First sectoral agreement signed for Italian railways

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After lengthy negotiations, the first sectoral agreement for the Italian railway industry was signed in April 2003. The most important aspect of this deal is the extension to the railway sector of the two-tier collective bargaining structure (sectoral and decentralised), which was introduced in most Italian industries by a July 1993 national tripartite agreement. Among other innovations, the railway sector agreement includes a new personnel classification system and provides for flexible forms of employment. It represents a notable renewal of sectoral industrial relations, carried out in the framework of the current liberalisation of the railway sector based on EU rules.

After more than three years of negotiations, whcih began following an agreement on the restructuring of state railways signed in November 1999 (IT9912349F), the first collective agreement covering the Italian railway sector was concluded on 16 April 2003. On the employers' side, the deal was signed by the Confederal Agency of Transport and Services (Agenzia confederale dei trasporti e servizi, Agens) - the employers’ association which represents the firms of the Italian State Railways (Ferrovie dello Stato, FS) group - together with a delegation of railway companies and with the assistance of Confindustria, the major Italian employers’ association, to which Agens is affiliated. On the trade union side, it was signed by the Italian Federation of Transport (Federazione italiana trasporti, Fit), Italian Federation of Transport Workers (Federazione italiana lavoratori trasporti, Filt) and Union of Italian Transport Workers (Unione italiana lavoratori trasporti, Uiltrasporti), assisted by their respective confederations - the Italian Confederation of Workers’ Unions (Confederazione italiana sindacati lavoratori, Cisl), the General Confederation of Italian Workers (Confederazione generale italiana del lavoro, Cgil), and the Union of Italian Workers (Unione italiana del lavoro, Uil) - and two independent unions, the Union of Drivers and Railway Activities (Sindacato macchinisti e attività ferroviarie, Sma) and the Railway General Workers’ Union (Unione generale del lavoro-Ferrovie, Ugl-Ferrovie), assisted by the General Workers’ Union (Unione generale del lavoro, Ugl) confederation.

In accordance with the national intersectoral tripartite agreement of 23 July 1993 on incomes policy and bargaining structure (IT9709212F), the sectoral agreement will be valid for a four-year period as far as its 'normative' part is concerned, and for two years with regard to its pay and economic terms, starting from 1 January 2003. Initially, it will be applied in the FS group. For this reason, the industry-wide agreement has been accompanied by the conclusion of a new company-level agreement to apply the new sectoral framework in FS - a so-called 'confluence' agreement (accordo aziendale di confluenza). The new sectoral deal, as well as covering the 100,000 or so workers of the FS group, may be applied to other firms which provide railway services or will do so in future. The industry-wide agreement, together with the FS company-level agreement, represents a notable renewal of sectoral industrial relations, carried out in the framework of the current liberalisation of the railway sector based on EU initiatives.

New sectoral agreement

The most significant aspect of the new sectoral agreement is the extension to the railway sector of the collective bargaining structure introduced by the tripartite agreement of 23 July 1993, based on two bargaining levels: a national industry-wide agreement supplemented by decentralised bargaining, either at company or territorial level. Previously, collective bargaining in the railway sector was characterised by the presence of a national company agreement, that of the FS group (TN0003402S), which continues to have a dominant position in the sector in all types of rail transport (passenger, freight, local, national and international). Alongside FS, there are a number of local railways which operate on a franchise basis and which, from the point of view of collective bargaining, currently apply the sectoral agreement for local transport. Now, the new industry-wide agreement provides a possible regulatory framework for all firms which provide railway transport services, including those which enter the sector in future following the liberalisation of railway transport. At present, in accordance with the EU rules, 28 firms have obtained a licence in Italy to provide railway services, while six of them also hold a safety certificate, which allows them actually to operate on the Italian network.

The novelty represented by the creation of a new sectoral agreement has made the definition of the 'scope of application' of the deal a particularly sensitive issue. On this aspect, there was even a risk that negotiations might break down. Confindustria, Agens and FS asked for the scope to be restricted to the FS holding company and the other railway firms in the group (Trenitalia, Rfi, Italferr and Metropolis), as well as to new operators delivering services closely connected to railway transport. The trade unions, for their part, leaned towards a broader interpretation, in order to extend the range of employers and employees covered by the agreement. A compromise was finally reached whereby the agreement is to apply 'to the employees of enterprises that undertake activities and services connected with the transport of persons and goods by rail, the provision of railway services for railway transport companies, as well as management of the railway infrastructure, ensuring its efficiency, safety and development'.

In terms of pay, the agreement provides for average monthly wage increases of EUR 85, compared with the initial levels set by the accord itself, to be paid in two instalments (EUR 50 from 1 September 2003, the rest from 1 July 2004). The 'confluence' agreement provides that FS employees will receive a further EUR 30 per month, this increase too being divided into two instalments (of EUR 15 each). To cover the period preceding the signing of the new agreement - the last FS agreement expired at the end of 1999 - a lump-sum payment of EUR 2,150 will be made, divided into EUR 1,600 in June 2003 and EUR 550 in August 2003.

