Draft agreement reached on conciliation and arbitration

Download article in original language : IT0006155FIT.DOC

In Italy, the resolution of individual labour disputes is generally submitted to the ordinary courts, and as a result the Italian legal system is overloaded with such disputes. This overload, along with the onerous terms for the workers involved and the excessive length of the procedure, have led the social partners and government to negotiate new dispute-resolution procedures - arbitration and conciliation - to reduce to a minimum recourse to the ordinary courts. In May 2000, a draft intersectoral agreement was reached but has not yet been signed due to differences over one controversial point concerning the possibility of challenging arbitration awards.

In Italy, the resolution of individual labour disputes is generally submitted to the ordinary legal system. Despite the existence of judges specialising in labour disputes and of special procedures, individual labour disputes are always lengthy and very expensive for both employers and employees. Italian courts are overloaded with labour disputes: there are more than 1 million pending suits - with 120,000 in Rome alone - and an average of 3,000 pending suits for each Italian magistrate. Some suits can also last for decades before the final ruling.

For these reasons – the onerous terms for the workers involved, the excessive length of disputes and the overload of the administrative justice system – the social partners and the government have negotiated various new ways to resolve labour disputes in order to reduce to the minimum the recourse to ordinary justice. Legislative decrees 80 of March 1998 (IT9812239F) and 387 of October 1998 (which integrates the first decree), introduced into the Italian legal system two out-of-court dispute-resolution tools: conciliation (concilizione) and arbitration (arbitrato). Conciliation involves seeking an agreement between the parties – employer and employee – which resolves a dispute between them, while arbitration concerns the referral of the dispute to one or more impartial third parties, if conciliation fails.

The two 1998 decrees have regulated and made compulsory recourse to conciliation in labour disputes: only in the event of a failure of conciliation can the dispute be submitted to judgment by the courts. Arbitration can be used as an alternative dispute-resolution mechanism to going to court, and therefore both parties may agree to submit the dispute to arbitration. According to Italian law, it is not possible to oblige somebody to renounce the exercise of their rights in court. The decrees provide that a case may be referred to arbitration rather than going to court only if the parties agree and if this alternative is envisaged by the national collective agreement which applies to them.

Following the adoption of the decrees, sector by sector negotiations over the inclusion of dispute-resolution provisions in collective agreements could have led to fragmented or even contradictory solutions, Thus, in autumn 1998, two parallel sets of intersectoral negotiations on conciliation and arbitration started between the Cgil, Cisl and Uil trade union confederations on one side and Aran (representing public sector employers) and Confindustria (private sector employers) on the other.

Draft intersectoral agreement

In May 2000, an important draft agreement regulating labour dispute-resolution mechanisms, as an alternative to recourse to the ordinary courts, was reached by Cgil, Cisl, Uil and Confindustria. The draft agreement provides for both conciliation and arbitration procedures.

Conciliation

Under the terms of the draft accord, it would compulsory to seek conciliation before going to court or submitting a labour dispute to arbitration. Attempts to conciliate would be made by a social partners' conciliation office (Ufficio sindacale di conciliazione) composed of a representative of a trade union mandated by the worker (or the workers in case of a collective dispute) and of a representative of a local employers' organisation mandated by the company.

A written request by the person involved addressed to the office would be necessary for the referral of the dispute to conciliation. A copy of the request should be sent to the other party. The request starting the conciliation procedure would indicate the parties involved and the aim of the dispute and give a detailed explanation of the facts, followed by the relevant documentation, the address of the person filing the request and the name of his or her representative.

Within 30 days of receipt of the request, the parties would meet to address the dispute. Experts belonging to the respective organisations would be able to attend the meeting. Attempts to reach conciliation could involve several meetings, but should end within 60 days. There would be no constraints on the conciliators' attempts to resolve the dispute and they could suggest any solutions they believed appropriate.

If the result of the procedure turned out to be positive, even partially, the outcome would be recorded and the decisions taken would become compulsory for both parties.

