Latest developments in 'semi-subordinate' and 'employer-coordinated freelance' work

Download article in original language : IT0308304FIT.DOC

In recent years, 'atypical' work – and particularly 'semi-subordinate' work (midway between dependent employment and self-employment) – has played a key role in employment growth in Italy, accounting for more than 40% of new jobs created. The most important of the non-dependent atypical forms of work is 'employer-coordinated freelance' work. Unlike temporary work, this form of employment relationship has continued to increase, at an average growth rate of 12% per year, and now involves almost 2.4 million workers. This increase has been matched by a substantial growth, in both quantitative and qualitative terms, of collective bargaining covering such workers, which has led to important agreements being reached not only at the company and territorial level but also at the sectoral and national levels. This article examines the situation in mid-2003.

'Atypical' work accounts for an increasingly large proportion of employment in Italy - see the table below. Since the beginning of 2002, the number of people working on 'atypical' contracts has continued to increase at a rate which – although lower than at the end of the 1990s – is still higher than for standard employment. These are among the findings of a report (Terzo Rapporto sul Lavoro Atipico) published by the Istituto di Ricerche Economiche e Sociali (Ires) in April 2003, which draws on (quarterly) Central Statistics Office (Istituto Centrale di Statistica, Istat) data on the composition of the labour force.

The Ires report indicates that in the year from January 2002 to January 2003, 43% of the new jobs created were 'atypical' positions, while the remaining 57% were 'standard' ones. In 2002, 'atypical' employment represented 20.4% of total employment. More specifically, workers on fixed-term contracts accounted for 7.2% of total employment (5.8% for men and 9.4% for women), while part-timers made up 8.6% (3.5% for men and 9.4% for women). As regards temporary agency workers, it is difficult to quantify their numbers with precision, because the temporary work 'missions' which occur in a year do not correspond to the number of workers involved (an agency worker may undertake several missions a year). In order to take account of this, the figures on missions carried out by temporary agency workers are expressed as equivalent full-time jobs. The Ministry of Labour has estimated that in 2001 (up until the end of November) temporary agency work represented 74,629 full-time jobs, with an effective total of around 117,000 temporary agency workers (although unofficial sources put the figures much higher). Therefore, despite sustained growth over the past few years, the share of total employment made up by temporary agency work is still rather low - the 75,000 jobs in 2001 accounted for 0.3% of total employment and for 4.7% fixed-term employment.

Employer-coordinated freelance work

Fixed-term, part-time and temporary agency work are not the only forms of 'atypical' work in Italy. Of particular importance is 'semi-subordinate' work (midway between dependent employment and self-employment) and, most importantly, 'employer-coordinated freelance work' (collaborazioni coordinate e continuative) (IT0011273F) - otherwise known as 'economically dependent' work (TN0205101S) - which between 1999 and 2002 increased at an average rate of 12.5% a year (equivalent to 200,000 more workers every year). In 2002, there were almost 2.4 million people, or 11% of total employment (9.5% for women and 13.4% for women, according to Ires), working on employer-coordinated freelance contracts.

* For semi-subordinate employment, it is not possible to calculate the number of full-time jobs. It is estimated that around 23% of semi-subordinate workers are also dependent employees and 11% are pensioners.

** In full-time job equivalents - 2001 figure.

Source: Ires

The above figures for employer-coordinated freelance work, calculated on Institute for Social Insurance (Istituto nazionale di previdenza sociale, Inps) data concerning the take-up of social security cover under the scheme specially created for freelance workers, in fact overestimate the real extent of this type of employment relationship. Indeed, fully 23% of those on the Inps scheme are actually in dependent employment, so that the number of employer-coordinated freelance workers falls to just under 1,700,000, or 8.4% of total employment (the overall figures on atypical work given above refer to this latter percentage). Moreover, a further 11% of those enrolled in the Inps scheme also receive a pension. Also to be taken into account are highly specific categories such as members of company boards, who account for 38% of freelancers enrolled with Inps and partly overlap with those in dependent employment or on pensions. However, on the basis of the data available, one may reasonably suppose that employer-coordinated freelance workers of uncertain status, both from the contractual point of view and as regards social protection, amount to around 1,300,000. Many of them are, it is believed, in reality dependent employees 'disguised' as freelances – or 'fake' self-employed workers – 'improperly' hired on atypical contracts, mainly in the services sector, in order to avoid the cost of dependent labour.

Another significant figure concerns the high proportion of women in this type of employment relationship. More and more employer-coordinated freelance workers are women, especially in the South of Italy, where the majority of semi-subordinate workers are to be found (54.4%). Such a high percentage is though to be indicative of the especially weak labour market position of women, to whom the most precarious atypical jobs are offered (and which they accept).

