Bargaining reform is key issue at Cisl congress

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In July 2005, Cisl, one of Italy's three main trade union confederations, held its 15th national congress in Rome. Delegates discussed a number of issues of crucial national importance, including the economy, work, industrial relations and reform of the welfare state. The main topic of debate was restructuring of the current collective bargaining system. Cisl has proposed a reform of the system and agreement on the issue will now be sought with the other two union confederations (as confirmed by the Cgil confederation at the congress). The congress also saw a renewed initiative by Cisl to establish a timetable and methods for the reorganisation of industrial relations in Italy, in which Cisl would have a leading role.

For more than a decade, Italy's incomes policy and collective bargaining system have been regulated by the national tripartite agreement of 23 July 1993 (IT9803223F). Experts, public institutions and the social partners still generally agree that the agreement has worked well, providing the basis for the sound management of bargaining and wage policies. However, changes in the general conditions that gave rise to the agreement have sparked debate on revision of the system established in 1993. In particular, the trade unions have for some time criticised the current centre-right government for abandoning 'social concertation' with the social partners on important economic and social issues and an acceptable incomes policy. They maintain that the impoverishment of fixed income-earners (employees and pensioners) due to rising prices has not been remedied by increases in wages and pensions.

Although their analyses and appraisals are similar, the unions propose different solutions for a situation that they regard as critical. The General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil) does not regard changes to the 1993 agreement as being of priority importance; rather, its provisions should be applied with greater rigour. Both industrial relations and wage adjustments to inflation, Cgil claims, are being damaged by the long delays before many national sectoral collective agreements are renewed on their expiry - which is also the position of the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil). However, Cisl believes that the best way to achieve an incomes policy that improves pay levels and the distribution of wealth is to modify the 1993 agreement, which it regards as no longer able to safeguard the purchasing power of wages and pensions. Uil has taken up a position closer to Cisl’s than Cigl’s by coming out in favour of revising the provisions introduced in 1993 (IT0412306F).

These differences of opinion among the unions - indeed there has been talk of a split among the confederations - do not only concern changes to the bargaining system. They also extend to the recent labour market reforms introduced by the government in June 2003 with enactment of the 'Biagi law' (IT0307204F). Whilst Cgil is adamantly opposed to the reforms, Cisl and Uil have been decidedly more moderate in their reactions and have indeed endorsed some provisions of the Biagi law and called for completion of the reform. It was on reform of the labour market and the debate preceding it that the unions were divided in 2002, with the result that a memorandum of understanding on the labour market, the tax system and the South of Italy (known as the Pact for Italy) was signed in July 2002 by the government and the other main social partners but not by Cgil (IT0207104F).

However unity has been recently restored to trade union action by the government’s enactment in July 2004 of a law reforming the pensions system (IT0409101F). In this case, the three confederations have been unanimous in their opposition to measures that they regard as unfair.

Another area in which the trade unions converge in their analyses (if not in the solutions proposed, which differ among the three confederations) is the backwardness of Italy’s labour market. Given the confederations’ view of work as the central component of citizenship, Italy still suffers from a number of critical weaknesses that they believe are not likely to improve, but instead to deteriorate further. These perceived weaknesses are the following; high rates of unemployment, especially in the South; employment rates among the lowest in the Western world; an excessive amount of irregular work, with one of the highest percentages in Europe; a decrease in the number of job-seekers and people available for employment (a relatively recent phenomenon that mainly involves women in the South); and a low supply of (and demand for) skilled labour, which testifies to a productive system with scant propensity to innovate.

Cisl congress

In this context, where appraisals of the country’s economic and social conditions both unify and divide the trade unions, the 15th national congress of Cisl was held in Rome under the slogan 'Participation, development, solidarity'. The four-yearly congress (IT0107191N) was held from 5 to 8 July 2005 and was attended by more than 2,500 delegates. The topics discussed were those at the centre of current political debate in the country: reform of the pensions system; reform of the taxation and educational systems; incomes policy; concertation; and reform of the bargaining system and the labour market.

Concertation and incomes policy

Cisl is convinced that it is necessary to return to social concertation and the consequent incomes policy. Concertation, it maintains, is essential for the coordination of economic, wage, pension and tax policies, as well as to promote development and greater social equality. For these reasons, Cisl proposes to the government (whichever party coalition wins the forthcoming elections in 2006), regional administrations and social partners a pact that sets priorities decisive for the country’s development - covering growth, innovation, the South and human resources - and that safeguards the purchasing power of wages and pensions. This simplified form of concertation would be restricted to these matters and would be subject to periodic review during the term of office of the next government. This system, Cisl says, would enable 'abandonment of the wearisome practice of holding talks on budget law after budget law and which would instead set shared goals to pursue'.

