Agreement signed on relaunch of textiles sector in Southern Italy

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In March 1999, the sectoral employers' organisation and trade unions signed an agreement aimed at relaunching the textiles industry in the South of Italy. The most innovative aspects of the agreement concern the relaunch of investment, the fight against undeclared employment, vocational training, and the role of social partners in fostering development.

The textiles and garment industry is very widespread in Italy's southern regions, or Mezzogiorno, employing 15% of the industrial workforce in some regions, with a very high proportion of female workers. The sector has particular characteristics which differentiate it from other industrial sectors. It arose spontaneously, without transferring northern companies to the South - as was the case for other sectors of production - and is characterised by large numbers of subcontracting firms, most of them operating in the underground or hidden economy. These small enterprises very often supply larger companies located in the central and northern part of Italy, which specialise in the fashion sector.

In order to grow, these numerous small enterprises need to: innovate their products and their processes; fight distorted competition from the underground economy; improve workers' qualifications; and reduce the cost of funding provided by the local credit system, which is outdated and inefficient. These problems are addressed by an agreement signed on 10 March 1999 by the Federtessili sectoral employers' organisation and the sectoral trade unions affiliated to the main confederations, Filtea-Cgil, Filta-Cisl and Uilta-Uil.

Given the potential for development of the textiles and garment sector in southern Italy, the new agreement underlines the necessity to stop international relocation and decentralisation processes and to foster, on the contrary, an investment plan for the South.

The partners have identified four southern regions - Abruzzo, Puglia, Campania and Sicily- susceptible to further development, given their high concentration of cotton and household linen companies. In these areas it will possible, thanks also to the opportunities provided by the tripartite national "social pact for development and employment" signed in December 1998 (IT9901335F), to relaunch investment. The pact provides for: important reductions in the cost of labour for new investments made in the South; measures to fight the underground economy and to make illegal companies legitimate; the better organisation of the "industrial districts" system; and measures to strengthen the entrepreneurial and organisational development of companies, through the promotion of "service centres". The new agreement for southern textiles deals with these subjects and identifies concrete measures aimed at fostering the consolidation of the fashion industry in southern regions.

The measures identified by the agreement are as follows:

  • training. Centres are to be created to carry out analyses of companies' professional needs, coordinate training projects, find funds and organise training courses aimed at preparing a qualified workforce to be used in the expansion of the sector. Retraining initiatives are also foreseen for workers and employers;
  • industrial districts. It is proposed that the criteria which define "industrial districts" should be modified. In this way, many areas of the Mezzogiorno could fall under the definition laid down in the law which governs industrial districts, and companies could thus use the incentives provided by the law for this kind of productive structure. The creation of industrial districts is aimed at upgrading productive processes and improving companies' productivity and competitiveness in the context of the internationalisation of markets. Furthermore, the agreement proposes the creation of partnerships between southern and northern industrial districts, in particular involving the service centres which these districts have in order to support companies' development;
  • the fight against the underground economy. The parties commit themselves to encouraging "alignment agreements" which allow companies to maintain for a certain period of time (agreed between the parties) pay and working conditions lower than those provided for by the national sectoral collective agreement, in order to encourage them to become legitimate (IT9903244F). The fight against the underground economy will be publicised locally by territorial joint commissions responsible for assisting companies during the process of alignment; and
  • role of the social partners. The partners commit themselves jointly to strengthening their role through concertation, in order to foster local development. These concertation processes will deal with the fight against the underground economy, the control of labour costs and of the cost of funding, the relaunch of the apprenticeship system and the respect of legality in employment relationships. As part of this process, the partners will organise a joint campaign against the use of child labour in the underground economy.

The partners believe that these actions together will lead to the creation of 10,000 new jobs and to the legitimisation of companies operating in the hidden economy that employ, at present, about 50,000 workers.

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