Metalworking agreement signed without Fiom-Cgil

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In May 2003, after four months of intense negotiations, a draft deal on the renewal of the Italian metalworking sector collective agreement for the period 2003-6 was signed by the Federmeccanica employers' organisation and the Fim-Cisl and Uilm-Uil trade unions. However, the Fiom-Cgil union did not sign the agreement and harshly criticised its provisions. As well as pay increases, the new agreement envisages the creation of a new job classification system, the establishment of a sectoral joint body and some measures on continuing training.

On 7 May 2003, negotiations over the renewal of the metalworking sector collective agreement for the period 2003-6 came to a conclusion, after four months of negotiations. A draft renewal agreement was signed on the employers' side by the Employers’ Association of the Italian Metal-Mechanical Industry (Federazione sindacale dell'industria metalmeccanica italiana, Federmeccanica) - the major metalworking employers’ association - and the National Association of Installation Contractors (Associazione nazionale costruttori di impianti, Assistal), both affiliated to Confindustria. The trade union signatories were the Italian Metal-Mechanical Federation (Federazione italiana metalmeccanici, Fim) affiliated to the Italian Confederation of Workers' Unions (Confederazione italiana sindacati lavoratori, Cisl), and the Union of Italian Metal-Mechanical Workers (Unione italiana lavoratori metalmeccanici, Uilm) affiliated to the Union of Italian Workers (Unione italiana del lavoro, Uil). The Italian Federation of Metalworkers (Federazione impiegati operai metallurgici, Fiom), affiliated to the General Confederation of Italian Workers (Confederazione generale italiana del lavoro, Cgil), did not sign the agreement and harshly criticised the deal. Since 1963, renewals of the metalworking agreement had been signed jointly by the sector's three confederal unions. However, in summer 2001, when only the economic and pay part of the sectoral agreement was renewed, a similar split occurred between Fiom and the other two unions (IT0107193F).

The metalworking agreement is particularly significant in Italian industrial relations since it is regarded as the most important industry-wide accord - covering some 1.3 million workers, 60% of whom are blue-collar workers - and has traditionally acted as a 'pace-setter' for the other sectors.

The negotiations

In autumn 2002, the three sectoral trade unions announced three separate platforms of demands for the renewal of the metalworking agreement. Negotiations over the renewal then started in January 2003. Wage increases were a point on which prominent disagreements emerged. All the unions, though with significant differences among them, demanded wage increases higher than the expected inflation rate, which represents the upper limit of pay rises that can be set through sectoral bargaining, under the incomes policy system introduced by the national tripartite agreement of 23 July 1993 (IT9709212F). The actual inflation rate and the significant gap between this and the expected rate led the unions to demand increases which exceeded this limit (IT0209101N). Moreover, the unions demanded further pay rises, on top of the amount needed to offset inflation: Fiom asked for a distribution to workers of part of the sector's productivity gains; while Fim and Uilm, after the unification of their platforms of demands, requested an additional wage increase for workers employed in firms where there is no company-level collective bargaining. Fiom asked for a flat-rate increase of EUR 135 per month for all workers, equivalent to an average rise of 8.5%. This demand - which was never modified during negotiations - was calculated with reference to the difference between the expected and the actual inflation rate over 2003-4 and to the abovementioned share of the sector's productivity gains. Fim and Uilm, in their joint platform of March 2003, demanded a monthly wage increase of EUR 92 and a supplementary allowance of EUR 250 for workers excluded from decentralised bargaining.

During the negotiations, Federmeccanica always refused to accept a wage increase higher than the expected inflation rate, which corresponded to 4.3% or to an average monthly pay rise of EUR 68, in accordance with the incomes policy rules. However, it expressed its readiness to grant a further wage increase corresponding to the past difference between the expected and actual inflation rate, using the same mechanism which was used when the pay part of the sectoral agreement was renewed in the summer of 2001 (IT0107193F).

Another element which Fim and Uilm considered crucial to a new agreement was the definition of a new job classification system which would correspond more closely to new forms of work organisation and allow for an adequate recognition of workers’ professional skills. For the unions, an explicit commitment to the realisation of such a job classification system within the term of the new agreement was essential. Federmeccanica was willing to start negotiations on the matter, but did not agree on setting a definite deadline for the application of the new system.

