Italy: Latest working life developments – Q4 2017

Wage increases for public sector employees, industrial conflicts at steelmaker ILVA and Amazon, legislative measures on self-employed workers’ earnings and business incentives for private companies are the main topics of interest in this article. This country update reports on the latest developments in working life in Italy in the fourth quarter of 2017.

Public sector workers to get pay rise

On 23 December 2017, the main unions representing public employees, and the employer organisation – the Agency for Bargaining Representation of Public Administrations (ARAN) – concluded negotiations on the national collective bargaining agreement (NCBA) covering employees in central government and national public institutions. The NCBA covers around 240,000 workers and is the first one signed since the 2010 freeze on wage and collective bargaining in public employment. The freeze was implemented as part of several austerity measures, but had been declared in breach of the fundamental right to bargaining by the Constitutional Court in 2015. The agreement entails an average €85 gross monthly wage increase for 2018, plus an average €450 lump sum to compensate for wage increases not paid during 2016 and 2017. The NCBA also introduced measures to differentiate pay, agreed at decentralised level, based on individual performance.

Industrial conflicts on the boil

Over the last few months, the future of steelmaker ILVA was once again the focus of political debate. The company’s Taranto plant, employing around 12,000 workers, needs urgent investments to reduce its environmental impact, which has already led to prosecutions for environmental pollution, as well as to the start of an EU infringement procedure for non-compliance with EU legislation on industrial emissions.

The company, which has been in an insolvency procedure since 2015, is managed by administrators appointed by the government. An acquisition proposal was advanced by steel production company ArcelorMittal in June 2017, which guaranteed a total of 10,200 jobs – as against the current 14,000 jobs at the plants of Taranto, Genoa and Novi Ligure – and contained commitments in terms of investments and environmental rehabilitation.

While the proposed job cuts are being discussed with the unions, the region of Apulia and its municipality of Taranto do not agree with the contents and timelines of the plan, pointing out risks to the local inhabitants’ health. They have contested, through the Administrative Tribunal, the Integrated Environmental Authorisation (IEA) released by the government in September, which sets the framework for the environmental rehabilitation of the Taranto site.

Other industrial conflicts include the strike organised on Black Friday at Amazon’s logistic centre in Castel San Giovanni, Piacenza. Unions involved here have underlined the arduous working conditions and have called for a firm-level agreement pushing wages above the minimum levels set by the relevant NCBA. They also criticised the high turnover of temporary agency workers, employed all year round. Amazon seemed unwilling to meet the unions, declaring that its workers already receive private welfare benefits on top of their pay, in addition to enjoying opportunities for career progression.

Latest laws on employment and social protection

In October 2017, under Act No. 148/2017, the government introduced the principle of ‘fair pay’ for self-employed workers, which followed a significant campaign by some professional associations and self-employed workers’ unions. Under the Act, public administrations, banks, insurance companies and large companies have to comply with minimum pay levels, set through a decree, in terms of quantity and quality of work, to be applied to all self-employed professionals.

On 23 December, the parliament approved the 2018 Budget Law. As in previous years, the Act earmarked significant resources for incentives targeted at private enterprises and covering both capital goods and the hiring of young employees on a permanent basis. The Budget Law also outlines anti-fraud measures to ensure the traceability of wage payments and invoices, and loosens the criteria for access to the anti-poverty scheme called ‘Income for Inclusion’ (Reddito di Inclusione) and to the early retirement scheme called the social advance pension payment (anticipo pensionistico sociale, special APe).

Outlook

The renewal of other NCBAs covering the public sector is expected to follow in the coming months. In line with the natural end of the legislature, the Italian president dissolved parliament after the approval of the 2018 Budget Law, and announced that the next elections will be held on 4 March 2018.

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