As regards the age of employer-coordinated freelance workers, the largest age group consists not of young people but rather of 30- to 39-year-olds, who make up almost one third of the total. This finding indicates that it is only for a minority of workers that employer-coordinated freelance work constitutes a means of entry to the labour market and a bridge to steady employment.

Despite its quantitative importance, employer-coordinated freelance work is not regulated by specific legislation. This is regarded in some quarters as a serious shortcoming. In fact, whereas subordinate atypical work is regulated by tailor-made laws, the most detailed of which concern temporary agency work (IT9707308F), little has been done with regard to employer-coordinated freelance work. So far, legislators have restricted themselves to introducing some forms of protection. A special pension fund has been set up for semi-subordinate workers, with compulsory contributions (although at a lesser level than those paid by dependent employees). Maternity benefit (IT0207303F), family allowances for low-income households, sickness benefit (though only in the event of hospitalisation) and compulsory accident insurance have also been introduced for this group. For fiscal purposes only, the incomes of employer-coordinated freelance workers have been equated to those of dependent employees, which has forced employers to compile pay statements.

The system of protection for coordinated freelance workers still does not cover such crucial matters as the fixing of minimum pay levels, the regulation of holidays and paid leave, periods of absence from work for serious personal reasons, adequate protection in the event of sickness, or severance allowances in the case of early termination of the employment relationship by the employer. Other matters not addressed by legislators are the right of assembly and trade union activity, workplace health and safety, equal opportunities between men and women, and training provision.

Trade union representation and collective bargaining

Besides the absence of a systematic regulatory framework, employer-coordinated freelance work also raises a number of problems from the point of view of industrial relations - primarily as regards representation, given that the precariousness and discontinuity of their work makes atypical workers particularly resistant to unionisation, but also as regards the creation of a comprehensive system of collective bargaining. With regard to the latter aspect, temporary agency workers are now covered by a national collective agreement (IT9806170N) which has recently been renewed (IT0208101N). However, until very recently semi-subordinate workers lacked any form of 'first-level' (national) bargaining. Nevertheless, despite these delays, important company-level and sectoral agreements have recently been reached, and the first signs of national bargaining are apparent, albeit amid numerous difficulties.

A significant role in the creation of a stable industrial relations system for atypical workers is being played by specific structures for such workers set up within the trade union confederations (IT9807327F). The General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and Union of Italian Workers (Unione Italiana del Lavoro, Uil) have created 'New Work Identities' (Nuove Identità di Lavoro, Cgil-Nidil), the Atypical and Temporary Agency Workers' Association (Associazione Lavoratori Atipici e Interinali, Alai-Cisl) and Committees for Employment (Comitati per l’Occupazione, Uil-Cpo) respectively (Cpo had been set up previously to represent unemployed workers).

To date, the collective bargaining promoted by these atypical workers’ unions has (according to the Nidil-Cgil archive on such agreements signed up until July 2003) led to 65 agreements, of which around 40 have been signed at the company level and 12 at the national and/or sectoral level (with associations or bodies comprising several firms in the same branch). These cover a total of 73,000 workers (mainly employed on 'continuous and coordinated' freelance work contracts but also occasional workers), consultants with or without individual VAT tax codes, freelancers and professionals not enrolled on a register or with a social security fund. Moreover, a further 27 sets of company-level negotiations are currently in progress, as well as 10 or so at the national and/or sectoral level, on the renewal of agreements or the conclusion of new ones. At the end 2003, therefore, the number of agreements should reach 100, with almost 130,000 semi-subordinate workers covered by collective agreements. Finally, the general employment conditions of around 34,000 'economically dependent' workers are regulated directly by new collective agreements signed by sectoral social partner organisations for certain sectors such as schools and telecommunications.

Besides the trade unions, the signatories to the agreements include a wide variety of companies, associations and public agencies, and can be classified into five different groups, as follows.

1. The largest group (more than 20 agreements) comprises the public authorities in their capacity as employers, where the agreements are intended to give greater transparency to the use of employer-coordinated freelance workers in the public sector.
2. The next largest group (with around 20 agreements), consists of non-profit organisations, so-called 'private social' entities such as Unicef or Amnesty International and other associations active in Italy.
3. Next comes a group comprising companies operating in the private services sector (13 agreements) which are represented by, for example, various local employers’ associations, like that for shopkeepers in Florence, or associations of specific professionals such as labour consultants in Bologna.
4. There are also agreements signed with private firms operating in the market. There are only 12 of these agreements, but they involve 28 companies running call centres or engaged in telemarketing or market research activities which make use of large numbers of semi-subordinate workers.
5. Finally, there are also'institutional agreements' with the public authorities, which in this case act as the 'regulators' of atypical employment relationships. Most notable of these are three regional agreements for Emilia Romagna, Tuscany and Lazio, as well as a number of provincial agreements (in Liguria and Veneto, besides Emilia Romagna and Tuscany). These are distinctive agreements, whose contents resemble 'concertation protocols' more than the negotiated exchange involved in the first four groups and typical of collective agreements. Their content mainly relates to social protection.

