Negotiations start at Electrolux-Zanussi to resolve participation controversies

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In autumn 1996, following what company management considered the constant opposition of some works councils to worker participation, the Electrolux-Zanussi group in Italy announced that it intended to terminate all company-level agreements on participation from the end of March 1997. At the same time, however, the company invited trade unions to negotiate a revision of the participation model which had been developed within the group during the previous years, in order to strengthen it and confirm joint and full support from both unions and management. Consultations among company and union representatives started in May, but they have not yet led to an agreement. The issue at stake is very important, since the participation model at Electrolux-Zanussi is generally considered one of the most advanced in Europe and the most significant in Italy.

The Electrolux-Zanussi model

Workers' participation in the Electrolux-Zanussi group, which is the second-largest metalworking group in Italy with some 15,000 employees and a turnover of more than ITL 5,000 billion, developed during the 1990s (IT9704204F) through the creation of several joint committees which are responsible for different issues. The most important committees at plant level are:

• the joint committee on environment issues and workplace safety which, among other items, is in charge of investigations concerning the work environment;
• the joint technical committee, which examines production organisation and training paths and can take part in dispute resolution; and
• the committee on equal opportunities, responsible for promoting the position of women and fighting against sexual harassment.

At group level are found the following joint bodies:

• the coordination centre for plant-level committees, which coordinates the activities of these committees;
• the committee for joint training, whose task is to design training programmes for building up "shared participative values";
• the special committee on work issues, which promotes and supports innovation in work organisation;
• the national joint committee for equal opportunities and socio-professional integration, whose responsibilities include promoting affirmative action and carrying out formal procedures in cases of sexual harassment;
• the national guarantee commission, which is a very important body since it has to solve disputes. It has seven members - three trade union representatives, three company representatives and a chair chosen by mutual agreement; and
• the supervision board, a joint body (three representatives each from the company and trade unions) which has the right to be consulted before major industrial and organisational decisions.

The role of works councils in the model's crisis

The crisis that had hit the Electrolux-Zanussi model of participation became evident when, on 31 October 1996, the company announced its intention to terminate all company-level agreements on participation. Management, however, did not intend to give up something that it considers a significant competitive advantage, bringing about stable industrial relations with a low level of conflict, and invited trade unions to discuss the form and content of participation. Negotiations were meant to start in May 1997, based on a "single text" on participation prepared by Professor Luigi Marcucci, chair of the company guarantee commission. This text aims to represent a systematic harmonisation of all the company-level agreements that have progressively defined the Electrolux-Zanussi model since 1991. These negotiations, however, did not start, since the Fiom-Cgil metalworking trade union refused some specific provisions included in the single text prepared by Professor Marcucci. Its objections related in particular to the following elements:

1. the fact that the guarantee commission could punish with specific sanctions any violation of the obligations created by the participation system; and
2. the fact that joint committees could express binding decisions, and that some bargaining issues (such as the definition of annual production targets, the specific ways to meet these targets, and the productivity and quality objectives to be taken into account in the definition of variable elements of pay) would be delegated to the coordination committee of the group's works councils instead of remaining within the sphere of individual works councils (Rappresentanze sindacali unitarie, Rsu).

The conflict with the company mainly relates, in fact, to the issue of bargaining rights: some works councils, in particular those in the Veneto and Friuli Venezia Giulia plants (in north-eastern Italy) - including the Susegana plant, the group's main production site and Europe's largest white-goods production plant - opposed what they consider an over-centralised model of company industrial relations that leaves individual works councils with no bargaining power. Under this model, in the opinion of those works councils, decisions would be taken without consultation with the direct workers' representatives.

This position opens an important division among trade unions: the opposition to the company proposals comes from one part of Fiom-Cgil, whereas Fim-Cisl and Uilm-Uil, together with the other part of Fiom-Cgil, support them.

Negotiations are expected to be particularly difficult, and the company asked for mediation by Federmeccanica, the major employers' organisation in the metalworking sector. The first meeting at Federmeccanica between trade unions and company representatives was postponed for some time, but eventually started on 19 June. Just a few days before the start of negotiations, the secretary general of Fiom-Cgil, Claudio Sabattini, helped create a positive attitude by declaring full interest in continuing the dialogue with the company, and stating his acceptance of the principles of participation.

From its point of view, the company has always considered the participation model a competitive advantage, and the top management declared that its failure would consequently lead to a reconsideration of the group's industrial and investment strategies. Furthermore, the Electrolux group (based in Sweden) has recently announced a restructuring plan that will involve some 12,000 dismissals, mainly in Europe, and trade unions have expressed their worries about the effects on Italian plants.

Commentary

The difficulties that the participation model at Electrolux-Zanussi is experiencing emphasise one of the typical problems of Italian industrial relations - the overlapping in a single representative body of both bargaining prerogatives and participation activities (following the "single channel" model). The only workers' representative bodies which are legitimised at company-level are Rsus. They might, in some cases, delegate their rights to other participation bodies created by agreement, but this does not overcome the basic contradiction that lies in the fact that the Rsu continues to hold a power of veto over the activity and the decisions of such participation bodies. It was actually an impasse of this kind that led Electrolux-Zanussi to announce its intention to terminate all company-level agreements on participation.

Another issue refers to the different "philosophies" that characterise the three major trade union confederations, a problem that often cuts across a single organisation, as in this case happened with Fiom-Cgil. The persistence of different opinions on strategies makes particularly fragile all options that depend on the voluntary acceptance of participation schemes, without any clear regulations that support the schemes' operation. In this sense, a stronger institutionalisation at interconfederal or industry-wide level of the rules on participation could certainly support the experiences developed at company-level. (Roberto Pedersini, Fondazione Regionale Pietro Seveso)