Confindustria proposes changes to bargaining structure

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In late July 2005, the executive committee of Confindustria, the major Italian employers’ association, and the presidents of its regional branches discussed a provisional document proposing reform of the collective bargaining structure established by the national tripartite agreement of 23 July 1993. The document - the definitive version of which will be submitted to the trade unions in September - reaffirms the validity and efficiency of the current two-tier bargaining system but emphasises a need to improve the mechanisms that guarantee compliance with the rules, in particular those on the right to strike and no-strike clauses. The proposals relaunches a dialogue between the social partners on the bargaining structure that broke down in 2004 when the unions failed to reach a consensus on the issue.

In July 2004, the representatives of Confindustria, Italy’s major employers’ association, and the 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) - held national-level talks to devise ways of concentrating resources on reviving the Italian economy (IT0408106N). On that occasion, Confindustria presented a document which, on the basis of a series of indicators, highlighted the current crisis of Italian manufacturing and emphasised the need to take measures to boost the country’s competitiveness and economic development. One of the proposals mooted by Confindustria was discussion with the unions of reform of the collective bargaining structure introduced by the national tripartite agreement of 23 July 1993. Amongst other points, the proposal envisaged a significant reduction in the number of industry-wide agreements and simplification of the articulation of territorial (ie at regional and lower levels) collective bargaining. However, Cgil announced that it was impossible to begin talks until a joint position on the issues had been agreed with the other trade union confederations, and thus effectively blocked any further discussion of the matter. In September 2004, Cgil, Cisl and Uil set up an interconfederal committee to draft a joint proposal on reform of the bargaining system. This initiative generated broader debate among the unions that delayed conclusion of the committee’s work (IT0412306F).

Since then, dialogue between Confindustria and Cgil, Cisl and Uil has nevertheless continued on other issues, and with significant outcomes, for example:

  • presentation to the government in November 2004 of a joint document - signed by the three trade union confederations and 13 employers’ associations - setting out proposals for relaunching the economy of the South of Italy (IT0411107F);
  • a June 2004 interconfederal agreement on the implementation in Italy of the EU framework agreement on telework concluded on 16 July 2002 (EU0207204F and IT0407205F); and
  • the signing in March 2005 (IT0505103N) - by Confindustria, Italian Banks Association (Associazione bancaria italiana, Abi), Italian Insurance Companies Association (Associazione nazionale fra le imprese assicuratrici, Ania), the General Confederation of Trade, Tourism, Services and SMEs (Confederazione generale italiana del commercio, del turismo, dei servizi e delle PMI, Confcommercio), the Italian Confederation of Local Public Services Companies (Confederazione delle imprese e degli enti che gestiscono servizi pubblici locali, Confservizi) and Cgil, Cisl and Uil - of a joint opinion on transposition of the EU Directive (2001/86/EC) on employee involvement accompanying the European Company Statute (EU0206202F). Through this agreement the social partners presented the legislators with their joint position on the text of a law to be enacted only after prior consultation with them.

New proposals put forward by Confindustria in July 2005 seems to have placed reform of the bargaining structure established by the agreement of 23 July 1993 once again at the centre of debate between the social partners.

Confindustria’s analysis of the economic situation

The document presented at a meeting of Confindustria’s executive committee and the presidents of its regional branches in late July 2005 began with analysis of certain statistics on the Italian economy:

  • between 1999 and 2004, the cost of labour per unit of output in Italian industry rose on average by 3.1% a year - an acceleration with respect to the previous five-year period ( 1.8% on average) and contrary to the current trend in the other main European countries. 'In the past 10 years, in fact, the cost of labour in Italy has risen by 21.2%, whilst in Germany it has remained unchanged, and in France it has decreased by 7%' (according to the document entitled Nota sulle relazioni industriali nell’anno trascorso ed in prospettiva presented at the meeting of Confindustria’s executive committee); and
  • in the past five years, real wages in Italy have increased by around 1.6%. In the same period, labour productivity in industry has fallen by 3%, 'whereas it has risen by 10% in Germany and by 13% in France' (compared with a increase in real wages of around 2.4% in both countries).

According to Confindustria, even if real wages have increased only slightly, the fall in productivity has increased the unit costs of labour and consequently reduced the competitive edge of Italian firms. This loss of effectiveness has mainly affected firms operating in sectors most exposed to international competition. If these firms are to compete effectively, Confindustria believes 'they must undertake a rapid and profound process of industrial restructuring and reorganisation'. The document then affirms that the industrial relations system must be able to support this radical change to the manufacturing system, in particular by:

  • assisting firms to devise strategies with which to respond rapidly to the changing circumstances of globalised markets, 'also through a more efficient organisation of work'; and
  • identifying new ways 'to link pay increases with greater productivity'.

