Future prospects for social concertation under discussion

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A February 2001 speech by Prime Minister Giuliano Amato, critical of the Confindustria employers' confederation, has sparked lively debate on the role of the Italian system of "social concertation" and dialogue and its future prospects. The discussion first concentrated on reforming the end-of-service allowance scheme, but it has now extended to other issues, notably transposition of the EU Directive on fixed-term work and the suitability of signing separate agreements when the parties fail to reach a common agreement.

At the beginning of February 2001, when winding up a round table on "social concertation" (social dialogue and consultation involving the social partners and the government), Prime Minister Giuliano Amato openly criticised Confindustria, the largest Italian employers' association, for having blocked talks on reforming the end-of-service allowance. This reform should have freed considerable financial resources (more than ITL 35,000 billion, according to some sources) and given substantial impetus to the development of supplementary pension funds (IT9909346F and IT9906119N). (The end-of-service allowance is a part of workers' pay which is put aside and paid in a lump sum at the end of the employment relationship.) According to the Prime Minister, the talks had broken down because of Confindustria's demand that any discussion on the end-of-service allowance should be combined with negotiations on labour flexibility. In Mr Amato's view, Confindustria wanted to "barter" the end-of-service allowance (which at present is a source of cash-flow for businesses, which pay it only when workers leave their employ) for greater labour flexibility. The president of Confindustria, Antonio D'Amato, who was present at the round table, rejected the Prime Minister's criticisms, arguing that the crisis of concertation is largely due to the Cgil trade union confederation's unwillingness to discuss labour flexibility.

The clash between the Prime Minister and Confindustria has sparked debate on the role of concertation and its future prospects.

The debate on concertation

The recent discussion of social concertation has centred on "signs of crisis" in the social dialogue. A first aspect is the difficulty of reaching agreements that has been evident in recent months. While this difficulty is generally recognised, starting from the negotiation over the end-of-service allowance reform, there are important differences as regards the reasons given for the recent "failures" of concertation. The government and the social partners mainly blame the problems on the "instrumental" and prejudicial stance taken by certain actors. They believe, albeit with differing emphases, that concertation is an essential component of the Italian industrial relations system and can make a major contribution to the solution of concrete problems: from incomes policy to support for growth and employment creation, and the definition of economic and social reforms. According to this point of view, it is the behaviour of the actors concerned that has caused the crisis of the concertation model, which itself continues to be valid.

The government and social partners, however, do not agree on attributing blame for the breakdown of concertation. As stated above, the Prime Minister has been critical of the position taken up by the employers, while Confindustria has accused Cgil. The unions have also differed in their opinions: while Cgil substantially agrees with the Prime Minister, Cisl and Uil have stated that, besides the demands of Confindustria, Cgil's allegedly intransigent attitude has impeded the reaching of agreements. In particular, Savino Pezzotta, general secretary of Cisl, has criticised the government for what he considers an excessive attention to Cgil's reservations about labour flexibility, to the extent that it has not even allowed effective talks on reforming the end-of-service allowance to begin, lest negotiations should break down traumatically. According to Mr Pezzotta, "if nothing is done out of fear of breakdown, someone has the right of veto. And that is wrong" (quoted in the il Sole 24 Ore newspaper, 3 February 2001).

Separate agreements mooted

The divergences between the social partners have been made even more apparent by developments in another (this time, bipartite) set of negotiations which has so far failed to come up with a solution. These talks between the social partners concern the drawing up of a joint statement on transposing EU Directive (1999/70/EC) on fixed-term work (EU9905170F) into Italian law. In the days following the start of debate on concertation, Confindustria argued that the impossibility of reaching an agreement was due to Cgil's refusal to accept any extension in the use of fixed-term contracts. Moreover, the employers' association expressed its readiness to reach a separate agreement with Cisl and Uil, which seemed to be willing to continue the talks and had taken a "softer" stance on relaxing the rules on fixed-term contracts. Cisl responded to Confindustria's proposal by accepting the possibility of separate agreements. Cgil harshly criticised Confindustria's step, maintaining that concluding separate agreements contradicts the logic of social concertation, and announced that it would have recourse to conflict, if this possibility were to turn into actual deals.

