Agreement reached on Telecom Italia's industrial plan

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In May 2002, an important agreement was reached by company management and trade unions on the Telecom Italia group's 2002-4 industrial plan. The deal covers key issues, such as employment levels and a new mix of occupations and skills in the group - to be accomplished through a combination of departures and new recruitment - guidelines for investments and development, and continuing education and training policies. The agreement also confirms the participatory system of industrial relations introduced in the group in 2000.

On 27 May 2002, an important agreement was reached on the Telecom Italia telecommunications group's 2002-4 industrial plan. The deal was signed by company management and the three main trade union confederations - the General Confederation of Italian Workers (Confederazione generale italiana del lavoro, Cgil), the Italian Confederation of Workers' Unions (Confederazione italiana sindacati lavoratori, Cisl) and the Union of Italian Workers (Unione italiana del lavoro, Uil) - as well as their respective sectoral federations - the Communication Workers' Union (Sindacato lavoratori comunicazione, Slc), the Federation of Entertainment, Information and Telecommunication (Federazione dello spettacolo, dell'informazione e delle telecomunicazioni, Fistel) and the Union of Italian Communication Workers (Unione italiana lavoratori comunicazione, Uilcom).

Negotiations had led to a preliminary agreement on 15 May 2002, but the final agreement was signed only after consultation with the group companies' workplace union representation bodies (Rappresentanze sindacali unitarie, Rsus), which gave the unions' national bargaining delegation a mandate to sign the deal.

The accord covers important issues, such as: new employment levels and a new 'professional balance' of occupations and skills, which should be accomplished through a combination of departures and new recruitment; guidelines for investments and development; and continuing education and training policies.

The agreement recognises the development and reskilling of human resources as important means to achieve the strategic goals set out in the industrial plan and to assure the group's future growth. Significantly, the introductory chapter to the agreement refers to the telecommunications sectoral agreement of 28 June 2000 (IT0007158F) and stresses that the full exploitation of the potential of this industry-wide agreement (the first since the liberalisation of the sector and the entry of new operators) is linked to:

  • the establishment of a sectoral employers' association. Such a body does not exist at the moment, though there are a number of trade associations without bargaining functions, such as the Federation of Communication and Information Technology Firms (Federazione delle imprese delle comunicazioni e dell'informatica, Federcomin) and the National Association of Technology and Service Firms for Information and Communication (Assinform);
  • the transformation of the Telemaco supplementary social security scheme, set up in 1998 for public sector telecommunications firms represented by Intersind, into a proper sectoral fund;
  • the activation of the joint committees on training and job classification envisaged by the June 2000 sectoral agreement; and
  • the definition of rules for the exercise of the right to strike in the sector and for conciliation and arbitration in labour disputes.

Telecom Italia

The Telecom Italia group is the largest fixed-network and mobile phone operator in Italy, with a significant presence on international markets, and it also holds a prominent position in internet services. Furthermore, it has a significant stake in the media sector, as it owns the national television network La7.

Telecom Italia was, before the liberalisation of the Italian telecommunications sector, the country's only fixed-network operator. After full privatisation in 1997 (the Treasury kept only a residual participation, which is connected to a 'golden share'), Telecom Italia has been taken over twice. First, there was a hostile takeover by Olivetti-Tecnost in June 1999; second, there was the 'friendly acquisition' by the Pirelli group, which became, together with Benetton, the majority shareholder in summer 2001, through the acquisition of Olivetti Spa. In 2001, Telecom Italia group had a turnover of EUR 30.8 billion and employed some 110,000 people at the end of the year.

The agreement

The May 2002 agreement outlines, in its introductory chapter, the main elements of the industrial plan of the Telecom Italia group for the years 2002-4 and states the principal strategies that will characterise its various business areas ('domestic wireline', mobile, information technology - 'intra-group' and 'external market'- internet and media). The deal seeks to foster a new phase of growth for the Telecom Italia group, to be achieved through financial restructuring, redesign of the organisational structure, rationalisation of its industrial activities (through the sale of some subsidiaries and the implementation of some forms of integration with the Pirelli group), and the reorganisation of the group's core business, in order to guarantee a proper return on investment and an effective control of operating costs. In particular, the objective of the industrial plan is to realise an efficiency gain through cost reductions of at least EUR 2 billion in the next three years.

