Legislation on labour market reform adopted

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In February 2003, after a lengthy and controversial legislative and negotiating process, the Italian parliament approved a 'proxy law' on reform of the labour market. The reforms relate to areas such as job placement services, new forms of employment contract and part-time work. The government plans to issue decrees to implement the law by June 2003.

On 3 October 2001, the Minister of Labour, Roberto Maroni, presented a 'White Paper' on the labour market (IT0110104F). On this basis, on 15 November 2001 the centre-right government approved a proposal for a 'proxy law' (No. 848) on labour market (IT0201277F) - a proxy law means that parliament delegates to the government the power to legislate on a particular issue.

Trade unions were very critical of the contents of the bill for the proxy law, especially about the parts concerning: amendments to Article 18 of law 300/70 (the Workers' Statute), which provides for reinstatement of workers dismissed without 'just cause ' or 'justifiable reason ' (IT0112127N); the reform of social shock absorbers - the measures which help cushion the effects of job losses and restructuring (IT0205204F); and unemployment benefits and incentives.

The opposition of the trade unions led to them holding a united one-day general strike on 16 April 2002 (IT0205101N). After the strike, the government proposed removing the most controversial aspects from the proposed proxy law and transferring them to another bill (No. 848bis), which was to be discussed separately. After this initiative, trade unions took diverging positions. The General Confederation of Italian Labour (Confederazione Generale Italiana del lavoro, Cgil) refused to resume negotiations, while both the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacato Lavoratori, Cisl) and the Union of Italian Workers (Unione Generale del Lavoro, Uil) considered the changes to the bill as a sign of the government's willingness to engage in dialogue.

Negotiations, therefore, continued without Cgil (IT0205204F and IT0206102N) until July 2002, when the government and all the social partners but Cgil signed the 'Pact for Italy' (Patto per l'Italia), a national agreement on the labour market, the tax system and the South of Italy (IT0207104F). Cgil organised numerous protests against the measures proposed in the Pact and held a unilateral general strike on 18 October 2002 (IT0212104N).

Proxy law No. 848 on the reform of the labour market was finally approved by parliament on 5 February 2003, while law No. 848bis is still under discussion in the Senate labour committee. The main innovations introduced by proxy law No. 848, which will apply only in the private sector, are as follows.

  • The public monopoly on job placement services has been ended. Employment consultants, temporary work agencies, universities and joint bodies established by the social partners will be allowed to provide these services. The reform of job placement services will also allow for the creation of a 'continuous labour exchange' (Borsa continua del lavoro), an employment service which will involve the collaboration of public and private bodies in continuously updated information provision on labour demand and supply.
  • New forms of employment contract will be introduced, as follows:
    • 'on call jobs' (lavoro intermittente), whereby workers are available to work on a discontinuous or intermittent basis. The workers will be able to chose whether or not to respond obligatorily to a call to work from the employer. If they do so, the employer is obliged to pay them an allowance;
    • job-sharing (lavoro ripartito), whereby two workers share the same position, has been simplified and given a legal basis. Workers will be able to organise sharing the job between them without constraints from the company; and
    • 'additional work' (lavoro accessorio) has been simplified and will be tried out for jobs involving personal care.
  • Companies will be able to use outsourcing to a greater extent, but only if the unit to be outsourced is already established and working autonomously.
  • Staff leasing will be allowed - ie the establishment of companies which hire workers on a regular basis and post them on open-ended contracts to other companies.
  • The regulation of the employment relationship between workers and members in cooperatives has been changed.
  • Apprenticeship and training contracts will be reviewed by the government in order to improve their training element.
  • Social security and labour inspection activities which are at present entrusted to the Ministry of Labour and the National Social Security Institute (Istituto Nazionale Previdenza Sociale, Inps) will be reviewed and decentralised.
  • Flexible forms of part-time work will be introduced and part-time employment will be allowed in the agricultural sector. Greater flexibility in part-time work will be achieved by new rules on extra hours (ie work exceeding normal part-time hours but below full-time hours), while there will be better opportunities for workers to switch from part-time to full-time work and vice versa.

The government will now have to issue implementing decrees for the 'proxies' contained in the law and has committed itself to completing the whole legislative process by June 2003, in order to have the new rules in force before the end of summer 2003.

Diverging opinions have been expressed about the approval of the proxy law. The Cisl and Uil union confederations took a positive view of the legislation, while Cgil voiced many criticisms. Raffaele Bonanni, the Cisl confederal secretary, expressed a positive assessment of the law, especially the part concerning employment services 'because it finally overcomes the 10-year-long stagnating situation on the labour market'. Adriano Musi, the deputy general secretary of Uil, called for 'a dialogue between the partners to verify if the positive approaches contained in the Pact for Italy will be transferred into the implementing decrees'.

Giuseppe Casadio, confederal secretary at Cgil, confirmed the opposition of his confederation to 'a regulation which believes that Italy’s development and the competitiveness of industrial sectors can be achieved only by reducing labour costs and protection'.

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