Ilva, Italy: Integration into the labour market of people at risk of exclusion – early school-leavers and long-term unemployed
In 2003, the management of the Riva Group steel production plant in Taranto and the representative trade union agreed to establish measures to facilitate the placement of young people aged under 29 years and long-term unemployed people aged under 32 years in the work environment. The agreement is geared towards progressive employment stability, since it explicitly provides for a high rate of work and training contracts as well as fixed-term employment contracts extending to open-ended contracts. The trade union is involved in the monitoring activity on an ongoing basis.
The Taranto steel production unit is part of the Riva Group, which is a family-run group comprising several companies operating in iron and steel production and related activities. Following the long-lasting transformation that has led to the group’s current configuration, the acquisition of Ilva steelworks is very significant as it represents the most important privatisation operation of publicly-owned steelworks launched by the Italian government in 1995. In spite of the international market approach, the company’s worker distribution is still characterised by a large concentration of staff in Italy, where about 77% of the overall workforce is located. The production unit in Taranto in southern Italy employs around 14,000 employees, the majority of whom are men.
The group’s average unionisation rate in Italy is around 32%, while it reaches 40% in the production unit in Taranto.
In the 1990s, many workers in the iron and steel sector took early retirement due to the possible exposure to asbestos in the workplace. The asbestos cases are regulated by legislative Act No. 257 of 1992 which established the rules relating to the early retirement of workers at risk of exposure to asbestos.
Description of the initiative
As a consequence of the privatisation process that has been ongoing since 1995 and the high number of employees who benefit from asbestos-related early retirement, the employment level at the Taranto-based production unit, and at all its related supplier industries, has rapidly decreased. In the absence of specific instruments to support workers during a crisis period, the company and the trade unions have introduced a number of tools through a so-called ‘complementary agreement’ at company level, which was signed straight after the implementation of the new labour market reform established by the Biagi law (Law 30/2003).
First, the agreement provides for a reduction in the use of fixed-term employment contracts from 34% to 16% of the total employment level. In order to achieve this objective, the agreement has introduced a number of provisions.
Unlike Law No. 276/2003, the agreement establishes a framework for placement contracts: this measure is geared towards progressive employment stability, and a meeting with the trade unions is scheduled every six months to monitor the implementation process. Secondly, four categories of workers have been identified for the use of placement contracts, including specialised workers dealing in iron and steel activities, mechanical assemblers, electrical assembly workers and clerical workers. The agreement applies to young people aged under 29 years and to long-term unemployed people less than 32 years of age. Furthermore, unlike the national law that envisages a job classification for people employed on placement contracts that are two levels below the classification level set for a specific job, the agreement states that, based on a scale of seven levels, the second level is the lowest and in the case of an open-ended employment contract the worker moves directly on to the third level. The first job classification level is only applicable for the first six months for those workers with low school-leaving qualifications or those in their first job in the industry.
In comparison with the previous agreement, the length of the placement contract has been reduced from 24 months to 18 months.
As regards training, the agreement provides for 80 hours of training, which is a higher amount of hours than the national level specifications and the indications of the national trade union confederations. Half of the total training hours consist of individual training or coaching. The workplace trade union is constantly informed about the different choices made by the company in relation to training. The so-called ‘complementary’ contract states that only improved measures that are established by means of a negotiation process can integrate the agreed tools.
The agreement also provides for the use of fixed-term employment contracts for all those workers who, as a consequence of the privatisation process, had been dismissed from the companies operating within the supplier industries. The agreement also acknowledges the right of these workers to benefit from stable employment. All the workers belonging to this category – the so-called ‘cartellinati’ – are entitled to an open-ended employment contract in the case of the renewal of the first fixed-term contract lasting 13 months. In doing so, the company puts an end to the way in which the temporary employment contracts could extend the precarious situation of the workers on the availability list. The ‘cartellinati’ referred to a special list, drafted by the Regional Labour Exchange, where workers who have been dismissed due to workforce cutbacks are registered. For workers who have been dismissed from enterprises eligible for special help from the Wages Guarantee Fund, registration on the list entitles them to a so-called ‘availability allowance’ (indennità di mobilità) for a certain period, the length of which varies depending on the age of the workers.
In selecting the appropriate people to place in employment, the company has adopted two different approaches. For the ‘cartellinati’, the choice was already defined since the names are selected from those registered on the availability list or on the grounds of other government-based agreements. For young people, the company focuses on people with standard secondary school education in order to increase the average education level among blue-collar workers.
Along with attending a meeting with the trade union representatives, the company commits itself to providing, on a yearly basis, all the information and data revealing how many fixed-term contracts have been extended to open-ended contracts, the development of training courses, and the different types of employment contracts implemented.
The innovative aspects included in the so-called ‘complementary agreement’ at company level consist of the quality and quantity of the training courses and the higher transformation rate of placement contracts into open-ended employment contracts. At the Taranto production unit, about 93% of young people have had their placement contract upgraded to an open-ended contract, as opposed to 60% of the former work or training contracts. From 2003 to the end of 2005, about 1,050 placement contracts were awarded. Given the production activity, all the placement contracts were taken up by men. Furthermore, in comparison with the national level, the agreement guarantees a better job classification for individuals who complete the placement contract.
The use of placement contracts and fixed-term contracts increases the employment rates in areas where unemployment is high, especially among young people. The increase in the employment level was so significant that led to a decrease in the unemployment rate at provincial level.
As a result of the enforcement of asbestos-related early retirement, the company has experienced an increasing staff turnover rate. A lot of highly skilled workers left their job and less skilled people replaced them. This called for a major training effort in order to maintain and improve the skills levels of the workforce and to promote safety measures in the workplace. With the approval of the second period of asbestos-related early retirement relating to the years 1998–2003, the turnover rate will involve at least 3,000 employees in the Taranto unit.
The cooperative relationship between management and the trade union represents a key element in the success of the initiative, as good relations contribute to making the flexible employment contracts more stable and to increasing the company’s competitiveness.
Exemplary and contextual factors
In contrast to the national law, Ilva steelworks in Taranto makes sure that a large number of young and unemployed people can enjoy stable employment in a region characterised by a high unemployment rate. It also guarantees high quality training standards and the required amount of training during the placement period, in order to improve workers’ skills and working conditions in terms of health and safety awareness. All the steps taken as part of this initiative are the result of positive social dialogue.
Davide Dazzi, Fondazione Istituto per il Lavoro, Bologna