Collective bargaining

According to Cisl, reform of the bargaining system is an unavoidable necessity. It regards the July 1993 agreement as no longer able to safeguard the real purchasing power of the incomes from dependent work owing to the lack of application of decentralised bargaining. It should therefore be modified in order to remedy the excess of 'bargaining centralism' that prevents consolidation of second-level (company and local) bargaining and the consequent improvement of pay levels and income distribution.

Cisl believes that both bargaining levels should be given priority, with a strengthening of the second - company or territorial - level. Industry-wide agreements, which would continue to guarantee inflation-linking of pay and general protection, should be incorporated into a limited number of broad national-level contracts according to the production chain (all the unions agree on the need for simplification and consolidation, though Cigl would prefer rationalisation on a sectoral basis). Decentralised agreements should be applicable at all levels (firm, employing body or area). On agreement with the unions, a firm could either adopt the relevant territorial agreement (district agreement) or negotiate its own supplementary company-level agreement (company-level bargaining). The main purpose of decentralised bargaining would be to share the benefits of company or territorial productivity more equably among all workers, linking pay rises to the productivity and profitability of individual firms and/or those operating in the sector’s territorial areas covered by bargaining. Guarantees that agreements will be fully implemented should be introduced in branches of industry consisting mainly of small-sized crafts firms, as well as in fragmented sectors with diffuse workforces. In services, the public administration and the education system, wages should be linked to quality and safety targets.

In his closing speech, the Cisl general secretary, Savino Pezzotta - who was re-elected at the congress - set a timetable for reforms. By September, talks should begin among the trade unions in order to draw up a proposal to be presented to the government and employers’ associations as the basis for negotiations in October. If, by these dates, the unions have not reached agreement, Cisl 'will consult all its members and illustrate and discuss its proposals, without resigning itself to immobilism'.

Worker participation in company management

Besides consolidation of decentralised bargaining, so that the productivity achieved by companies is redistributed and does not become solely rent and profit, Cisl maintains that forms of worker participation in corporate decisions should be developed and extended. An appropriate strategy for such worker participation would consist of four components, which should be fostered and extended simultaneously:

  • organisational participation, based on the creation of joint bodies with orientation, control and decision-making powers on issues related to the organisation of work;
  • financial participation, seen as an instrument of economic democracy with which to affirm the role of labour in firms’ governance, based on forms of employee shareholding and supplementary pension schemes;
  • strategic participation, as defined by the EU, comprising information and consultation rights on company decisions, prefiguring the right of workforce representatives to influence corporate decision-making: in this regard. Further, the role of the European Works Councils (EWCs) as transnational structures should be boosted; and
  • corporate social responsibility (CSR), denoting a willingness by the company to establish positive relationships and dialogue with the various parties that interact with the company for economic and social purposes ('stakeholders').

Labour market

The congress documents describe the Biagi law - with which the government enacted labour market reforms in June 2003 - as 'incomplete'. Cisl does not want the law to be repealed, but instead modified by completion of those parts which the Pact for Italy recommended should give 'bargaining a pre-eminent role in determination of working conditions'. Cisl proposes the creation of a universal set of protections for all 'non-standard' workers in flexible employment. These protections should be put in place by means of bargaining and a new Workers’ Statute that extends the current system of 'social shock absorbers' (measures that cushion the effects of restructuring and redundancies - IT0205204F) and supplements rather than replaces the current Workers’ Statute (Law 300 of 1970). The idea is to govern 'agreed flexibility' through bargaining and the law, in order to introduce a satisfactory system of protections that prevents 'flexibility deteriorating into precariousness'.

Pensions system

According to Cisl, the reform of the pensions system undertaken by the government in July 2004 was unjust and rigid. It should therefore be modified so that equity is guaranteed and job-exit flexibility is reintroduced for workers with scant job protection and in strenuous or hazardous jobs. As regards eligibility for pensions, Cisl proposes that a retirement threshold should be established that combines years of contributions with the worker’s age. It also asks the government to introduce a single social security pension rate for all workers, whether dependent or independent, and to give pensions real protection against inflation. As far as supplementary pensions are concerned, Cisl stresses that priority should be given to collectively agreed pension funds, together with the effective 'payability' of supplementary social security in the public sector.

Bipartite bodies

In Italy, bipartite bodies run jointly by workers’ representatives and employers operate in various sectors (such as industry, crafts, cooperatives, commerce, tourism and temporary agency work) and deal with issues of prime importance, such as management of the social shock absorbers and continuing training (the latter via recently created multisectoral funds - IT0202103F).

