Government launches plans for reform of public sector employment

Italy’s Minister for Public Administration and Innovation presented his programme of reform for public sector employment in June 2008. The most important measures include the remuneration system and the fact that career advancement will depend on productivity rather than seniority. Furthermore, it will be possible to dismiss workers who pretend to be ill and who refuse to be transferred to another office. At the same time, managers will have greater disciplinary powers.

Employment in public sector

Italy’s public sector has 3,612,993 employees, some 113,356 of whom are on fixed-term employment contracts, while over 40,000 are temporary agency workers. The use of fixed-term work and temporary agency work is increasing in the country’s public sector. For example, the number of temporary agency contracts in the public sector increased by 8.8% between 2005 and 2006. Over 54% of public sector workers are women, the majority of whom work in education, where 76.6% of employees are female. Like the private sector, the number of female managers in public administration is very low, amounting to just 27% (2006 Annual Report of the State General Accounting Department (Conto annuale della Ragioneria Generale dello Stato)).

Public sector workers in Italy are considered a privileged category, despite the fact that their salaries are among the lowest in Europe. Their main advantage lies in their job security and the guarantee that they can exercise rights which in the private sector depend on the personal attitude of the employer or on market or production requirements.

A general opinion in Italy – and one which is rejected by the trade unions in the sector – is that many public sector employees can act with little regard for the administration and citizens through practices such as absenteeism and low work productivity; such employees do not risk the same swift and effective disciplinary measures as those adopted in the private sector.

The new Minister for Public Administration and Innovation, Renato Brunetta, is seeking to tackle such practices by producing a reform plan targeting public sector employment. The plan was launched on 4 June 2008 and has since been presented to the representative trade unions.

Proposed reforms

Performance-related pay

The pay of public sector employees consists of a fixed and variable component. The fixed pay component is established in the national collective agreement, while the variable pay component is linked to criteria defined in the second-level agreements for each division – such as tax agencies, autonomous state administrations, non-economic public bodies, school personnel and the various ministries (see also IT0611029Q). In recent years, however, the variable part of pay has been granted to all public sector employees, regardless of any criteria. As a result, Minister Brunetta wants to introduce strict criteria which are closely linked to individual employee performance. Quality of output will be an important criterion for variable pay and will have an effect on career advancement.

The proposed plan also envisages the introduction of a monitoring system for workloads in order to identify any excesses in personnel. Such workers will receive only the fixed part of their salary. Moreover, they will participate in retraining programmes and then be assigned to new functions within other areas. If the workers refuse the new allocation of tasks, they could be made redundant.

New disciplinary sanctions

The plan also proposes the introduction of disciplinary sanctions established by law, which cannot be modified through collective bargaining. Two of the criteria proposed for provoking dismissals are low work productivity levels and pretending to be ill. In the latter case, doctors who provide false medical notes and who are public service employees could also be dismissed.

At the same time, public sector managers would receive greater disciplinary powers and be responsible for the individual working efficiency of their employees.

Career advancement criteria

Under the new proposals, the career of public sector employees would predominantly depend on the internal job and evaluations. Until recently, career advancement was mainly linked to seniority.

Reorganisation of state bargaining agency

The plan also foresees the reorganisation of the State Bargaining Relations Agency (Agenzia per la rappresentanza negoziale delle pubbliche amministrazioni, Aran), whose role is to represent the public administration in the negotiation of national collective agreements.

Trade union opposition

The trade unions have criticised the proposed reforms. In particular, they have argued against the regulation of employment relationships. In fact, for more than 10 years, there has been a tendency – including in the public sector – to regulate salaries through collective bargaining. However, the minister’s proposal risks inverting this tendency and will introduce laws which regulate employment contracts in the public sector. According to the trade unions, this would reduce the efficacy and significance of collective bargaining.

The General Secretary of the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl), Raffaele Bonanni, has requested that the use of legislation be limited and that the ‘de-taxation’ of overtime – a provision which has recently been applied in the private sector – be extended to employees in the public sector.

Meanwhile, the General Secretary of the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), Guglielmo Epifani, also expressed his concern regarding the minister’s proposals. Moreover, he has criticised the proposal of the Minister of Economy and Finance, Giulio Tremonti, who, according to Mr Epifani, has advocated indiscriminate reductions of personnel in the public sector in order to reduce public spending.

Commentary

Despite the support of public opinion, the implementation of the reform programme for public sector employment is unlikely to be a straightforward process. In fact, relations between the government and trade unions are deteriorating rapidly due to difficulties in finding resources for the renewal of national collective agreements for the public sector. The discussion of the reform programme is likely to take place when the renewal of collective agreements is also set to be negotiated between the government and trade unions.

Vilma Rinolfi and Domenico Paparella, Cesos

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