Preliminary agreement for the renewal of national railworkers' contract

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On 7 May 1997, a preliminary agreement (which requires ratification) was signed for the renewal of the Italian national railworkers' contract. The new contract, which comes into effect from January 1997 and will expire on 31 December 1999, deals with company recovery plans and pay.

The May 1997 agreement was signed by management representatives of the Ferrovie dello Stato (Italian State Railways) and five trade unions: the three confederal transport workers' unions and the "autonomous" unions Fisafs-Cisal and Sma Confsal. It was not signed by the "autonomous" unions for engine-drivers (Comu) and station-masters (Ucs), which reaffirmed their opposition and confirmed that the strikes announced during negotiations would go ahead.

Background

The Italian State Railways is the largest company providing essential public services in the country. Highly labour-intensive, the railways have always been characterised by trade unions which, although strong and with deeply-rooted traditions, are segmented and competitive. The majority presence of the confederal unions (those affiliated to the three main confederations) has always been flanked by union s geared to the representation of sectoral demands. In addition, since the first reorganisation of the company in 1985 involving the "privatisation" of the employment relationship, there have arisen other radical forms of autonomous trade unionism (the so-called Cobas rank-and-file committees) organised on craft lines, with separate Cobas for engine-drivers, station-masters, on-train personnel, and so on. This has led to the proliferation of unions which, despite their small size, are able to disrupt services by calling sectoral strikes. The enactment of the 1990 law regulating strikes in essential public services has attenuated the most serious inconveniences to customers caused by uncontrolled "microconflicts", but the results are still not satisfactory. Moreover, the agreement between company and unions on the guaranteed provision of certain services in the case of industrial action, envisaged by the 1990 law, has still to be reached.

The dispersion of worker representation among so many organisations is a serious problem in a sector where the introduction of change without union consent has always been unthinkable. Previously, when the railways were a public monopoly, change came about via the regulation by law of the employment relationship. New models of regulation have emerged based on collective bargaining and the involvement of the unions in the management of change.

However, the difficulties in aggregating the demands of so many unions, on the one hand, and managerial resistance to change, on the other, have prevented full advantage being taken of this opportunity. The outcome has been an insufficient restructuring of the company, with the unions consenting to workforce "downsizing" in exchange for costly early retirement packages and pay increases for low-productivity work.

The contents of the agreement

The new agreement consists of two main parts, covering plans for corporate recovery and pay.

  1. The parties undertake to pursue a target of 11% growth in the volume of services delivered (expressed in units of traffic) by 2000. This increase in the volume of traffic should be matched by a 40% increase in earnings by 2000.
  2. The average pay rise envisaged is ITL 170,000 per month, of which ITL 100,000 will be paid from 1 July 1997 and the remaining ITL 70,000 from May 1998. Moreover, in June 1997 railway workers will receive a lump-sum payment of ITL 1,200,000 on average as compensation for the period without contract coverage, given that the previous contract expired 16 months ago.

Completely reliable figures on the impact of the new contract on labour costs have not yet been calculated. Savings on labour costs made possible by lower outlays on overtime, which will now be restricted, and by reorganisation of pay scales with a ceiling set on seniority increments, should be subtracted from the pay increases. Furthermore, a "time bank" will be set up to provide non-monetary remuneration for overtime in the form either of time off or other, as yet undefined, methods.

The senior management of the State Railways and the unions signing the agreement have expressed their satisfaction: the pay increases agreed are said to be in line with the incomes policy set out by the central tripartite accord of 1993, and with the corporate renewal plan to which the company is committed until 2000.

Commentary

The renewal of the railways contract has been long discussed and was preceded by frequent applications of pressure through industrial conflict. The agreement has aroused mixed reactions. Some economic observers (cited inIl Sole 24 Ore on 8 May 1997) view it as yet another "underhand" strategy designed to obtain social peace in a highly vulnerable sector before the beginning of the economically crucial tourist season, and as being bound to increase the Italian railways' deficit. By contrast, both the railways' new top management - recruited from private industry and currently engaged in a plan to relaunch the company - and the signatory unions are substantially positive in their verdict. Although with differing emphases, they have highlighted the balance achieved between pay increases (in line with the provisions of the 1993 tripartite accord) and greater flexibility in the use of labour and working time, which should help to curb costs. They also stress that relaunching the company is closely dependent on "co-responsibilisation" of the unions, not least through the definition of new rules safeguarding customer rights. According to numerous observers, however, this latter point relates to the difficult problem of introducing rules - presumably through legislation - which assess unions' representativeness and reinforce their reliability and responsibility. (Simonetta Carpo and Ida Regalia, IRES Lomabardia)

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