Fiat leaves Confindustria and signs new company agreement

With effect from 1 January 2012, Fiat withdrew from all existing collective agreements and left the Confindustria representation system, which governs Italian industrial relations. In December 2011, the Federation of Metalworkers (Fiom) left negotiations with Fiat on a new group-level agreement when Fiat declared the basis for talks would be the Pomigliano agreement of 29 December 2010, which Fiom had refused to sign. The new first level agreement was signed on 13 December 2011.

Background

Since summer 2010, when Fiat first expressed doubts about its capacity to fully implement the provisions of the June 2010 Pomigliano agreement (IT1102019I), the company has taken a number of steps which have led to the progressive separation of Fiat industrial relations from the traditional Italian bargaining structure.

Because the Italian Federation of Metalworkers (Fiom), affiliated to the General Confederation of Italian Workers (Cgil), refused to sign the Pomigliano agreement, enforcing it could have been problematic for Fiat.

With the Mirafiori agreement of December 2010, Fiat chose to regulate labour relations through first-level plant agreements, thereby abandoning the traditional reference point of the metalworking industry-wide agreement and the practice of second-level supplementary collective agreements at company and plant levels (IT1102019I, IT1007029I).

In this way, Fiat decided not to take advantage of the possibility to introduce ‘opening clauses’ at decentralised level, as envisaged by the agreement, which was signed in September 2010 by two of the three major sectoral trade union federations; the Italian Federation of Metalworkers (Fim), affiliated to the Italian Confederation of Workers’ Trade Unions (Cisl), and the Union of Italian metalworkers (Uilm), affiliated to the Union of Italian Workers (Uil). Federmeccanica, the metalworking employers’ association affiliated to the Confederation of Italian Industry (Confindustria), also signed the agreement.

Fiat also chose not to directly support the attempts by Federmeccanica and the trade unions to set up a sub-sectoral agreement for the auto industry that they hopedwould better reflect the specificities and needs of automotive companies.

Fiat continued along this autonomous track by abandoning Confindustria’s representation system at the end of September 2011 and announcing, in late November 2011, its unilateral withdrawal from all existing collective agreements, and its objective of introducing new collective agreements by the end of 2011.

Fiat leaves Confindustria

On 30 September 2011, Fiat CEO Sergio Marchionne sent a letter to Emma Marcegaglia, President of Confindustria, explaining Fiat’s decision to leave the representation system of the major Italian employers’ confederation.

Mr Marchionne expressed his appreciation for the intersectoral agreement of 28 June 2011 and for the newly introduced possibility to derogate legislation and industry-wide collective agreements by generally binding decentralised deals, as provided by article 8 of decree law no. 138/2011 (in Italian, 735Kb PDF).

He said: ‘This new reference framework, in a particularly difficult situation for the world economy, would have allowed all Italian firms to face international competition under less unfavourable conditions than their competitors.’

However, Mr Marchionne maintains that the debate over the actual effectiveness of article 8, fuelled by the addition to the text of the 28 June 2011 intersectoral agreement specifying that ‘the topics of industrial relations and collective bargaining are autonomously determined by the bargaining parties’ (IT1108029I), increases uncertainty about the potential of these recent developments to enhance work and organisational flexibility.

With the aim of operating in a less uncertain regulatory framework, Fiat confirmed its decision to leave the Confindustria representation system from 1 January 2012 – an intention made known to Confindustria in a letter from the Fiat CEO dated 30 June 2011, in which he said the company may continue to collaborate with some of Confindustria’s territorial structures, such as the Turin employer association.

Fiat will use its freedom of action to take full advantage of the new legislative provisions, but Mr Marchionne said:

The relationships with employees and trade unions will continue without endangering any worker rights, in full respect of the respective roles, as envisaged by the agreements for Pomigliano, Mirafiori and Grugliasco.

Fiat opens negotiations for group-level deal

On 21 November 2011, Fiat sent a communication to all relevant trade union organisations at both national and territorial levels to inform them about its unilateral withdrawal from all collective agreements and practices from 1 January 2012.