The other innovations in the new agreement seek to overcome a series of rigidities and complexities which characterised the FS agreement, relating both to the organisational structure and work organisation, and to bring regulations closer to those which apply in the other sectors of the Italian economy. For instance, a new job classification system eliminates a number of constraints on geographical and job mobility inherited from the past and limits automatic career advancements. Among the most important simplifications is the new method for calculating pay: according to the previous agreement, 220 variables had to be taken into account, with 80 extra items in the pay packet. Now, with the new agreement, basic pay consists of only the minimum wage and periodic seniority increments. Besides these two items, the existing FS employees will receive an individual 'ad personam' pay element, which will be calculated as the difference between the new minimum wage and individual actual pay. The wages of newly recruited workers will, however, be based only on the minimum rates set out in the new job classification system and the allowances or other pay elements provided for by the new agreement.

The normal working week is set at 38 hours in the sectoral agreement, but will be 36 hours for FS workers, as was previously the case. Moreover, the overtime system has been reorganised and greater flexibility has been introduced into shiftwork.

The new agreement envisages the possibility of using flexible forms of work - fixed-term employment (up to a maximum of 10% of the number of open-ended contracts), part-time work and temporary agency work (up to 14% of total open-ended contracts). Where both fixed-term contracts and temporary agency work are used, the workforce involved in both kinds of employment relationships cannot exceed 13% of open-ended contracts. In consideration of the specific features of railway transport and of the need to ensure adequate safety levels, some key jobs have been excluded from fixed-term or temporary agency work, such as engine drivers, station managers and conductors.

Another significant element of the agreement is the establishment of a 'participatory' industrial relations system for the sector, based on joint committees (a national observatory and equal opportunities committee) and information and consultation procedures at both national and company level. The parties, moreover, have committed themselves to activating the procedure for the establishment of a European Works Council or an information and consultation procedure, in the cases of 'Community-scale' undertakings or group of undertakings.

Reactions

The conclusion of the new agreement brought distinctly positive reactions from all sides. Confindustria, through its vice-president Guidalberto Guidi and director general Stefano Parisi, announced that 'an important step has been taken towards a more modern and competitive railway industry', stressing that 'this agreement, reached by means of bargaining, provides highly important added value in the process of modernising a sector crucial for the country.'

Similar opinions were expressed by Giancarlo Tesini, president of the National Federation of Transport Systems and Modes (Federazione nazionale dei sistemi e delle modalità di trasporto, Federtrasporto) - the 'second-level' employers’ association for the transport sector, to which Agens is affiliated - who reiterated the agreement’s importance in eliminating inefficient automatic mechanisms and introducing forms of flexibility. Mr Tesini stated that a major achievement by the drafters of the agreement was to 'devise a first-level agreement congenial to the new operators in the industry as well. This process has opened the way, amongst other things, to the creation of a single representation for all the railway companies with interests in common to protect.'

The trade unions have also expressed their satisfaction with the agreement. 'This is a blueprint for reform,' said Guglielmo Epifani, general secretary of Cgil, 'in which competition and rules stand side by side. Competition combined with rules gives certainty and dignity to everyone.' The general secretary of Uil, Luigi Angeletti, has also underlined the innovative character of the agreement and stated that 'this is a historic agreement in a sector undergoing an authentic revolution.' For Savino Pezzotta, general secretary of Cisl, 'the railways sector deal is a fine contract. It demonstrates that if the social partners just do their work, an agreement will be found in the end'.

The chief executive officer of FS, Giancarlo Cimoli, stated that 'the agreement reached by the social partners finally provides a reference framework for all companies engaged in the railway transport business. It is an important result which will establish clear rules for all the actors in the market so as to ensure fair competition.'

Commentary

The conclusion of the industry-wide agreement for railway activities closes an important phase in the restructuring of Italian railways and represents an important condition for the advancement of the liberalisation process: the definition of a single collective bargaining framework which may act as a reference for all railway firms. Of course, it cannot be taken for granted that all firms which operate in the railway sector will apply this agreement. However, the unanimous satisfaction which has greeted the deal seems to rule out the existence of strong disagreement and allows for the anticipation of possible negotiations at company level aimed at applying the new sectoral agreement, at least in the companies which provide services closely connected to railway transport.

In any event, the new industry-wide agreement and the accompanying company-level 'confluence' agreement represent an important result for the FS group. In this way, firms belonging to the FS group have taken a significant step forward in completing the restructuring and reorganisation process, overcoming the collective bargaining system which they inherited from a long period of substantial monopoly in the sector. This system was characterised by a high degree of complexity and a bureaucratic approach and was hardly appropriate for a company which has to operate in a competitive economic environment. From the point of view of bargaining structure, the adoption of the model introduced by the July 1993 tripartite agreement allows for the elimination of the specific features of the railway sector and for the realisation of full alignment with the private sector, as has already happened in the other liberalised sectors - telecommunications (IT0007158F), energy, gas and water.

The new agreement provides an important reference for railway operators and a reason for confidence for FS. A real sectoral industrial relations system, however, is still far from being established and its development will depend on the progress of the liberalisation process and on the forms that the market for railway services will take in Italy, notably in terms of the number of firms which will operate in the market and of their respective competitive and bargaining policies, and its connections with the European railway system. (Diego Coletto and Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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