Italy: Renewal of the collective agreement in the logistics sector to meet old and new challenges

In December 2017, social partners renewed the collective agreement for the Italian logistics sector, which had expired two years earlier. The agreement, after a period of unrest, addresses continuing developments in the sector, which are significantly reshaping sectoral business and employment features. However, enforcement needs on-the-ground monitoring activities, to be implemented by unions and inspectors.

Background

Recent market and technological changes have been reshaping the logistics sector in Italy, bringing both new opportunities and challenges. As in other European countries, the surge of e-commerce (on both a small and a large scale) is increasing the role logistics companies play in trade, resulting in the need for new logistics centres and warehouses from where goods can be delivered directly to consumers.

Trends and figures

Structural business statistics for 2008–2015 highlight that e-commerce activities:

  • increased turnover in logistics companies by 239%
  • posted growth of 50% in gross operating surplus
  • (almost) doubled employment

The warehouse and storage sector featured a mild growth in turnover (+6%) and a drop in employment (‑12%). Yet its gross operating surplus grew by 169%, with a stunning 1,137% increase among large companies (from €62 million gained by six large firms in 2008, to €772 million distributed among 11 companies in 2015). Similar trends, to be read also in the light of increasing work automation, are observed in the cargo-handling sector, although disaggregation by company size is not available.

At the same time, new forms of logistics activities ensuring just-in-time delivery through digital platforms, especially food delivery, have recently appeared in many large cities. These changes have had a detrimental impact on employment and industrial relations.

Recent cases

Unions at Amazon, the e-commerce giant, called for strike action in November 2017, demanding higher wages and better working conditions, as well as challenging the excessive use of temporary agency work.

Self-employed workers at food delivery company foodora went on strike at the end of 2016 against the company’s unilateral decision to adopt a delivery-based pay scheme (instead of hourly pay). As a result, their employment contracts were terminated by the company, the actions of which are currently being challenged in the labour courts.

These conflicts add to the longstanding problems of labour exploitation in the sector, often affecting migrant workers. This is especially the case for storage activities and for activities related to handling of goods, contracted out or subcontracted to bogus cooperatives, which apply lower pay levels than those envisaged by the National Collective Bargaining Agreements (NCBAs), or who do not pay appropriate wages or social security contributions. In recent months, one such case has been at the core of national debate following a strike and a hunger strike by workers dismissed by two bogus cooperatives at the meat production company Castelfrigo, in Emilia-Romagna.

In addition, the employer organisations of the road freight transport sector, which accounts for most of the freight transport in the country, say that competition from countries with lower labour costs, which takes place because of too-permissive cabotage policies and by misuse of the rules on posted workers, is undercutting Italian operators. Although the sector is growing (by 11% between 2008 and 2015), the number of companies shrank by 26%, with an 11% drop in employment.

The new collective bargaining agreement

Provisions ensuring wages and fair competition

On 3 December 2017, two years after its expiry, sectoral social partner organisations renewed the NCBA applying to logistics, freight transport and goods delivery activities, which covers around 700,000 employees and will remain in force until 31 December 2019. The agreement entails wage increases ranging between €82 and €138 per month (depending on the pay scale) and revises provisions on employment conditions with a view to tackling unfair competition. The parties also introduced stricter rules on the contracting of warehouse and storage, delivery and cargo-handling services.

The agreement introduces the obligation upon the contractor to certify its economic and financial solidity through:

  • a certificate released by a rating agency
  • a public certificate of compliance showing payment of social security contributions (Documento Unico di Regolarità Contributiva, DURC).

In addition, the agreement bans subcontracting in these activities, and states that the contractor must use its own production means and tools, thus introducing a criterion for contracting works akin to anti-fraud provisions envisaged by law until 2003 (Act No. 1369/60, replaced by Act No. 276/2003 – the Biagi Reform).

It also confirms previous rules obliging clients to terminate the contract should the contractor apply a different NCBA or fail to pay wages or social security contributions. In this case, the agreement states that the workers concerned would be rehired by the new contractor under the same employment terms and conditions.

Several measures incentivising open-ended contracts have also been adopted, allowing for temporary cuts in time off and cuts of up to 15% in the minimum wage for newly hired permanent staff:

  • drivers who have held a driving licence for less than three years, and are hired by road transport companies
  • workers aged over 29 years and hired by sectoral SMEs

Provisions addressing emerging challenges

The agreement aims to ensure that workers employed in the food and goods delivery sector (an occupation increasingly affected by the entrance of platform-based companies into the market) are covered by terms and conditions of employment set by the NCBA. In particular, the parties agreed to adapt the NCBA-based classification of occupations, as well as to establish rules on aspects of working time and wage levels for this category of workers by March 2018. The NCBA also allows for the use of on-call contracts in the sector – a type of employment contract allowing a high degree of flexibility in the amount and allocation of working time.

The provisions on working time of on-site workers have also been widely amended in order to meet new calls for flexibility. The new provisions remove Saturday work from decentralised bargaining negotiations, and open up to Sunday work up to a maximum of 25 working days per year (this threshold can be amended by means of a decentralised agreement).

Although working shifts are, as a rule, to be established on an annual basis, employers are allowed to adopt ‘flexible schedules’, modifying shifts for a maximum of four weeks, or to request that work is performed outside the standard working time within a four-month schedule. In these cases, workers must be notified in advance and be granted a special subsistence allowance.

Commentary

The new NCBA features interesting points on subcontracting in the logistics sector. Nevertheless, the enforcement of these rules needs on-the-ground monitoring activities, to be implemented by unions and inspectors. In addition, the enforcement may be hindered by the non-applicability of the agreement to employers affiliated with cooperatives’ associations, which left the bargaining table because they said the unions’ proposals were not suitable for their members. They also said the wage increases, eventually agreed by the other employer organisations, were too costly.

Enforcement problems also arise in relation to the attempt to cover platform-based workers. The application of the NCBA to these workers requires inspectors to sanction any misuse of self-employment contracts that occurs whenever the activity of food delivery workers is subject to the company’s decision power and work organisation, including working time.

Finally, temporary cuts in wages and time-off for newly hired workers in a sector already featuring low wage levels (€1,250 gross per month at the lowest pay scale) are worrying, as they risk increasing the number of the working poor to meet competitive pressures.

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