Solidarity contract saves jobs at major steelworks

Italian steel maker Ilva, which has been at the centre of a court battle over the environmental impact of its Taranto plant, has requested a wage guarantee fund for 6,507 workers at risk of redundancy. Following consultations with the government, the company and trade unions have agreed on a solidarity contract that will reduce the working time of all workers for two years. The company has agreed that at the end of this period, it will not proceed with collective redundancies.

Background

Ilva, which produces and processes steel, employs 14,512 people in five Italian production plants. The company’s most important production site, which employs 11,457 people, is in Taranto, Puglia, in southern Italy, and is one of the biggest steel production plants in Europe.

The management of Ilva has been accused of triggering in Taranto an environmental disaster with criminal intent, food poisoning, dumping of dangerous substances and atmospheric pollution. In July 2012, the Italian courts ordered the confiscation of six plants in the Taranto complex together with many tonnes of products. Furthermore, the courts ordered the arrest of the top management, who were accused of being involved in the alleged corruption of representatives of certain institutions in order to cover up the environmental and health risks caused by steel production plants at Taranto.

Production allowed to continue

The decision of the Italian court, however, was neutralised by the so-called ‘save Ilva’ decree (decree law of 3 December 2012, transposed into law 231 of 24 December 2012). Through this decree, the government approved an Integrated Environmental Authorisation (AIA), which makes it possible for Ilva to restart production, provided it carries out an environmental reclamation of the industrial site. A guarantor for the implementation of this authorisation and technicians from the Institute for Environmental Protection and Research (ISPRA) have been appointed to supervise the reclamation and ensure Ilva follows the instructions of the authorisation.

However, magistrates in Taranto have contested the government’s action and have made an official complaint to the Constitutional Court regarding conflict between the authorities and the unconstitutionality of the decree. The Constitutional Court has recently declared that both complaints are not valid, and therefore Ilva can continue production.

Environmental reclamation

In February 2013, Ilva requested an extraordinary wage guarantee fund (CIG) for 6,507 workers. The CIG is a special public fund used to protect workers’ income in case of company reorganisation, restructuring or conversion, or if a company is in economic difficulties. The CIG makes up the pay of employees affected by layoffs or short-term working, by up to 80% of the lost pay. The extraordinary CIGs for restructuring processes was requested by Ilva as a result of the plants being blocked for the next two years, in order to carry out the environmental reclamation according to the instructions laid out in the authorisation. The total investment needed to carry out the authorisation’s instructions will amount to approximately €2.25 billion for the next three years.

The government has set up negotiations with the company and the trade union organisations, the Italian Federation of Metalworkers (FIM), the Italian Confederation of Workers’ Trade Unions (CISL), the Federation of Metallurgical Employees and Workers (FIOM), the General Confederation of Italian Workers (CGIL) and the Italian Metalworkers’ Union (UILM), in order to reach an agreement on the company’s restructuring.

Solidarity contract

On 14 March 2013, at the Ministry of Labour, the representatives of the company and the trade unions, FIM, CISL, FIOM, CGIL and UILM, agreed upon the use of a solidarity contract rather than the extraordinary CIG that had initially been requested by the company. Solidarity contracts are agreements between the company and the trade unions which aim to reduce working hours in order to maintain company employment levels during a crisis. The Ilva solidarity contract means that there will be a reduction in the overall number of workers considered ‘redundant’ as a consequence of the restructuring process: 3,749 workers compared with the 6,417 people which would have been affected by the CIG originally requested by Ilva.

The maximum reduction in monthly working hours will be 34% (equivalent to the work of 3,749 ‘redundant’ workers) and will be distributed between all 11,000 employees at the Taranto plant starting from March 2013. With this solidarity agreement, the workers will lose less pay than they would have done under the CIG option. Furthermore, with the solidarity agreement, holidays and other contractual aspects such as paid time off and productivity premiums will be guaranteed, although they will be proportional to the actual number of hours worked.

The solidarity contract will remain in force for two years, and there will be periodic verifications in order to monitor the reclamation of the company and determine whether it is necessary to modify the solidarity agreement. When the contract expires, new negotiations will define what will happen in the next 12 months, although Ilva has confirmed that it will not proceed with collective redundancies.

Furthermore, the solidarity agreement foresees the setting up of an inter-ministerial table, including the Ministries of Welfare, Environment and Economic Development, in order to monitor the progress of the authorisation’s instructions at the Taranto plant and the surrounding areas. The trade unions, the region of Puglia, the local bodies and the agencies that monitor the reclamation process will also participate in the meetings, which are expected to occur every six months, or when requested by one of the parties.

Reactions of the social partners

All those involved in the negotiations regarding the employment consequences of the restructuring of Ilva in Taranto say they are satisfied with the agreement.

The Vice Minister of Labour, Michel Martone, who participated in the negotiations, considers it to be an important agreement because it sets out the necessary conditions to guarantee the procedures of the authorisation and the continuity of production, while at the same time avoiding a reduction in workforce.

The president of Ilva, Bruno Ferrante, has stated that the company is satisfied with the agreement, because ‘it protects the interests of the workers and confirms the commitment of the company to apply the AIA’. In this way, the president adds, ‘it will be possible to guarantee a positive future for the plant in Taranto, combining health, the environment and work’.

The trade unions are also satisfied with the agreement. The National Secretary of FIM CISL, Marco Bentivogli, underlined that the trade union action made it possible to avoid the use of CIGs by adopting solidarity agreements, and to substantially reduce the overall number of workers affected by the restructuring. The secretary of the FIOM CGIL in Taranto, Donato Stefanelli, agreed, pointing out that, thanks to the agreement, wages and jobs have been protected.

According to Mario Ghini, the National Secretary of the UILM, it is an important agreement that offers the Taranto plant good industrial prospects, while at the same time guaranteeing that workers’ pay will not be negatively affected.

Sofia Sanz, CESOS

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