The debate has been joined by the minister of labour, Cesare Salvi, who has declared that any separate agreement which excludes any of the most representative trade union organisations could not be accepted by the government. Should any such agreement be reached, the government itself would draw up the legislation transposing the EU Directive, taking account of all the positions expressed, including those of parties excluded from the partial agreement. Moreover, according to Mr Salvi, the government cannot restrict itself to merely "rubber stamping" agreements; rather, it must ensure that these agreements are "fair". The minister's statements have been attacked by Confindustria, which has asked him to act impartially, without granting the right of veto to any particular trade union. Cisl, too, has criticised the minister's initiative, as it considers that it too closely reflects the position taken up by Cgil.

Some criticisms of Mr Salvi's statements have also been voiced within the government. The finance minister, Ottaviano Del Turco, a former Cgil confederal secretary, has argued that it is not possible to rule out the possibility of separate agreements. According to Mr Del Turco, proof that this is feasible is provided by the 1984 agreement on restricting the sliding-scale mechanism (scala mobile, an automatic wage-adjustment mechanism). On that occasion, Cgil was opposed to the proposal, but the agreement was considered as valid and was also backed by the majority of the population when a referendum was held on the issue.

More fundamental problems?

Various commentators maintain that the problems of concertation are due not to contingent factors, like the specific negotiating positions taken up by certain actors, but to the intrinsic inability of social dialogue to resolve issues other than incomes policy or economic recovery initiatives. In this view, concertation may be able to handle the allocation of the costs of adjustment or stabilisation, but is less suited to reaching agreement on the distribution of the benefits arising. Moreover, representation in social dialogue does not cover the entire range of interests concerned. For example, young people and workers in "new areas of employment" are little represented, and this would make it less likely that satisfactory agreements could be reached on reform of the pensions system or on labour flexibility. Finally, the complex structure and long time-frame of concertation is seen as unable to support the adaptability currently demanded by economic systems.

A further difficulty with concertation arises in precisely the area in which it has been most successful: incomes policy. At the beginning of February 2001, the inflation rate stood at just under 3%, due amongst other factors to large increases in the tariffs charged by public utilities. The trade unions and employers criticised the government, which they accused of not exerting sufficient control over the tariff rises. In general, an increase in inflation may undermine incomes policy, as shown by the current bargaining over renewal of the metalworking sectoral collective agreement: in this case, negotiations seem to be particularly difficult since the unions' wage claims are aimed at closing the gap between expected and real inflation, while the employers refuse this possibility.

Commentary

Interestingly, the two organisations that seem most distant from each other in negotiations, Confindustria and Cgil, have similar views on social dialogue, which they regard as a useful device which may yield positive and important results - but if no results are forthcoming, then the social partners must be free to take their own decisions and undertake the actions that they regard as most appropriate. This instrumental view of concertation is not shared by everyone, however. Cisl, for example, believes that concertation is more than just a method: it is, the union claims, "a policy for governing the country". In other words, for Cisl concertation is an essential component of a participatory system for managing the economy. At the same time, however, Cisl considers separate agreements to be viable, and therefore regards a "limited" form of concertation as legitimate. The government, too, has faltered in its ability to sustain concertation: as, for example, when it avoided the start-up of tripartite talks lest they break down, or when it imposed particularly stringent constraints on the parties (as in the case of transposition of the EU Directive on fixed-term work), without actively contributing to the search for common solutions.

One gains the impression from the positions taken by the parties that their commitment to the concertation policy is relatively weak. What matters to them most is obtaining results which reflect their positions and their objectives. To this end, they are willing to give up "a bit of concertation". This limited commitment to concertation seems to show that social dialogue has still not been entirely assimilated by the Italian industrial relations system, despite almost 10 years' experience of it and the achievement of numerous positive results.

On the other hand, it is obvious that if concertation is to work, it must produce results. Otherwise, it will be a complex and inconclusive structure, serving ritual purposes at most, with little rationale for existing. For concertation to work, however, the parties must consider it to be the principal source of regulation (at least as regards certain types of measures and issues). If instead only lip service is paid to "social dialogue", and it is believed that individual goals can be achieved more efficiently by different means - whether conflict or direct political intervention outside the relations among the parties - then concertation becomes difficult. The climate of the current general election campaign has favoured "political" interpretations of the debate on concertation, in relation to the positions of the two main coalitions of political parties. It is likely that we shall have to wait until after the elections due in April 2001 and the installation of the new government before relations between the social partners are stabilised and it becomes possible to envisage the role and forms that concertation may assume in Italy in years to come. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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