Cisl affirms that bilateralism should be strengthened and extended to all areas of the country and to all categories, not only in management of the social shock absorbers and continuing training but also in the direct management of the labour market. The aim should be to match labour demand and supply on a bipartite basis through analysis of training needs, the definition of occupational profiles, and the organisation of retraining schemes and job counselling services.

Relationships among the unions

The founding value of Italian trade unionism is regarded as having been unity, which in the past has been pursued by the confederations in various ways. Today, Cisl rejects the 'rhetoric of unity' and prefers to talk of union pluralism - by which it means acceptance of the diverse cultures of workers. For this reason, the Cisl congress called for confederal trade unionism to adopt a 'convergent pluralism' where dialogue and mediation centre on compromises around shared goals.

Participation by Cgil and Uil

The general secretaries of Cgil and Uil made speeches to the Cisl congress that largely concerned the reform of the collective bargaining system advocated by Cisl. The general secretary of Uil, Luigi Angeletti, stated that 'without reform of the trade union and bargaining model we will be unable to reach the largest number of workers possible and we will condemn ourselves to becoming a reservation, with the risk of increasing marginalisation'. Also of great interest was the speech by the Cgil general secretary, Guglielmo Epifani, who reaffirmed his organisation’s willingness - despite increasing scepticism about reform - to hold talks with Cisl and Uil in order to draw up a proposal on changing the bargaining structure to be submitted to workers for appraisal by autumn 2005. For Mr Epifani - and herein lies Cgil’s differences with Cisl - the 1993 agreement 'should be modified but not dismantled'. In this regard, according to Mr Epifani, 'the joint union committees on reform of contracts and trade-union democracy should resume their work'.

Commentary

The Cisl congress has indubitably marked an important moment in Italian industrial relations, which have recently been crippled by the government’s political difficulties and changes in the executive of the General Confederation of Italian Industry (Confederazione Generale dell’Industria Italiana, Confindustria) employers' confederations. Public institutions and the social partners seem to be waiting for concertation policies to be relaunched after the general election of 2006, which according to the polls will produce a government formed by a different political majority. By directing public attention to such key issues as a change to incomes and concertation policies, modification of the recent reform law on the pensions system, reorganisation of the labour market and restructuring of the bargaining system, Cisl has placed the need to renew and revitalise industrial relations at the top of the political agenda. Simultaneously, the congress has reaffirmed Cisl’s role as the unions’ main interlocutor with employers and the government, placing it at the centre of political mediation as the driving force in reaching acceptable compromises. The image is that of a modern and proactive organisation, striving for change and not resigned to immobilism.

The main issue to address is how to relaunch collective bargaining, with particular regard to extending and consolidating the decentralised level. This also seems due to a determination to strengthen Cisl’s presence in workplaces, to recruit new members, and to exploit the potential reservoir of members that decentralised bargaining could bring closer to the unions.

However, given the failure to strengthen the second, decentralised bargaining level over the past decade (in 2003, only 10% of firms applied a decentralised agreement), Cisl has underestimated the bargaining structure defined by the agreement of 23 July 1993, the defect of which is that it relies excessively on national-level bargaining to the detriment of the local or company level. Too little account is taken of the inability of unions to achieve the signing of second-level agreements in areas of the country with low levels of entrepreneurial activity and/or unionisation.

The second important issue is the value to be given to worker participation, mainly in its organisational and financial forms, and the joint regulation of the labour market through labour intermediation, management of the social shock absorbers, and continuing training on a bipartite basis. Cisl seems to lean towards a model of industrial relations grounded on 'co-management', following the German example, with the direct assumption by labour organisations (in bipartite bodies that also include employers’ representatives) of tasks previously undertaken mainly by the state, and only more recently, and partly, by private actors.

To conclude, the 15th Cisl congress seems to have opened a new phase in relationships among the trade union confederations and more generally between the social partners. The three confederations seem to have found a shared position on reform of the collective bargaining system to be submitted in autumn 2005 for the approval of workers and then the employers’ associations (IT0508206F). The unions thus seem to have found a new unitary framework (of 'convergent pluralism' as Cisl calls it). However, it cannot be taken for granted that this framework will hold together when the above issues come up for discussion. Nevertheless, the bases have been laid for negotiations between the social partners to design an updated model of industrial relations, the present paralysis of which has hampered improvement of working conditions and firms’ competitiveness. (Livio Muratore, Ires Lombardia)

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