Confindustria’s proposals on reform of bargaining structure

In September 2005, Confindustria intends to draw up a definitive document proposing reform of the bargaining system. However, it recognises that the structure introduced by the agreement of 23 July 1993 has ensured 'the correct development of industrial relations over the years and safeguarded the country’s general economic interests'. The provisional document emphasises the good results achieved in the past by the system, which is structured into two levels - national industry-wide bargaining and decentralised bargaining at company or local level - and its present and future validity in terms of its ability to institutionalise and regulate procedures and relations among numerous organised actors. Confindustria therefore does not propose a structural reform of the current bargaining system; rather, it wants to strengthen mechanisms 'that ensure compliance, at every level, with the rules established by the social partners'. In particular, Confindustria maintains that the system of rules should ensure that:

  • the parties to an agreement intervene, exercising their 'power of influence', to ensure that the conditions agreed are respected at company and local level; and
  • the trade unions 'do not undertake action or advance claims intended to alter or supplement the contents of agreements reached at the various levels of bargaining'.

Confindustria accordingly recommends the following:

  • the introduction 'of appropriate reconciliation and arbitration procedures, backed by sanctions, which are able to deal with cases of non-compliance with agreements reached';
  • revision of the rules on worker representation in workplaces;
  • extension of no-strike clauses, which now, according to the July 1993 tripartite accord, concern agreement renewals and have a four-month duration - three months before the expiration date of the agreement and one after; and
  • the definition of new rules on the announcement and holding of strikes, so that industrial action both in manufacturing and services 'becomes an instrument actually used sparingly'.

Reactions

The vice-president of Confindustria, Alberto Bombassei - who, at the Metalworking Employers’ Association (Federmeccanica) general assembly of 30 June 2005, had already proposed a 'constitutive pact' between the social partners covering all the main aspects of the rules on industrial relations - said that 'Confindustria wants the two bargaining levels to continue: A bargaining level which is equal for everyone, with a national level and a second level within the company'. Confindustria’s main aim in revising the agreement of 23 July 1993 is to 'reduce litigiousness: in fact, the constant climate of conflict between the social partners which characterises many production sectors deters investments. For the same reasons, the unthinking use of strike action, which is a right but should be used sensibly, ought to be deterred.'

Cgil, Cisl and Uil have reacted differently but equally cautiously. They have announced that they will wait until publication of the document before expressing a definitive opinion on Confindustria’s proposals. Cgil, however, according to its confederal secretary, Nicoletta Rocchi, welcomes Confindustria’s commitment 'to continuing with the two-tier bargaining system'. Cisl and Uil are rather more dubious about the employers’ proposals: 'Confindustria’s position', commented Paolo Pirani, confederal secretary of Uil, 'hampers identification of the appropriate changes to make to the bargaining structure defined by the 1993 agreement'. Giorgio Santini, confederal secretary of Cisl, has welcomed the fact that the document 'puts discussion of the bargaining system on the agenda'. At the same time, however, Mr Santini has expressed some disappointment that the document does not consider strengthening the second bargaining level, which according to Cisl should cover all workers: 'Cisl is not thinking about a third (territorial) bargaining level, but rather about ways to extend the second level to the majority of workers. Otherwise we risk applying it to only a 30% of companies which reach agreements.'

Commentary

The guidelines put forward by Confindustria, which will form the basis for a more detailed proposal on reform of the bargaining system established by the agreement of 23 July 1993, seem to rule out measures to redefine the relationships among bargaining levels - such as the greater role for decentralised bargaining advocated by Cisl. Instead, Confindustria is most concerned with specific issues like trade union representation in workplaces and exercise of the right to strike. The aim is to construct a system of industrial relations that provides incentives for, rather than obstructs, firms in their search for instruments - greater use of organisational flexibility, for example - that will increase their competitiveness.

For the time being, it can be noted that since the 10th anniversary of the agreement of July 1993 - and also previously with the conclusions of the 'Giugni commission' appointed by the Prodi government at the end of 1997 to examine possible revision of the 1993 agreement (IT9803223F) - discussion has continued on reform of the collective bargaining structure. It has produced proposals and counter-proposals and fostered relations between the social partners, but to date no concrete action has been taken. It is likely that Confindustria’s proposal will prompt a reaction by the unions, perhaps accelerating their search for a joint position on changes to the bargaining structure. However, it is equally likely that the outcome of (and the process leading up to) negotiations on the renewal of important national collective agreements - those ongoing for several months on the metalworkers’ agreement, which should resume in September, and those due to start in December on renewal of the collective agreements for workers in the textiles and chemicals sectors - will significantly condition the debate on the bargaining system. (Diego Coletto, Fondazione Regionale Pietro Seveso)

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