To support the group's reorganisation, the industrial plan envisages investments of EUR 16 billion in the years 2002-4, which will mainly be targeted at strengthening fixed-network services (EUR 7 billion) and mobile services (EUR 7 billion). Telecom Italia has committed itself to making a significant share of these investments in the South of Italy, or Mezzogiorno (26% of total investments in 2002), with a view to developing network infrastructures and supporting the creation of new jobs. Investments in the Mezzogiorno will be discussed by the parties to the agreement in a joint 'observatory on the Mezzogiorno and local areas', established by an agreement on industrial relations in the Telecom Italia group signed on 28 March 2000.

Industrial relations

As far as industrial relations are concerned, and notably measures which will support the attainment of the industrial plan's goals, the main points of the agreement are as follows.

  1. The participatory system of industrial relations introduced by the March 2000 agreement has been confirmed. Supervision and periodical assessment of the implementation of the industrial plan will be carried out by the 'strategic forum', a joint committee made of 12 company representatives and 12 trade union representatives, which was introduced by the March 2000 accord. The strategic forum will meet every six months, starting from November 2002. It will analyse the Telecom Italia group's international strategies, as well as the progress of industrial strategies, reorganisation, operational plans and investments in the various business areas. At the demand of one of the parties, special sessions of the forum will be held to examine restructuring initiatives which involve specific subsidiaries or business units. Moreover, the strategic forum will discuss the issue of employee share-ownership and monitor the development of Italian and EU legislation on this matter. Owing to the sensitivity of the information dealt with within the strategic forum, members are required to respect a confidentiality clause, as provided for by the March 2000 agreement.
  2. Within the group's individual companies and business units, in the framework of reorganisation processes, consultation procedures will be organised, at the demand of one of the parties, on: work organisation; the criteria used in managing human resources; training and reskilling; collective geographical redeployment of workers; and working time systems. The relevant consultation rules and procedures will be defined in each company and business unit, including the time span during which the parties are prevented from taking any unilateral action on the topics under joint discussion.
  3. The redefinition of employment levels and the new 'professional balance' will be achieved through intra-group mobility, the use of voluntary departures (through a 'mobility procedure'- see below) and a series of new 'targeted' recruitments.
  4. The 'tertiarisation' (ie using subcontractors to perform activities previously performed in-house) and outsourcing initiatives which will be taken to attain the industrial plan's goals will be analysed jointly and common solutions will be pursued. In particular, Telecom Italia commits itself to start prior consultations with the unions which signed the agreement to examine the criteria used to support outsourcing decisions, and also to discuss the related issues concerning human resources, collective bargaining, social security coverage and union representation. Furthermore, in the event of tertiarisation processes, Telecom Italia pledges to seek an agreement with the prospective subcontractor, with a view to avoiding collective redundancies, within a set period of time.

The new 'employment equilibrium'

The redefinition of the Telecom Italia group's employment levels and the rebalancing of its occupational and skills mix will be achieved through the use of a series of measures, thereby avoiding structural redundancies in the 2002-4 period. The measures to be used are as follows.

