Labour relations in cooperatives: the working partner issue

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A long-running debate over the position of "working partners" in cooperatives - partners who also work in the organisation - has caused a dispute between Italian trade unions and cooperative associations, which came to a head when negotiations broke down in July 1997. We review the controversy and the issues involved.

The cooperative sector is an important element of the Italian economic system and employs a significant number of workers. Many of these workers are not employees, but "working partners" (soci-lavoratori), that is partners in the cooperative who also work within the cooperative itself. This is obviously true for workers' cooperatives and combined production and workers' cooperatives, which are particularly widespread in sectors such as building, and among the so-called "social cooperatives" (cooperative sociali) - those established with the purpose of offering care services or job opportunities to groups of people in disadvantageous situations, such as people with disabilities. As they combine some typical features of a partner of a commercial company (some sort of entrepreneurship) with those of employees (the fact of earning a wage), working partners are at the centre of an important controversy which opposes trade unions and cooperative associations. To simplify greatly, the question is whether the working partner should be considered more of a "partner", and therefore bear the risks of economic activity, or more of a "worker" and hence be fully protected by industry-wide collective agreements.

The cooperative sector in Italy

Cooperatives in Italy number many thousands and they operate in all sectors. The two major cooperative associations are the Lega delle cooperative- which comes from the cooperative movement of the socialist and communist tradition - with 10,600 member organisations, and Confcooperative- which belongs to the social catholic tradition - with 20,500 associated cooperatives. In order to appreciate the importance of the problem of working partners, we can say that within the Lega delle cooperative alone, there are about 6,000 workers' cooperatives with a turnover of some ITL 23,000 billion and more or less 160,000 working partners (data provided by Lega delle cooperative). Furthermore, there are some 4,000 social workers' cooperatives in Italy with some 120,000 partners (data provided by the Ministry of Labour).

The working partner issue

A dispute has recently broken out between trade unions and cooperative associations, which was followed by an attempt at mediation by the Minister of Labour. It originated when cooperative associations called into question some parts of the "Protocol on the new industrial relations model within the system of cooperative enterprises", an agreement signed by cooperative associations and the Cgil, Cisl and Uil unions in 1990, which was later included in the 23 July 1993 tripartite national central agreement. The protocol affirmed, among other items, the principle of the extension to working partners of industry-wide agreements' provisions on the total annual wage.

The dispute over the definition of "working partner", which has always been alive, was made more acute by a judgment of the Constitutional Court, which ruled in 1995 that for working partners, entrepreneurial traits override those typical of employed workers. The long-running controversy produced an important result in autumn 1996 when, in the tripartite Pact for Employment (IT9702201F), the Government committed itself to drafting a bill to find a new legal definition of working partner. Thereafter, bipartite negotiations continued and cooperative associations made a more open request for greater wage flexibility, asking for the possibility to decrease working partners' wages to 70% of the minimum wage rate set in industry-wide agreements, in cooperatives which were facing economic and financial problems. Trade unions firmly refused the cooperatives' point of view, stating once more that the minimum wage rate had to be guaranteed to working partners. The specific characteristics of working partners, in their opinion, could be taken into account at the second bargaining level, that is at company or territorial level.

The dispute between trade unions and cooperatives is not limited to wage issues, but also concerns representation. Trade unions are seeking the possibility to represent working partners through ordinary union activity and to establish works councils; cooperative associations reject such a viewpoint and stress that the representative bodies of working partners are the cooperatives' existing statutory bodies.

In mid-July 1997, negotiations broke down and the controversy became particularly intense following a declaration by the secretary general of Cgil, Sergio Cofferati, who firmly endorsed the extension of industry-wide agreements to working partners and their representation by trade unions, not least in order to avoid situations that, in his opinion, are sometimes close to forms of workforce exploitation. This point of view was immediately shared by Carlo Callieri, vice-president of the Confindustria employers' confederation, who argued that cooperatives, since they benefit from specific fiscal regulations, can often exert a sort of "unfair competition".

Following this exacerbation of the dispute, the Minister of Labour, Tiziano Treu, started a mediation exercise. At the same time, the president of the Lega delle cooperative, Ivano Barberini, asked the Government to implement its commitment to draft a bill on the redefinition of working partner status. Trade unions, on the contrary, expressed their opposition to a mere legislative solution, emphasising the need to reach a bargained solution.

Despite their agreement on the basic position, trade unions have different attitudes on the working partner issue: Cgil is the firmest in opposing the point of view of cooperative associations; Cisl has a more compromising attitude; while Uil has an intermediate position.

Commentary

The two opposing positions in the working partner debate are quite clear - the demand for wage flexibility on one side, the defence of minimum wage rates and the request for union representation on the other. Despite this, the working partner issue is complex and will be difficult to resolve. First of all, the great heterogeneity of the cooperative system makes it very hard to find a general answer. For instance, while wage reductions for working partners could find some sort of justification when they are aimed at employment creation in certain country areas or at disadvantaged groups of workers, the same cannot be true for a big building cooperative which employs hundreds and sometimes even thousands of working partners, and which is organised as an ordinary building company. This issue also raises difficulties for a legislative solution, which would most likely make too many generalisations among the different kinds of cooperatives.

The situation is further complicated by a sort of juridical "schizophrenia" on this issue. On one side, the Constitutional Court has affirmed that in the working partner the entrepreneurial aspects prevail. on the other side, the new June 1997 legislation on temporary work (IT9707308F) confirmed that there should be equivalent status for working partners and employed workers in terms of access to all fiscal and social contribution reductions, and to unemployment benefits and other public financial helps during company restructuring (the so-called ammortizzatori sociali). It will be possible to overcome this contradiction, which helps create occasions of conflict, only through a legislative redefinition of the working partner. However, this redefinition should leave substantial room for bargaining, in order to make it possible to reach solutions that can fit all the different needs and situations typical of the various sorts of cooperatives, in accordance with the prevailing character of enterprise, social cooperative or mutual association.

Finally, another interesting point of the dispute is the "division within the Left" or more generally the opposition between confederal unions and cooperatives - two worlds that, today as in the past, have many connections, not only cultural but also operative. In fact, trade unions promote many cooperative initiatives, mainly in relation to social cooperatives. The working partner dispute is another issue that helps understand the strength of the search for forms of flexibility, and particularly of wage flexibility, in Italy today. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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