After the failure of attempts at unifying the unions’ positions in mid-April 2003, and the expiry of the 'cooling-off period' introduced by the July 1993 tripartite agreement at the end of April 2003, Fim, Fiom and Uilm called separate strike actions, highlighting the distance between their views. The strikes announced by Fim and Uilm have now been cancelled, since the renewal agreement has been signed in the meantime. The strike called by Fiom took place on 16 May 2003 and focused essentially on criticism of the renewal agreement.

The renewal agreement

The main points of the draft metalworking renewal agreement are as follows.

  • Wages. The new agreement provides for an average monthly increase of EUR 90 divided into three instalments: EUR 45 from July 2003, EUR 24 from February 2004, and EUR 21 from December 2004. The last part of the wage increase reflects the gap between the expected and actual inflation rate that can already be foreseen now, and it will be taken into consideration when the pay part of the agreement is renewed for the 2005-6 period. The agreement also provides for a one-off (una tantum) payment of EUR 220 to compensate for the delay in renewing the agreement and the absence of any pay rise over the period January-June 2003. This payment will be made in two instalments: EUR 115 in June 2003, and EUR 105 in January 2004.
  • Job classification. The agreement provides that, during the next four years, a joint working group will be set up by employers and unions to draw up a proposal for a new job classification system, based on that presented by Fim and Uilm. The new system will be implemented by January 2007.
  • Industrial relations. A national joint body (Ente bilaterale nazionale) for the metalworking sector will be set up. The body will provide support to the joint observatories and committees established by the agreement, both at national and territorial level. It will have various sections dealing with different topics. Some first tasks of this joint body have been identified in the area of vocational training (see below).
  • Continuing training. Workers who have left school early will be entitled to extra paid leave, so that they can study for an upper-secondary school certificate. Migrant workers will be entitled to 250 hours of paid leave to attend courses in Italian as a foreign language. One section of the new sectoral joint body will cover training and will collaborate with Fondimpresa- the intersectoral joint body set up by Confindustria, Cgil, Cisl and Uil to manage the funds assigned to vocational training (IT0202103F) - on training projects which concern the metalworking sector.
  • Working time. Some measures to facilitate the use of the existing 'hours bank' (IT9907249F) have been introduced, in order to allow workers to use immediately as time off overtime hours set aside in the bank. Migrant workers will be allowed to use holidays, time off and the overtime hours set aside in the hours bank to spend longer periods in their countries of origin. Moreover, the parties have pledged to start negotiations to harmonise the agreement's provisions with legislative decree no. 66 of 8 April 2003, which transposed the EU Directive (93/104/EC) on working time, as modified by Directive 2000/34/EC (IT0305305F).
  • Labour market reform. Within 90 days of the final enactment of the legislative decrees envisaged by the government's recent labour market reform (IT0303103N), the parties have pledged to define possible modifications of the agreement's provisions to take into account the new legal framework, notably in the field of part-time work, and to examine the issues which the decrees leave to collective bargaining. In the same time-frame, the parties will establish new bargained regulations on fixed-term work, taking into consideration the new legal norms on this issue introduced in September 2001, following an agreement between the social partners in May 2001, which Cgil did not sign (IT0105282F).
  • Telework, privacy and complementary health insurance. The new agreement provides for the creation of specific joint working groups to analyse these issues.

Comments and reactions

Giorgio Caprioli and Antonino Regazzi, the general secretaries of Fim and Uilm respectively, declared themselves wholly satisfied with the accord. The former stated that 'the agreement is consistent with the basic objectives of the platform presented. But we regret the absence of Fiom, although it was predictable.' According to Mr Regazzi, 'this contract accomplishes the task that we set ourselves with the tripartite agreement of 23 July 1993, namely guaranteeing the purchasing power of wages.' The Fim and Uilm representatives also announced that workers' assemblies will take place in all workplaces, starting from 12 May, and that a referendum will be held among their members to allow workers to express an evaluation on the draft agreement signed by the two unions. Moreover, workers who do not agree with the deal will be able individually to forgo the application of the agreement.

