustained, stressing that social dialogue has also acquired an important role at the European Union level. The committee therefore proposes that the concertation method should be applied at the local level as well, both to accommodate the tendency towards the decentralisation of the bargaining system and to promote the formulation and implementation of labour policies and business support policies which are now increasingly taking place at the regional and local level.

Moreover, in the light of the positive results achieved by the incomes policy and the redefined bargaining structure, the committee proposes that the question of the 35-hour working week (IT9711216F) should be addressed through concertation, rather than legislation (as proposed by the Government), as this method would provide better guarantees regarding economic sustainability and the effects on employment of reduced working hours. The bargaining autonomy of the social partners would also be protected in this way. (On this specific issue, in late March at the time of writing, the Confindustria employers' confederation manifested its strong opposition to the choice made by the Government to present a draft bill on the reduction of the working week to 35 hours. If this draft bill is presented, Confindustria has threatened to withdraw from the July 1993 agreement - IT9803158N)

The most important changes to the 1993 agreement proposed by the committee are the following.

1. The greater decentralisation of bargaining and more specific functional specialisation of the two levels of bargaining. Industry-wide agreements should still be a decisive part of the bargaining system, but they could be scaled down quantitatively and qualitatively. The principal role of the industry-wide agreement could be that of defining minimum levels of regulation and of providing orientation for decentralised bargaining. By contrast, the decentralised level should acquire broader competence on matters such as organisational flexibility, working hours and pay, as far as its variable and performance-related elements are concerned. To encourage this decentralisation in areas where company-level bargaining is uncommon, for example in sectors and areas with a high density of small firms, alternative recourse could be made, without overlapping, to territorial bargaining.
2. In order to achieve positive effects in terms of employment creation and/or protection, an "opening clause" like those already tried out in Germany (DE9709229F) could be introduced. This clause would allow for company- and/or territorial-level exceptions to be made to the rules fixed at the national level. These exceptions would be subject to the consent and supervision of the organisations signing the sectoral agreements from which exemptions are sought, and they would in any case be temporary.
3. The respective roles of the different bargaining levels could be safeguarded by specific procedures for resolving demarcation disputes or overlaps that might arise in the course of collective bargaining.
4. In order to encourage participation and the creation of shared rules, incentives could be provided for the setting up of bilateral bodies which would furnish support and orientation for collective bargaining, and which could be called in to settle controversies over the contents of bargaining.
5. Changes in work and its increasing diversification, with a proliferation of arrangements midway between dependent employment and self-employment, seem to mark out new areas in which collective bargaining could be usefully applied. According to the committee, current debate on a new "Jobs Statute" (IT9709310F) could assign a leading role to the social partners, and this might be taken into account when revising the July 1993 agreement.
6. In order to consolidate the model of workers' representation introduced by the Rsu, concertation could promote the relevant legislative amendments. The aim of this reform should be to encourage the spread of the Rsu, maintaining links with trade unions outside companies in order to ensure coherence among the various bargaining levels. Moreover, the committee calls for the introduction of methods for measuring union representativeness. These might consist of two objective indices - the number of members and the votes obtained in the Rsu elections - following the model recently introduced by the reform of representation in the public administration (IT9711138N).
7. Finally, reform of workplace trade union representation, and the measurement of representativeness, could enable concertation to deal with the issue of the so-called erga omnes effectiveness of collective agreements (that is their applicability to all workers of a certain bargaining unit), at least as far as the sectors with the greatest fragmentation of bargaining and representation are concerned (for example, commerce and tourism). By this means, steps could be taken to deal with the problem of implementing European Union Directives on social matters by means of collective bargaining, as envisaged by the Maastricht and Amsterdam treaties.

Commentary

The first finding to emerge from the final report of the study committee set up to assess the tripartite agreement of 23 July 1993 is the growing importance of concertation between the social partners as the principal instrument of regulating employment. It is a particularly flexible and adaptable instrument which could be used to handle a variety of issues, such as the reduction of the working week, the definition of a Jobs Statute, the implementation of employment policies or the erga omneseffectiveness of collective agreements. It is also a method which encourages participation and the formulation of shared rules. For these reasons, concertation is an important "challenge". Its spread and the results that it is able to achieve will play a major role in determining whether a system of participatory industrial relations can be constructed.

As regards the changes proposed by the committee to the systems of bargaining and workers' representation, one notes a tendency towards increasing institutionalisation, within which, however, it is possible to widen the scope for flexibility bargained at decentralised levels. In this way, an institutional context is defined which may help to achieve the flexibility necessary for the competitiveness of Italy's economic system, while at the same time providing rules and procedures that may foster the low level of conflict indispensable for the success of concertation practices (Roberto Pedersini, Fondazione Regionale Pietro Seveso).