Controversial pact to promote recruitment of disadvantaged people in Milan

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In late July 1999, a preliminary agreement on an "employment pact for the city of Milan" was signed by the city's municipal administration, the trade union confederations - with the important exception of Cgil - and the employers' associations. Under the deal, September will see the start of local-level consultations and dialogue aimed at drawing up pay and employment measures to promote the entry into employment of weaker sections of the labour force - immigrants, long-term unemployed workers, workers over 40 expelled from the labour market, and disadvantaged young people. The Milan Cgil organisation has pulled out of the talks because it fears that the proposals for pay and employment contract flexibility put forward by the city council will open the way for more precarious forms of employment.

On 28 July 1999, a pre-agreement was signed by the municipal administration of Milan, trade union confederations - with the significant exception of Cgil- and the employers' and cooperatives' associations. The intention is to start local-level consultations and dialogue to define an "employment pact for the city of Milan" (Patto per il lavoro nella città di Milano). This preliminary agreement defines the goals and procedural framework for the conclusion of a definitive pact, the aim of which is to encourage the entry into employment of weaker segments of the labour force - immigrants, long-term unemployed workers, workers aged over 40 expelled from the labour market, and socially disadvantaged young people. The preliminary agreement also envisages the creation of instruments, mainly related to training, to ensure stable employment for the workers concerned.

The talks and Cgil's walk-out

The discussions in Milan on concluding a local-level agreement to support employment creation began some months ago with a proposal put forward by mayor Gabriele Albertini, the leader of a centre-right city council, to draw up an "area agreement" (contratto d'area) (IT9704203F) to promote employment for immigrant workers from outside the EU. The local branches of the main trade union confederations immediately criticised the proposal, announcing their unwillingness to negotiate an agreement which concerned non-EU immigrants alone and which, in their view, held out few guarantees for workers.

The talks between the city council and the social partners - which were bilateral until their final phase - were resumed after a new proposal was put forward by the city administration on 13 July 1999. This document extended the proposed pact's range of reference to include other "weak" categories of people in search of employment, with the explicit aim of reducing social hardship, encouraging the regularisation of undeclared labour, and combating those irregular or indeed illegal forms of employment in which marginal groups in the labour force risk being involved. The means proposed to achieve these objectives were labour flexibility vis-à-vis pay and the type of employment contract used. This flexibility was to be defined within the legal and contractual framework, with the city council acting as promoter and guarantor, as well as providing training.

The council's new proposal was favourably received by the Cisl and Uil unions, which saw it as a significant breakthrough, especially in view of the extended range of target groups and the explicit reference to the existing legal and contractual framework. Cgil, by contrast, immediately criticised the proposal and, after around two weeks of talks, withdrew from the negotiations. It opposed the employment pact for Milan on the grounds that the forms of flexibility suggested by the council - which were not included in the subsequent preliminary agreement - might introduce excessive room for labour flexibility, thereby favouring precarious forms of employment with permanent employees replaced by workers on fixed-term contracts. This proposed flexibility concerned, for example, the more extensive use of temporary labour and the introduction of lower pay levels for workers hired on training/work contracts. Moreover, declared the Milan Cgil secretary, Antonio Panzeri, because the proposed local-level agreement would introduce exceptions to national industry-wide agreements, it might lead to the substantial "demolition" of national bargaining , thereby removing guarantees on, for example, the maximum permissible levels of temporary agency or fixed-term employment.

The contents of the preliminary agreement

A significant aspect of the preliminary agreement is its explicit reference to the resolution on the EU's 1999 Employment Guidelines (EU9810130F) adopted by the European Council on 22 February 1999, and in particular to the points concerning job creation at the local level. It also refers to Italy's "national social pact for development and employment" agreed in December 1998 (IT9901335F), emphasising the role of concertation and negotiated planning, at the local level as well as others, in supporting the economy and employment.

According to the preliminary agreement, the Milan employment pact should help meet the demand for environmental and welfare services expressed by public and private enterprises. This demand is often left unsatisfied, or is inadequately catered to by forms of irregular employment which foster irregularity and social hardship. In order to achieve this goal, the tripartite bargaining scheduled for September 1999 should single out:

  • the specific areas of intervention, and the most suitable instruments, including flexible and temporary employment, with which to promote the growth of new services and thus create additional employment. The flexibility envisaged by the employment pact will be defined on the basis of existing legislation and collective agreements, and it may be introduced only through concrete and well-defined plans; and
  • the measures with which to stabilise the jobs created by specific projects.