Full satisfaction was also expressed by the president of Federmeccanica, Alberto Bombassei, who stressed that the agreement 'is a great achievement because the majority of companies are going through a difficult period'. Furthermore, Roberto Maroni, the minister for labour and social policies, reacted positively, stating his satisfaction with the agreement, but regretting that Fiom refused to sign. The minister expressed the hope that the split in the unions’ ranks will 'not preclude continued dialogue on reform of the pensions system [IT0305102N] and implementation of the Biagi Law'.

Obviously, the reactions of Fiom and Cgil were very different. For the general secretary of Cgil, Guglielmo Epifani, the agreement not signed by Fiom 'is a very serious matter and a defeat for workers as regards both normative contents and pay'. According to Fiom, the agreement does not protect the purchasing power of wages and worsens a number of regulations, namely on training and 'atypical' work. Gianni Rinaldini, the general secretary of Fiom, claimed that the true objective of the accord is the 'total liquidation of the industry-wide agreement' and he does not rule out, in parallel with strike and mobilisation initiatives, recourse to the Constitutional Court (Corte Costituzionale) in order to determine whether it is possible 'for minority unions to sign agreements which apply to everyone'. A controversial issue which has been raised by the renewal agreement relates to union representativeness and the possible approval of the deal by means of a referendum among all workers, which is strongly supported by Fiom. This latter issue caused significant divisions between Fiom and the other unions even during negotiations.

Commentary

The split between the unions on the renewal of the metalworking agreement could perhaps have been expected since the autumn of 2002, when Fim, Fiom and Uilm decided to present separate platforms of demands. Nonetheless, the actual realisation of this split represents a shock for Italian industrial relations, given the significance, in part symbolic, of this sector for the trade union movement. However, in the four months of negotiations there were no particular initiatives to avoid this outcome, neither through the intervention of the confederations, nor through determined actions on the part of the bargaining parties. It is noteworthy that such a division in the unions’ ranks, which exists in certain areas between the confederations on a number of topics being debated with the government, is not at all widespread at sectoral level, where platforms, negotiations and the conclusion of agreements are usually united. Explaining this anomaly in the metalworking sector is not easy. In a sense, it could be due to the symbolic importance of this industry, which has concentrated the effects of the different points of view of the confederal unions. It is in this sector that divisions have taken their most extreme and disruptive form; a somewhat surprising situation, since it is in the metalworking sector that the most advanced forms of united action were achieved in the past.

Fiom's position seems to reflect two main viewpoints:

  • a defence of the central role of sectoral agreements in protecting workers, in terms of both wage levels and regulations on other issues, and, as a consequence, opposition to any radical revision of the bargaining structure that would lead to stronger decentralisation, notably at territorial level - an option which, by contrast, is supported by Cisl; and
  • a stress on the issue of union representativeness, a particularly sensitive theme in a sector where Fiom alone accounts for more than half of all union members. This argument refers to an important issue, but it may lead to a line of action that, if taken to its extreme consequences, can only cause a further worsening of the climate of Italian industrial relations, not least because, for the time being, no interventions on representativeness, as have occurred in the public sector (IT9709311F), seems to be viable.

Besides these two points, there is also clear opposition by Fiom (and Cgil) to the government’s recent initiatives in the fields of labour market and employment regulation. This is indicated by its criticisms of the new metalworking agreement’s provisions for negotiations on the application of the legislative decrees on fixed-term work and working time, and of further decrees to be issued in the framework of the so-called 'Biagi Law'.

This situation may lead to a widening of the split in the unions’ rank, because it fuels tensions among the various organisations, and eventually it may weaken the unions. Such a prospect does not appear to be negative for the unions alone, as it may significantly hinder the regulatory ability of industrial relations and increase conflict levels - outcomes which would probably be negative for the social partners and the government alike. There is no lack of occasions for united negotiations and action at both confederal and sectoral levels, as shown by the intersectoral negotiations on competitiveness and economic growth currently under way (IT0303102N). For the trade union confederations, an especially important area of negotiations with the government at present relates to pensions reform, an area where the unity among the unions seems to be particularly strong (IT0305102N). Maybe, if there is a common will to keep the Italian industrial relations system united, starting from these negotiations and a possible agreement, the dialogue among the unions and with the government could make a new beginning. (Diego Coletto and Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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