Agreements on employment conditions

The first four groups of agreements outlined above can be examined together in terms of their content. Although they differ widely (because they refer to both public and private companies), all these agreements for employer-dependent freelance workers have the form, scope and content typical of a collective agreement. The lay-out of the text is that typical of a collective agreement, with a preamble followed by the specification of the scope of application, rights and obligations of the workers, and trade union rights. The contents of the agreements are very heterogeneous, but there are a number of recurrent features. In particular, the agreements include the following points (although very few contain all of them):

• prescription of the form to be taken by the individual work contract and definition of the job. This provision is frequently accompanied by a right for the employer-dependent freelance worker to receive a copy of the contract and information about the relevant collective agreement;
• the duration of the work contract, with specification of the dates when the employment relationship begins and ends. The duration usually varies between a minimum of two months (for occasional work) to 12 months or more. However, some continuous and coordinated employment relationships are open-ended;
• recognition of the autonomous status of the workers, who are not subject to the managerial and disciplinary power of the contracting entity and have wide margins of freedom in defining their working hours and modes of work. The agreements covering the call centre sector – where work may be performed seven days a week, with long hours covering almost the entire day – affirm the absence of compulsory schedules. However, in the majority of cases the agreements offer the possibility of agreeing a 'time band', although this need not be binding. Workers usually distribute their hours across several daily six-hour shifts from Monday to Friday. At weekends they are available for work on a rotating basis on Saturday and Sunday, usually once a month;
• definition of the remuneration and how it is to be paid. Pay may be calculated on a lump-sum basis (the total amount for the entire duration of the job), by the hour or day, or according to performance - which in the case of call centres is the number of calls dealt with. As regards the level of pay, this is fixed in agreements with public bodies as an amount at least equivalent to that received by dependent employees doing a similar job. By contrast, agreements with private companies, in the absence of independently established pay rates, vary greatly with respect to remuneration, or in some significant cases (for example the Assirm agreement discussed below) set minimum pay levels for certain professional activities for which freelancers are used (Assirm specifies seven such activities). Also specified is the frequency of payment, which is usually once a month. Sanctions are rarely provided for in the case of delayed payment by a contracting entity. Nor does any agreement (with the sole exception of that at Assirm) envisage increments for night, holiday or weekend work. However, transport, board and lodging are usually paid by the contracting entity for off-site work;
• the obligation to apply workplace health and safety regulations to employer-coordinated freelance workers;
• suspension of the contract in the event of maternity, sickness, accident, or for urgent family reasons. During the period of absence, the parties undertake to suspend the employment relationship without rescinding the contract. The duration of suspension varies according to the agreement concerned, but it usually ranges from two months for sickness with or without hospitalisation to five months for maternity, and in the case of accidents until complete recovery. The majority of agreements, except for some in the public sector and in the 'private social' sector, do not provide for forms of benefit or compensation during the period of suspension, since these are guaranteed by specific laws, only doing so for sickness with hospitalisation, accidents and maternity;
• a period off work for employer-coordinated freelances equivalent to annual holidays, but without pay;
• access to training schemes;
• the possibility of early cessation of the contract with prior notice. If notice is not given by the contracting entity, the worker is entitled to compensation;
• the right of first refusal for employer-coordinated freelance workers if the firm decides to hire personnel on a fixed-term or open-ended basis. This is a clause contained only in the public sector agreements and in some instances in the 'private social' sector. In the fully private sector, the right of first refusal concerns only the renewal of contracts for workers already working on an employer-coordinated basis. In this regard, an important innovation has recently been introduced (see below) by the national protocol for outsourced call centres;
• the granting of a series of trade union rights to employer-coordinated freelance workers, including participation in workplace assemblies, the posting of union notices, the election of their own representatives and the collection of union dues; and
• definition of a conciliation procedure and the settlement of disputes before a special joint committee.