  • Mobility between occupations and between companies within the group will be supported by a widespread process of reskilling and vocational training, carried out along guidelines defined by the training commission, another joint committee envisaged by the March 2000 agreement, due to be set up by June 2002. The training initiatives will be designed on the basis of competence assessments of the workers involved and will be implemented in different ways - on the job, through in-house courses, and on-line. If reorganisation processes involve geographical redeployment, a preliminary consultation on such mobility will take place, with a view to identifying solutions aimed at reducing the burdens on the workers involved, including by using new forms of work, such as telework, part-time work and job-sharing.
  • A 'mobility procedure'- a tool for managing redundancies which provides an 'income-integration allowance' to the workers involved (IT9802319F) - will be used for employees who agree to it. The main criterion for identifying workers to be involved in the mobility procedure will be that they are due to become entitled to a pension during the period covered by the mobility allowance (a maximum of three years - or four years in the South). The workers who accept entering the mobility procedure will receive an economic incentive.
  • At least 2,300 new employees will be recruited over three years. Recruitment will occur mainly in the Mezzogiorno, and will involve especially young people with secondary-level or university education looking for their first job. This recruitment will also contribute to a progressive reduction of the amount of 'atypical' work within the group and, in certain cases, will lead to the transformation of former freelance 'coordinated' contracts (IT0011273F) into work/training contract s or other forms of dependent employment. Whenever possible, the new recruitment will take place through apprenticeships or work/training contracts.

Other issues

Other interesting features of the agreement include the following:

  • a 'census' will be conducted of the atypical forms of employment used in Telecom Italia group. This survey will be carried out in the framework of the joint 'observatory on the development of labour legislation' set up by the March 2000 agreement;
  • consultations may be held in the individual subsidiaries of the group on the use of temporary agency work and freelance 'coordinated' work. In particular, as far as freelance 'coordinated' work is concerned, the issues of workplace health and safety, vocational training, job security and contractual protections will be addressed; and
  • consultations may be held in the individual companies and business units aimed at introducing, strengthening and developing the use of telework, part-time work and job-sharing, recognising the contribution of these forms of employment to the reconciliation of the company's efficiency and workers' personal and social needs.

Trade union evaluations

The unions which signed the May 2002 agreement expressed their satisfaction with both the negotiating methods and the contents of the deal. According to the unions, the main positive elements of the agreement are:

  • the substantial involvement of the national bargaining delegation and of the Rsus throughout the negotiations, as well as the confirmation of Telecom Italia's participatory industrial relations system;
  • the inclusion of industrial strategies and development decisions in the topics for negotiation, during a critical phase for the group;
  • the fact that structural redundancies have explicitly been ruled out;
  • the crucial role assigned to training;
  • the quantity and quality of the new employment agreed, as well as the commitment to reduce atypical work; and
  • the confirmation of an advanced system of protection for workers, which includes the voluntary nature of the measures to be used to achieve the new employment levels and occupational balance.

Commentary

The agreement on Telecom Italia's 2002-4 industrial plan has a number of interesting features, both for the group and for the telecommunication sector as a whole.

As far as the Telecom Italia group is concerned, the confirmation of the participatory system of industrial relations, introduced by the agreement signed with the group's former management in March 2000, is highly important. This was not merely a confirmation in principle, as the new agreement on the industrial plan itself represented an important occasion to apply and relaunch this participatory system. Moreover, the consultation procedure with the Rsus (the company-level representation bodies) before the final conclusion of the agreement, which was adopted by the unions on this occasion, is in many respects a novelty, broadening and extending the involvement of union representatives by significantly involving company-level structures. The agreement represents a step forward in efforts to institutionalise the relationship between the Telecom Italia management and the unions, not only relating to the application of agreements, but also on themes which are strategic and crucial for the company's performance. In this area, of particular note is the introduction of new procedures to regulate industrial relations matters, by establishing a right to demand consultation on specific topics, with the parties prevented from taking any unilateral initiatives on the matters which are being discussed for a certain period of time.

For the telecommunication sectors as a whole, the Telecom Italia agreement's acknowledgement of the importance of the bargaining unit defined by the industry-wide agreement of June 2000 appears to be a significant move to strengthen the regulatory capacity of the sectoral agreement and overcome the fragmentation of bargaining which still exists in the sector. As the signatories to the Telecom Italia agreement have stressed, the establishment of a sectoral employers' association will represent an essential step in this direction. Despite a long debate on this issue, significant advances have apparently not yet taken place. Apart from company-level support, as in the case of Telecom Italia, a specific commitment by the Confindustria employers' confederation could provide the decisive impetus to create a telecommunications employers' organisation, which would be an important innovation in the structure of employers' representation. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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