Debate on bargaining reform delays dialogue

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In late 2004, the resumption of talks on competitiveness and development between Italy's Confindustria employers' confederation and the three main trade union confederations - Cgil, Cisl and Uil - was postponed while the unions attempted to resolve their differences. By December, the unions had yet to reach a joint position on some of the issues under discussion, in particular reform of the bargaining system, which Cisl regards as essential and Cgil as unnecessary.

Talks among the social partners over an agreement to boost Italy’s competitiveness and economic development started in July 2004. The parties involved were the main employers' confederation, Confindustria, and the three main trade union confederations - the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacato Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil). However, Cgil walked out of the negotiations, because it was not willing to discuss a reform of the current collective bargaining structure proposed by the employers (IT0408106N). Subsequently, each union confederation held an internal review and then created an ad hoc interconfederal committee, with the aim of reach a joint position on reform of the bargaining system, and then resuming talks with Confindustria on competitiveness and development in the autumn. A second committee, moreover, was set up to work towards an agreement among the unions on the rules for trade union democracy.

However, debate among the three union confederations acquired broader dimensions, so that the two committees delayed the start of their work. Confindustria consequently decided to postpone a meeting scheduled for 12 October. Savino Pezzotta, the general secretary of Cisl, has suggested that the negotiations will probably resume in January 2005. Nevertheless, dialogue between Confindustria and the unions has continued concerning those issues on which the two sides are in closer agreement, such as policies to relaunch the South of Italy - which led at the end of October to the signing of a joint document to be submitted to the government (IT0411107F) - and a reduction of the 'Irap' tax on researchers, in order to encourage firms to invest in research and innovation.

At various meetings held in recent months among the leaders of the union confederations, the main issues addressed have been: reform of the bargaining system established by the national tripartite agreement of 23 July 1993 (IT9709212F); the relationship between trade unions and politics; and the measures to adopt in opposing the budget law proposed by the government (IT0408105N).

Reform of the bargaining system

There are two main aspects to debate over reform of the bargaining system. The first is rationalisation of the categories involved in national-level bargaining at sector level. At present, there are 270 sectoral collective agreements in force, as registered by the National Statistics Institute (Istituto nazionale di statistica, Istat) and 348 as registered by the National Council for the Economy and Work (Comitato nazionale per l’economia e il lavoro, Cnel). The three union confederations agree that the system must be simplified and they envisage two strategies to that end: rationalising the system in terms of branches of industry; and rationalising it in terms of the 'value chain'.

The second issue is striking a new balance between the national sectoral level and the company (or territorial) level. Although all three confederations want the current two-tier system (ie articulated bargaining) to continue, it is on this point that they are most at dispute.

  • For Cgil, reform of the bargaining system is not a major priority. Nevertheless, it issued a document at the end of September 2004 calling for a strengthening of the national sectoral level, which should establish pay increases on the basis of the forecast rate of inflation (ie very close to future price rises), and also calling for a new set of rules on recouping divergences between the forecast and real inflation rate. The national agreement should also establish the proportion of pay rises linked to the sector’s productivity. The second level of bargaining may be the company or territorial (ie local) level. However, territorial-level bargaining should not be considered as either additional or alternative to company-level bargaining (which is still the priority option), but as an instrument with which to undertake decentralised bargaining everywhere.
  • The new system proposed by Cisl would shift the centre of gravity towards the second bargaining level, which would cover all workers. The national level should protect the purchasing power of wages, based on a forecast rate of inflation as close as possible to the real rate. Recovery of any difference between the two rates would be left to the second bargaining level, as would the productivity-linked part of the wage. The duration of the economic/pay part of sectoral agreements would be extended from two to three or four years. Compared with the provisions of the July 1993 intersectoral agreement, moreover, 'full legitimacy should be given to territorial bargaining, also indicating a numerical threshold for it'.
  • Uil is in favour of renewal of the system introduced in 1993. According to its general secretary, Luigi Angeletti, the assumptions on which the 1993 agreement was based no longer exist. If wages do not increase, he claims, it is the fault of the bargaining model. Uil also maintains that the weight of second-level bargaining should be increased, and it proposes a suspension of taxation on wage increases. Uil also argues that the agreements whose renewals are currently being negotiated (for banking, metalworking [IT0412205F] and the civil service) cannot be renewed under the old rules, and it has declared itself ready to cancel them formally, if necessary.

The position of Confindustria is the same as it was in July 2004: the bargaining system should be altered in order to meet firms’ adaptability needs, and the number of national sectoral agreements should be reduced.

Relationship between unions and politics

Debate on the relationship between unions and politics arose following the publication of a document (on themes such as peace, the economy, work and the welfare system) that the general secretary of Cgil, Guglielmo Epifani, sent to the future leader of the opposition centre-left coalition, Romano Prodi, as Cgil’s contribution to drafting a hypothetical future government programme. Cisl and Uil reacted critically to the document, and the general secretary of Cisl, Savino Pezzotta, asked for and obtained a clarification meeting with the other two union confederations. After discussion of the relationship between unions and politics, the three general secretaries announced that an interconfederal seminar would be held on the theme in January 2005.

General strike

Cgil, Cisl and Uil organised a four-hour general strike on 30 November in protest against the economic and financial plans of the centre-right government (IT0412103N). They also considered a number of initiatives to be taken after that date, particularly in regard to the South of Italy and crisis-hit industries.


The outcome of the work of interconfederal committee on reform of the bargaining system will have a decisive bearing on a possible return to concertation in Italian industrial relations. The crucial question concerns the weight that the national/sectoral and the company (or territorial) level should have in defining wages and working conditions. Eleven years after the July 1993 intersectoral agreement, various commentators and experts have concluded that the system introduced by that agreement has worked well. Nevertheless, they also stress the limited development of company-level (and territorial) bargaining in terms of both coverage and content, compared with the sectoral level, which continues to operate very efficiently. The lack of data on both company-level and territorial bargaining prevents official estimates from being made; however, it is calculated that, in 2003, only 10% of firms were covered by second-level bargaining (25% of those with more than 10 employees). In this regard, Cgil, Cisl and Uil, although they differ on how competences should be allocated between the two levels, seemingly agree that all workers should be covered by the decentralised level, whether in-company or territorial. However, the confederations are still far from achieving a united position, and considering that such a position is required for discussion with Confindustria, any agreement on reform of the bargaining system is still a long way off. (Edoardo Della Torre, Ires Lombardia)

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