'Staff leasing' gets under way

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On the basis of a 2003 labour market reform law, a new contractual arrangement known as 'staff leasing'- both open-ended and fixed term - was introduced in Italy in August-September 2004. The new scheme replaces temporary agency work. In August, the largest temporary work agency associations applied to the Ministry of Labour for enrolment on a new register of staff leasing agencies, while in September the cabinet definitively approved the rules on staff leasing. The employers’ associations have welcomed the new system, while the Cgil trade union confederation is critical of it.

Less than a year since the adoption of legislative decree 276/03 on reform of the labour market (IT0307204F), all the statutory instruments implementing the legislation have been enacted, and collective bargaining has begun to address some of the innovations set out in the decree. One of the novelties introduced by decree 276/03 is 'staff leasing', a new contractual arrangement which entirely replaces temporary agency work. Amongst other changes, the reform law has introduced a register of staff leasing agencies on which both old temporary work agencies and newly-created companies can enrol. Companies enrolled on the register are authorised to furnish, besides staff leasing services, also private job placement, permanent placement and outplacement services.

Staff leasing

The decree provides for two types of staff leasing: open-ended and fixed-term. The former is the real innovation from the legal point of view, in that it allows labour to be leased on a permanent basis, without it therefore be necessary to specify the duration of the job (thus eliminating the typically short-term nature of temporary agency work). Fixed-term staff leasing is an arrangement similar to, but not the same as, temporary agency work, which has been abolished by the reform law and replaced by the new contractual forms.

The law specifies the cases in which open-ended staff leasing arrangements are permitted: information technology consultancy and assistance services; call-centre management; marketing and market research, commercial organisation, porterage and cleaning services; security, custody, catering and transport services; and management of libraries and museums. Further cases in which open-ended staff leasing is permissible may be determined by collective bargaining. Fixed-term staff leasing is instead permitted for technical reasons, or reasons to do with production and organisation, and to substitute for absent staff (but not workers on strike), not necessarily on a temporary basis but also for purposes related to the company’s ordinary activities. Company-level collective agreements will establish the specific circumstances in which labour can be leased, and the percentage of workers on leasing contracts that a company can have on its books. Moreover, decree 276/03 also stipulates that the provisions of the national-level sectoral agreements in effect when the reform law came into force (23 October 2003), which specify cases in which the use of temporary agency labour is permitted, will continue to apply until the agreements have expired. It will therefore be possible to use staff leasing arrangements in all cases where collective bargaining has permitted the use of temporary agency labour, until expiry of the relevant collective agreements.

Finally, as in the case of temporary agency workers, leased personnel will work under the same economic and 'normative' conditions (including trade union rights) as the user company’s employees with the same job ranking.

Leasing gets under way

It has been possible for companies to use leased workers since 2 August 2004, when the National Association of Temporary Labour Agencies (Associazione Nazionale delle Imprese di Fornitura di Lavoro Temporaneo, Ailt), the Associated Labour Agencies (Agenzie per il Lavoro Associate, Apla) and the Italian Confederation of Temporary Labour Agencies (Confederazione Italiana delle Associazioni delle Imprese Fornitrici di Lavoro Temporaneo, Confinterim) - the three largest associations of temporary labour agencies which together account for 95% of national turnover - applied to the Ministry of Labour for enrolment on the register and thus to be able to conclude fixed-term and open-ended staff leasing contracts. The date of 2 August was fixed by an informal agreement between the three associations, which only 90 days (in early November) after obtaining definitive authorisation from the ministry, will shed their former titles of 'temporary labour agency'.

After deliberation by the Labour Committees of the Chamber of Deputies and the Senate, on 3 September 2004 the amended text of legislative decree 276/2003 was definitively approved by the cabinet. The original text of the labour market reform law thus underwent a series of changes, some of which concerned staff leasing. Initially, annulment of the staff leasing contract and the consequent hiring of the worker concerned on an open-ended basis occurred in the following circumstances:

• absence of a contract in written form;

• failure to state the details of the ministerial authorisation issued to the staff leasing agency;

• failure to state the number of workers to be leased;

• failure to state the reasons for using open-ended and fixed-term leasing contracts;

• failure to state possible risks to the worker’s health and the preventive measures adopted; or

• failure to state the start date and duration of the contract.

Now, however, only the absence of a contract in written form leads to its annulment and therefore to the open-ended hiring by the user company of the worker concerned, while the other abovementioned conditions no longer apply.

Reactions

Temporary labour agencies view the introduction of staff leasing in Italy with great interest. The managing director of Manpower Italia, Jonas Prising, intends to 'develop staff leasing services for companies with projects of a certain duration', adding that 'the areas on which we intend to concentrate include outplacement and consultation'. Of the same opinion is the managing director of Adecco Italia, Carlo Scatturin, who says: 'Particularly interested are the larger companies, often multinationals, which have used instruments similar to staff leasing in other countries. However, companies are aware that the arrangement is rather complex and requires a relationship of close trust and collaboration with the leasing agency.'

On the trade union side, the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil) has been highly critical of both fixed-term and open-ended staff leasing. The former, it maintains, will discourage hirings and further increase job precariousness, at the expense of younger workers, while the latter is a retrograde step with respect to temporary agency work. In fact, whilst the latter was only possible in specific circumstances (for example, production peaks, coverage for absent personnel, or work concentrated in short periods), fixed-term leasing is allowed even for reasons to do with a company’s day-to-day activities. As regards the amendments made to legislative decree 276/03, Cgil claims that 'this only makes it more difficult to contest leasing contracts, because it reduces the grounds for doing so to just one case: non-existence of the written form.'

Commentary

The main feature of staff leasing is that it enables the user company to direct and control workers although it is not party to the employment relationship. There are no quantitative limitations on the use of such contracts, so that entire company departments could be staffed by workers on open-ended leasing contracts. Among the areas potentially most interested in staff leasing are call centres, which cannot convert former 'employer-coordinated freelances' into the 'project workers' allowed under the labour market reform law (IT0404303F) because they do not fulfil the criteria. However, companies that have resorted to outsourcing in the past are now interested in 're-internalising' certain jobs (store management, switchboard operation, cleaning, security etc).

In the case of open-ended leasing, the contractual relationship is only between the agency and the company, while the leasing agency may hire the workers to be supplied on all existing types of work contract, including those introduced by the reform law. This means that a user company can, fro example, subcontract its call centre to a staff leasing agency. The agency can then hire workers on open-ended contracts but also fixed-term. part-time, job-on-call, job-sharing and 'work-entry' contracts. For this reason it is important that collective bargaining should specify the circumstances in which open-ended and fixed-term staffing arrangements can be used. Some recently-renewed collective agreements, for instance in commerce (IT0407108F), chemicals and textiles (IT0405102N), have already fixed the criteria for use of work-entry contracts (on which an interconfederal agreement was signed in February 2004) as well as apprenticeship and part-time contracts. The task now for collective bargaining is to regulate staff leasing contracts, the use of which has only just begun, in that the relative legislation is only recent. (Livio Muratore, Ires Lombardia)