Those organisations were:

  • The Italian Federation of Metalworkers (Fim);
  • The Federation of Metalworkers (Fiom), affiliated to the General Confederation of Italian Workers (Cgil);
  • the Union of Italian metalworkers (Uilm);
  • the Autonomous Trade Union of Metalworkers and Related Industries (Fismic); and
  • the General Union of Italian Workers, Metalworkers (Ugl Metalmeccanici), affiliated to the General Labour Union Ugl).

The step was taken ‘in view of a reorganisation and harmonisation of collective contractual provisions at company and territorial levels which have been introduced in different times and in order to make them coherent and compatible with competitiveness and efficiency’.

The company also informed unions that:

meetings will be organised with the aim of assessing the impact of the withdrawal and for the possible negotiation of new collective agreements on union and work issues which are relevant at company-level, in order to ensure individual terms and conditions of employment which shall be overall equal or better than those defined by the previous provisions.

Among the expiring agreements expressly mentioned in the communication is the industry-wide agreement for the metalworking sector and all company accords, in place since 1971.

The company explained the withdrawal as a technical measure which followed the decision to leave the Confindustria representation system.

According to Fiat CEO Sergio Marchionne: ‘It is necessary to set aside years of collective bargaining which is now obsolete and no longer in line with the present situation.’

At the same time, he said:

Fiat commits itself to define, as soon as possible, with the trade unions, more modern collective agreements capable of ensuring the flexibility and manageability of production plants as well as guaranteeing workers better working conditions and adequate economic rewards.

The negotiations and the new agreement

Trade unions reacted in different ways to Fiat’s announcement, even though there was an underlying criticism of its unilateral action.

Fim-Cisl and Uilm-Uil declared their willingness to sit at the bargaining table with a view to quickly defining new collective agreements.

Fiom-Cgil was much more critical of the company decision and organised strikes and assemblies in all Fiat’s plants, to discuss the consequences for workers.

On 29 November 2011, negotiations began to define new collective agreements, and were held at the Turin employers’ association.

Fiat declared that the basis for the new agreement would be the plant-level agreement signed on 29 December 2010 for Pomigliano. Fiom, however, refused to use this agreement as a reference for negotiations and abandoned the bargaining table in early December.

The new agreement was eventually signed on 13 December 2011 by Fiat company management and Fim, Uil, Fismic, Ugl Metalmeccanici and Fiat’s middle management association. The agreement covers some 86,000 workers at the Fiat group in Italy employed by both Fiat Spa (the automotive group’s division) and Fiat Industrial Spa (which produces and sells trucks, commercial vehicles, buses, tractors and agricultural and construction equipment).

The deal covers 2012 and includes:

  • common group-wide minimum wage rates, which incorporate the consolidation of a number of existing fixed supplements introduced by the terminated collective deals;
  • an increase in the Saturday overtime pay premium from 50% to 60%;
  • special yearly bonuses for achievements in the implementation of the World Class Manufacturing system (€200 bonus for ‘silver-level’ plants and €500 for ‘gold-level’ plants);
  • an extra four-year seniority pay rise, which adds to the existing five bi-annual ones;
  • a 0.5 percentage point increase in the company’s contribution to the employees’ supplementary pension schemes;
  • a one-off bonus of €600 for all employees, including those in the Wage Guarantee Fund, to be paid in 2013;
  • a shortening of break periods from 40 to 30 minutes. The difference will be reimbursed in the salary;
  • an increase in the number of overtime hours the company can organise unilaterally from 40 (as exists in the sectoral metalworking agreement) to 120 hours;
  • a standard rota system that organises production working time over 18 shifts on 6 days per week;
  • stricter measures on absenteeism with the aim of reducing it to 3.5%.

Another important provision is the ‘responsibility clause’ in which the signatory trade unions commit to fully implement the agreement provisions. In case of non-compliance, the company will be freed from its obligations regarding the implementation of the check-off system for union dues and the provision of paid time-off for union activities outside the company.

The most controversial aspect of the deal will probably be the decision to organise trade union representation through plant-level union structures established in accordance with the Workers’ Statute of 1970. In fact, after a modification introduced by a peoples’ referendum in 1995, only organisations signatory to a collective agreement applied in the workplace can set up a representation structure.

The practical consequence of this will be that Fiom, which did not sign the new agreement, will not be allowed to have company-level representatives.

Roberto Pedersini, Università degli Studi di Milano

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