Recent developments in Fiat’s industrial relations

Two agreements signed at Fiat’s Pomigliano and Mirafiori plants in June and December 2010 have started an important transformation phase in industrial relations at the carmaker and triggered a nation-wide debate over the reform of the Italian bargaining system. In late June 2011, these agreements also contributed to the conclusion of an important intersectoral agreement on trade union representativeness and the enforceability of company agreements.

Background

Agreements signed at Fiat’s Pomigliano and Mirafiori plants, in June and December 2010 respectively, marked an important shift in the company’s industrial relations system.

However due to divisions among the trade unions, the company could have faced problems enforcing the agreements. The Italian Federation of Metalworkers, affiliated to the General Confederation of Italian Workers (Fiom-Cgil), refused to sign the Pomigliano deal.

As a result, Fiat devised a new strategy, creating a new company for each plant and negotiating new first-level company agreements outside the representational domain of the employer organisation, the Confederation of Italian Industry (Confindustria).

According to the Workers’ Statute (Art. 19), only unions that sign such agreements can represent employees in the workplace. Fiom-Cgil must either sign the new company-level agreements, or lose its right to represent their workers (IT1007029I).

Further developments at Fiat

Since January 2011 initiatives at Fiat have centred round extending its success in negotiating with workers at its Mirafiori factory – the so-called ‘Mirafiori model’ – to other plants and looking at how company agreements can be enforced.

In January, despite union opposition, workers at Mirafiori voted to accept longer shifts, shorter breaks and restrictions on their right to strike in return for the promise of more than €1 billion of new investment in both Fiat and Chrysler and the promise of new vehicles for the plant’s assembly line.

Negotiations for a similar agreement were started at the former Bertone plant (now OAG, Officine Automobilistiche Grugliasco), a recent acquisition of the Fiat Group. Here Fiom-Cgil represents more workers in the plant than any other union.

However, as the Fiat acquisition and the promised €500 million investment represented the only way out of bankruptcy for a company that had been covered by the Wage Guarantee Fund for around nine years, and that last produced a car in 2006, the Fiom-Cgil representatives decided to go against its national union secretariat decided to support the deal. Eventually, the agreement was approved in early May 2011 by an 88% majority in an employee referendum with a turnout of 92.9%.

Union challenges agreements in court

Of particular concern for Fiat are lawsuits brought by Fiom-Cgil challenging the enforceability of the agreements. In one, the union has challenged the Pomigliano deal, claiming that the establishment of a new company should be regarded as a firm branch transfer. This would require Fiat to stick to all previous collective agreements.

On 16 July 2011, the Turin labour court decided that the Pomigliano agreement was legitimate, but at the same time it ruled that Fiat must allow Fiom-Cgil to establish a company-level structure even if it did not sign the agreement. The result of excluding Fiom-Cgil from company representation was considered by the court to be an ‘anti-union’ practice and in contravention of Article 28 of the Workers Statute.

While Fiom-Cgil has said it will continue to support individuals who bring lawsuits challenging dismissals caused by the establishment of the Pomigliano company, Fiat has declared it will oppose these first instance rulings. Company sources say investment in the new companies may be temporarily suspended while Fiat observes the court’s ruling and waits for full assessment of its consequences.

Debate on industrial relations system

Federmeccanica, the Confindustria-affiliated metalworking employers’ association that signs the industry-wide agreement, has developed several responses to provide a regulatory framework that is conducive to making adjustments at company level.

  • In late September 2010, it introduced a specific clause in the industry-wide agreement to regulate ‘hardship’ clauses at company level, with the intention of derogating national-level provisions. As with the 2009 accord, Fiom-Cgil did not sign this additional clause;
  • Then it began a bargaining round to discuss the possibility of creating an agreement specifically for the automotive sector which would essentially cover Fiat, thereby making the conclusion of first-level company agreements no longer necessary;
  • Finally, in January 2011, Federmeccanica proposed making it possible for companies to substitute industry-wide agreements with a company-level agreement, so that in particular situations first-level deals could replace the sectoral agreement.

This last proposal was criticised by all unions since they believe that the present two-tier bargaining structure, especially with the introduction of ‘hardship’ clauses, provides all the necessary flexibility to adjust to company-level conditions. The discussion over the ‘auto industry-wide’ agreement continued and new bargaining sessions are envisaged in autumn 2011.

The issue of representativeness was addressed as a priority by the social partners and an intersectoral agreement was signed on 28 June 2011 by Confindustria, the General Confederation of Italian Workers (Cgil), the Italian Confederation of Workers' Unions (Cisl) and the Union of Italian Workers (Uil). This agreement is regarded as a first step to closing the split among the unions and it covers representativeness at both industry and company level, as well as the general applicability of company agreements signed by unions representing a majority of the workforce.

Roberto Pedersini, Università degli Studi di Milano

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