Agreement aims to adapt Italian banking to meet European competition

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An agreement concluded in the Italian banking sector in June 1997, with government mediation, provides for the creation of an employer-financed fund to support redundant workers, and for negotiations on cost reductions.

An agreement was concluded on 4 June 1997, aimed at allowing Italian banks to face up to competition from other countries, in the framework of the liberalisation of the sector decided by the European Community (for details on the background, see IT9704304F). The deal was reached with the mediation of the Government and signed by the Italian Banking Association, (Associazione bancaria italiana, ABI), bank workers' trade unions (Fisac-Cgil, Fiba-Cisl, Uib-Uil, Fabi and Falcri) and managers and executives' unions. It was described by the Labour Minister, Tiziano Treu, as "a historic agreement that will help to completely restructure the Italian banking system" (quoted in La Repubblica of 16 June 1997).

The agreement provides for gradual action to obtain "concrete results" in terms of a reduction of costs "to the average level of other European countries", as well as addressing the problem of redundancies in the sector - employers believe that the current banking workforce of 326,000 must be cut by between 30,000 and 45,000.

The new accord has launched a process of negotiations between trade unions and employers on cost reductions to improve competitiveness. The agreement sets out the guidelines for these negotiations which, in the first instance, will relate to the contents of collective bargaining. Both parties, confirming the two bargaining levels as laid out in the July 1993 central tripartite agreement on incomes policy, have agreed that:

• national collective bargaining has to provide for a substantial reduction in the weight of automatic pay increases, and that the future development of pay will be within the projected inflation rate and take into consideration the difficult situation of the sector; and
• company-level bargaining will have to link pay increases to "productivity and profitability indicators, taking into account the professional contribution of individual workers", with the objective of a gradual increase in the "variable elements" of the wage (ie, wage flexibility).

ABI and the trade unions have agreed to set up a national fund to finance support measures for the earnings of those workers who will be hit by the restructuring and to fund programmes of vocational retraining and continuous training. The support measures for earnings will be paid out by the fund "by means of financing, whose terms will be defined in subsequent negotiations". The distinctive feature of this fund to support redundant workers is that the costs will be met not by the public finances (as is the case in other sectors) but directly by the employers.

In order to protect employment, the document makes provisions on the use of solidarity contracts (or job-security agreement s) - with a reduction of working time accompanied by a proportional cut in pay - and part-time contracts.

The agreement also states that the privatisation of the banks should provide for an increase in employee shareholding.

The direct negotiations between the social partners should be concluded within 60 days and the Government was due to hold a follow-up meeting by 10 July. A second follow-up meeting on the progress of the sector's reorganisation will be organised by the Government in one year's time.