Social protection agreements

The contents of the fifth group of regional and provincial 'institutional agreements' concern not so much stipulation of the rights and duties of workers as the regulation of collective systems of social protection for employer-coordinated freelance workers. Such bargaining on welfare issues has concentrated mainly on the following points:

• access on an equal footing with other workers to the public employment services and to the job-search assistance provided by them;
• access to low-interest credit for house purchases or for investments of other kinds;
• support for new enterprise creation in the form of bank loans and tax relief;
• initiatives to create social security funds providing coverage for employer-coordinated freelance workers in the event of sickness or prolonged absence from work;
• indirect income support in the form of contributions paid to cover periods of unemployment, and the devising of supplementary pension schemes; and
• access to training schemes, whereby the public authorities provides training vouchers worth a minimum of EUR 250 to a maximum of EUR 1,250 for each employer-coordinated freelance worker.

Latest bargaining developments

An interesting first attempt to create a bargaining system articulated between the national sectoral level and the company level is represented by an agreement signed in December 2000 (IT0101171N) by the Associazione Istituti Ricerche di Mercato (Assirm), representing 28 of the largest market research companies in Italy (including Abacus, Doxa and Demoskopea). Now awaiting renewal (it expired at the beginning of 2003), this agreement regulates non-subordinate employment in the market research sector. It constitutes a genuine national collective agreement with effect analogous to a sectoral agreement. The companies involved have signed 'memoranda of understanding' (verbali d’intesa) implementing the agreement.

A further advance in creating a preliminary national and sectoral framework for collective bargaining has recently been achieved with the signing on 18 July 2003 of a first national 'protocol' covering dependent workers in outsourced call centres. The protocol, which incorporates numerous articles from the national collective agreement for the commerce sector, regulates a sector with around 120,000 employees, of whom almost 80% are atypical. As regards semi-subordinate workers, the protocol envisages gradual stabilisation until a maximum threshold of 40% of these workers as a proportion of dependent workers is reached in 2007. In order to achieve this objective, companies will give priority when hiring to employer-coordinated freelance workers. The protocol will be implemented in September 2003 with a specific agreement on pay rates and 'normative' aspects.

Commentary

From the research data available, it can be deduced that employer-coordinated freelance work is no longer a transient phenomenon involving young people and undertaken externally to firms and for several contracting companies. It is now changing into a permanent and adult phenomenon: more than 90% of such freelancers work for a single client, and the majority of them are aged over 30. Moreover, continuous and coordinated employment relationships are being transformed into stable employment relationships to a much lesser extent than other atypical contractual forms such as temporary agency work or fixed-term jobs. It seems that firms use semi-subordinate labour mainly to reduce their costs and to achieve greater organisational flexibility. In call centres, for example, it is very often the case that workers are called into work or left at home according to fluctuations in the work flow. For the majority of workers involved, continuity takes the form of frequent periods of non-work during which they are still at the disposal of the company, so that the amount of money actually received at the end of month is very modest. During more intense periods, this induces the workers to maximise their efforts, working long hours or accepting large increases in productivity targets. The so-called 'sondaggisti' or pollsters are those workers whose work levels fluctuate most widely. Consequently, there is an urgent need for legislation which imposes systematic regulation on employer-coordinated freelance work. This is all the more necessary now that the initial phase, when the relationship between contracting company and worker was predicated on 'professional visibility' and the idea of the autonomous professional, has given way to a phase in which it is the hope of steady employment that has come to predominate.

As regards collective bargaining, it is evident that this is still underdeveloped. Negotiation takes place mainly at 'second level' (principally that of the company, and to a lesser extent the territorial level) in the absence of a solidly-structured national and sectoral framework. Moreover, the high turnover of atypical workers does not facilitate the consolidation of stable trade union relationships with workers who usually take individual initiative in the negotiation of working conditions. It is not by chance that strike action by semi-subordinate workers has to date proved impracticable. Note should also be taken of the contents of collective agreements. Those concluded with the public authorities, and to some extent with enterprises operating in the 'private social' sector, seemingly provide better guarantees for employer-coordinated freelance workers, such as pay rates equivalent to those applying to permanent employees, and a good level of protection in the event of work interruptions and early termination of the contract. Bargaining with private enterprises, by contrast, has preserved greater flexibility in the use of employer-coordinated freelancers, with pay spread over a wider and generally more fluctuating range than permanent employees.

Finally, brief mention should be made of the legislative reform transforming employer-coordinated freelance workers into 'project workers' approved on 7 June 2003 by the decree implementing Law no. 30 on the labour market(IT0307204F) and designed to restrict the improper use of continuous and coordinated employment relationships. When the reform law comes into force in September 2003, it seems likely that only a few employer-coordinated freelance contracts will be converted into dependent employment contracts, while the majority will become 'project work' contracts or regress into even more anomalous ones, such as 'silent partnerships' or freelance consultancy. (Livio Muratore, Ires Lombardia)