Arbitration

If no conciliation were reached, there would two other ways of resolving the dispute: recourse either to the courts or to arbitration.

In the latter case, the dispute would be submitted to an arbitration board (Collegio Arbitrale) composed of a representative of a trade union mandated by the worker (or workers), a representative of a local employers' organisation chosen by the company and a chair chosen by both parties. If no agreement were reached as regards the designation of the chair of the board, he or she would be chosen from a provincial list containing the names of 10 experts on the subject. The list would be prepared every two years by local trade unions and employers' organisations.

In order to start the arbitration procedure, the worker(s), through the trade union organisation assisting him or her, would send a written request to the secretariat of the arbitration board and to the other party. The worker should confirm or declare void this request within 15 days. This means than, within 15 days from the receipt of the request, it would have to be confirmed or it would be considered void.

During its first meeting, the arbitration board would decide how its inquiry would be carried out. The board would be able to hear both the parties, which could be assisted by their representative organisations or by experts, and other witnesses. The Board would also be able to fix the final terms for the submission of documentation or of the replies of the parties.

The Board's award (lodo) would be issued within 60 days of the receipt of the written confirmation of the worker's request to proceed with the case. The award would be issued by a majority of the board, would be recorded and would be binding on both parties. The award could be challenged by the parties before a competent court only on the grounds of error, violence, fraud or non-compliance with the regulations provided for by law.

Agreement not yet signed

The parties were due to sign the agreement on 24 May 2000. However, differences over the very delicate issue of challenging arbitration awards in the courts prevented this. Trade unions wanted to include among the grounds for challenging the award its non-compliance with the provisions of the relevant national collective agreement on the subject at the basis of the dispute. Confindustria did not agree. Cisl and Uil, taking into account the fact that the agreement is experimental and that it would be reviewed after a year, said that they were willing to sign the agreement on the new procedures. Cgil, on the contrary, after holding an internal meeting to discuss the problem, decided to continue the negotiations in an attempt to overcome the last obstacles. After their initial diverging position, the trade union confederations now seem willing to take a common position to reach an agreement in the near future.

Commentary

Although conciliation and arbitration procedures are part of the Italian industrial relations system, usually based on collective bargaining, until recently they were used only infrequently. Their introduction into legislation through the 1998 decrees has not changed very much the attitudes of social partners, which tend to resolve individual and collective labour disputes by resorting to the magistrate's court or through recourse to an industrial dispute. If the new agreement is signed, it will bring major innovations to labour dispute-resolution mechanisms, especially in the area of arbitration.

The solutions adopted so far in the draft agreement take into account many elements suggested by the trade unions, such as: the fact that recourse is voluntary; the possibility of contesting the arbitration award; and the recording of the parties' positions during the conciliation meeting even if no conciliation is reached.

If the problem raised at the end of the negotiations is overcome, Italian individual and collective dispute-resolution mechanisms will be enriched with procedures which have already proved to be very effective in other European countries. However, an important gap in the solutions found is the fact that arbitration is not made compulsory for public service sector disputes. This, as many independent commentators have highlighted, could have provided a useful tool for reducing the endemic labour unrest in many public services (IT0004266F), fueled by small trade unions which use industrial disputes for narrow occupational objectives, damaging service users and the image of trade unions.

The outcome of the negotiations can be considered as the first test for the Confindustria's newly elected president, Antonio D'Amato (IT0003148N). Beyond its initial polemic, Confindustria's new top management team must decide whether to create sound negotiating relations with the trade unions or to resume the previous approach to industrial relations, whereby conflictual elements outnumbered the more cooperative approach which has been followed during the past 10 years. So far, Confindustria's position - which seems more to entrust the government and the political parties to take initiatives to promote companies' interests - and the divisions within the trade union movement, along with developments on the political scene, make many observers believe that the possible future scenario will be more conflictual than in recent years. (Domenico Paparella, CESOS)