Local concertation will thus concern itself with: regularising irregular work; vocational training for the new services; the education of non-EU immigrant workers; and simplifying administrative procedures (in particular with regard to the regularisation of the position of non-EU workers).

The preliminary agreement also states that tripartite negotiation should lead to a general agreement covering flexibility, training and stabilisation of the jobs created.

Another important component of the preliminary agreement is its identification of a preliminary area for bargaining and concertation which directly involves the city council. This area comprises city maintenance and cleaning services, which may assume crucial importance during the "Great Jubilee" celebrations in 2000 (IT9906116N). Since cleaning services are often highly labour intensive, and require flexible and largely unskilled labour, the preliminary agreement singles out the weaker labour market categories as being potentially interested in these jobs. In order to improve these workers' skills and to give stability to their employment situation, the agreement emphasises the need for measures in support of training, among which special importance is assumed by alternating work/training schemes.

Finally a specific point in the agreement, included on the request of Assolombarda, the employers' association for the province of Milan, states that bargaining related to the employment pact does not constitute a new bargaining level.


The Milan preliminary agreement seeks to deal with a twofold problem faced by numerous large Italian cities: on the one hand, the provision of public services, and also services to businesses, which often do not satisfactorily cater to the needs of people in search of employment at present; and on the other, the promotion of entry into employment of weaker categories of unemployed people. Although, in certain respects and as regards certain activities - especially care for the city and the environment - the Milan preliminary agreement is a project similar to the "socially useful works" (LSU) scheme, which has substantially been a failure, it is above all a significant example of how space can be found for local-level bargaining even in areas where there are no major problems of unemployment, but rather opportunities to direct action at highly specific segments of labour demand and supply.

The main issue to be addressed by the final agreement seems to be that of not only creating greater labour flexibility but also guaranteeing adequate protection for workers and effective job creation. As regards these aspects, an important feature of the agreement is its explicit reference to linking flexible forms of employment with specific projects, as well as with training that should equip the workers concerned with appropriate skills and consolidate their employment situations.

Difficulties may arise when defining the forms of labour flexibility to be employed, the new services to utilise such flexibility, and the national-level collective agreements to be applied. It was substantially these issues that prompted Cgil to withdraw from negotiations, and they should be addressed in September. The existence of a preliminary agreement does not mean that bargaining on these issues is not going to be difficult. Furthermore, on the basis of the results foreseen, Cgil does not rule out its return to the negotiating table. This latter outcome would obviously reinforce the final agreement and its status as an example to be followed.

Another important aspect is the relationship between bargaining levels, and in particular between territorial-level bargaining and that conducted at the national industry level (IT9907250F). From this point of view, of crucial importance will be the way in which the sectoral trade unions are involved in individual projects, and the responses given to the need for coordination among the various levels of negotiation.

Finally, once again the events surrounding negotiations on the "employment pact for the city of Milan" and the preliminary agreement have highlighted a number of important differences both between the social partners and internally within the trade unions, especially as regards the relationships between bargaining levels. The employers, as represented by Assolombarda, fear the surreptitious introduction of a further level of bargaining, and they are opposed to any action that might tend toward such an outcome. The unions appear to be divided: whereas Cisl is confident of its ability to control decentralisation and to offset exemptions from national agreements through its participation in territorial and company-level bargaining, Cgil defends the existing bargaining structure and resists what it sees as a weakening of the regulatory role of national agreements. This contrast is also evident in the interviews conducted by EIRO. Maria Grazia Fabrizio, the general secretary of the Milan Cisl organisation, stated that any exemptions from national agreements should result from bargaining autonomy of the parties, and that as a consequence "national-level bargaining is guaranteed by the fact that exemptions from dispositions defined by national-level bargaining are negotiated". On the other hand, Antonio Panzeri, the general secretary of the Milan Cgil organisation, declared that it was impossible to define further forms of flexibility at the territorial level because "these are matters that are 'not available' for discussion and which undermine national-level bargaining". From this point of view, the Milan pact for employment, which in other respects is an interesting development, may worsen relations among the union confederations. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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