Social partners sign deal on irregular work

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In late July 2002, 36 Italian trade union and employers' organisations signed a joint opinion on measures to 'regularise' irregular work - ie employment which is not declared for tax and social security purposes and does not observe the pay and conditions laid down by sectoral collective agreements - and help firms emerge from the underground economy. The agreement, which will be implemented by the government, provides for important changes to existing procedures. The Cgil trade union confederation did not sign the joint opinion.

Clandestine and 'irregular' work in Italy makes up 27% of GDP. Over the years, various governments have made many efforts to try to deal with the problem. The present centre-right government has also introduced new measures to encourage the 'emergence' of companies from the underground economy, with legislation adopted in April 2002 introducing a three-year 'emergence' period, during which companies and workers involved in irregular work - ie employment which is not declared for tax and social security purposes and does not observe the pay and conditions laid down by sectoral collective agreements - benefit from tax and social security incentives as they regularise their situation (IT0205105F).

The measures taken by the government have not had the expected results and the trade unions asked the government to place the issue of irregular work on the agenda of the negotiations between the government and the social partners over the former's reform programme (IT0201277F). These talks culminated on 5 July 2002 (IT0207104F) with the signature of the 'Pact for Italy', covering: incomes policy and social cohesion; 'welfare to work' (including labour market matters); and investment and employment in the South of Italy. The General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil) did not sign the pact.

On 24 July 2002, 36 trade union and employers' organisations - again not including Cgil - signed a joint opinion on the regularisation of irregular work. The government has said that it will now make the necessary legislative changes to its recent law on this issue.

The joint opinion proposes the following:

  • the procedures for the progressive adaptation of the pay of irregular workers to the wage minima set out in sectoral collective agreements should be defined by collective bargaining. At present, these procedures are laid down by the Interministerial Economic and Planning Committee (Comitato Interministeriale per la Programmazione Economica, Cipe);
  • tax reductions should be enhanced for companies which have regularised their situation for three to five years without compromising the pension entitlements of the workers involved;
  • regularisation programmes should be extended to non-EU migrant workers;
  • the law should be extended to agricultural companies;
  • companies involved in emergence programmes should not be able to take part in tenders for public contracts;
  • companies taking part in tenders for public contracts should have to present a certificate showing that they have regularly paid their workers' social security contributions;
  • provincial 'committees for labour and emergence' (Comitato per il Lavoro e l’emersione dal Sommerso, Cles) should be set up to manage the new progressive emergence procedures. The committees should be composed of employers' and workers' representatives, plus representatives of the Ministries of Labour and the Environment, the National Institute for Social Insurance (Istituto Nazionale per la Previdenza Sociale, Inps), the National Institute for Industrial Accident Insurance (Istituto nazionale Assicurazione Infortuni sul Lavoro, Inail), local public health companies (Azienda Sanitaria Locale, Asl), municipalities and prefectures. The social partners should negotiate over the role and operation of the new committees;
  • joint bodies should be used to simplify local emergence programmes; and
  • the current deadline of 30 November 2002 for companies to present 'declarations of emergence' should be postponed.

Cgil participated in the negotiations but did not sign the agreement. Sergio Cofferati, its general secretary, stated that 'signing the agreement on the irregular economy is tantamount to providing political cover to the government. This is a mistake that Cgil decided not to make.' According to Mr Cofferati, the government is seeking, through the social partners, to hide the failure of the measures it has taken. According to Giuseppe Casadio, the Cgil confederal secretary responsible for the irregular work negotiations, 'the contents of the agreement cannot be put into practice, not even with the best will of the trade unions.'

According to Paolo Pirani, confederal secretary at the Union of Italian Workers (Unione Italiana Lavoratori, Uil), 'this agreement marks an important moment in the fight against irregular work, entrusting the social partners with important roles and responsibilities, starting from the role played by collective bargaining.' Raffaele Bonanni, the confederal secretary of the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacato Lavoratori, Cisl), believes that one of the most significant points of the agreement is that it entrusts the social partners and joint bodies with a key role in managing the emergence process, thus 're-establishing a role excluded by the previous legislation'. Moreover, the agreement redresses the situation whereby the government earlier acted unilaterally in this area, despite trade union opposition.

The Confindustria employers' confederation stated that it has confidence in the agreement's success. Guidalberto Guidi, the head of its industrial relations department, said that the agreement is a 'declaration of war against the new slave-drivers' who use irregular work.

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