Italy: New rules to protect call centre workers
Measures have been introduced in Italy to protect its 80,000 call centre workers from the negative effects of increasing competitive pressures on employment, delocalisation and working conditions. Employers and unions in the sector have also adopted new rules aimed at avoiding social dumping, defining pay levels and ensuring a set of protective measures.
Overview of crisis in sector
Over the last 10 years, the call centre industry in Italy has been experiencing a steady decline in profits of up to around 10 percentage points reported between 2010 and 2015. The seriousness of this is demonstrated by figures produced for 2016 by the employer organisation Assotelecomunicazioni (Asstel) and the Politecnico Milano University, which show that there are almost 200 call centre companies nationally, employing around 80,000 people. Many of these employees are older workers who find it very difficult to re-enter the labour market if they lose their jobs.
Labour costs in these companies represent almost 80% of total turnover and in a bid to reduce costs and stay competitive, companies often decide to move their businesses to countries outside the EU where they can take advantage of significantly lower labour costs. This in turn triggers a social dumping effect which has a strong impact on working conditions.
Regulations to avoid distortions by takeovers and delocalisation
Act No. 11/2016
To try and avoid these distortions, the Italian legislature had already adopted Act No. 11/2016, which mandated the government to implement Directives 2014/23/EU, 2014/24/EU, and 2014/25/EU on ‘concession contracts and public procurement’. Section 1, paragraph 10 of the Act is aimed at avoiding business takeovers negatively affecting working conditions in call centres where companies have public and private procurement contracts with the same client and carry out the same call centre activities.
In particular, the Act provides for an employment relationship to remain in force when a new contractor takes over; with the terms and conditions set out by national collective bargaining agreements (NCBAs), applied on the date of the transfer. Furthermore, it obliges public administrations and public and private undertakings – intending to enter into a public procurement contract to provide call centre services – to give advance warning to company works councils (RSA) and the regional branches of the relevant unions.
2017 Budget Law
The 2017 Budget Law is an important measure aimed at strengthening the legislative framework of the call centre sector. The Law (Act no. 232/2016) covers all call centres (irrespective of their headcount) in relation to both incoming and outbound calls, sets out measures to combat delocalisation, provides for tougher sanctions and the ‘sterilisation of labour costs’ for the public administration. The last measure means that when selecting the best bid (offer), public organisations which are contracting services out to call centres must not consider staff costs. In this way, tendering procedures below labour costs should be avoided.
The Act’s measures aimed at combating delocalisation include:
- a series of notifications to be submitted by the call centre operator that decides to delocalise, or has already delocalised its call centre activity to non-EU countries;
- the loss of any benefits, including tax relief and social security contributions relief, for businesses delocalising the service;
- the obligation to promptly notify relevant institutions – at their request – of the call centre’s new location;
- the obligation to enrol in the Register of Communication Operators for all those businesses that carry out call centre activities targeting Italian phone numbers.
Such obligations are underpinned by harsh administrative penalties, for which the service provider and the client are jointly liable.
Protocol for businesses
A protocol agreed by 13 companies, whose turnover comprises 65% of the sector, defines social and trade best practices of the sector. It was signed on 4 May 2017 and is expected to remain in force for 18 months. In the protocol, the businesses commit themselves to ensuring increased service quality and to reduce service delocalisation. It also sets out that within six months of the conclusion of the agreement, 95% of the activities directly performed by them, as well as 80% of any new outsourcing activities, will be carried out within national borders. Furthermore, it contains provisions to tackle low-wage competition by agreeing to exclude suppliers’ bids if hourly labour costs are below specific parameters.
New rules adopted by the social partners
The sectoral social partners have also adopted new rules. On 31 July 2017, the employer organisations Asstel, which represents information technology companies, and the National Association of Outsourcing Contact Centres (Assocontact) signed a sectoral collective agreement with the:
- Trade Union of Workers in the Communication Sector (SLC) of the Italian General Confederation of Labour (CGIL);
- Federation of Workers of the Information, Show business, and Telecommunication Sectors (FISTel) of the Italian Confederation of Workers’ Unions (CISL);
- Italian Union of Workers in the Communication Sector (Uilcom) of the Italian Labour Union (UIL).
The agreement, applicable in outbound call centres, is aimed at establishing rules on ‘dependent self-employed workers’ in call centres. These are workers hired with ‘coordinated and continuous collaboration contracts’ (known as ‘co.co.co.’). The agreement replaces all previous agreements on these workers’ conditions of employment, introducing the necessary amendments to avoid abuses and ambiguous interpretations, defines pay levels and ensures a set of protection measures are in place.
The agreement is aimed at better pay levels for the co.co.co. (ensuring compliance with a minimum pay level) and at strengthening their position. Its provisions set out that a pay system based on targets can be applied only if the pay level is higher than the minimum hourly wage set out in the NCBA for the telecommunication sector. Furthermore, pay increases linked to the renewal of the NCBA will be automatically implemented.
It also aims to promote employment stability by agreeing that, with the introduction of any new collaboration contracts, those who have already worked for at least four months in the same company have a pre-emptive right to employment. Moreover, the supplementary healthcare insurance granted to sectoral employees (paid for entirely by the employer) is now extended to all co.co.co. – this insurance can also be complemented with a voluntary insurance policy, partially paid for by the co.co.co. Also, regarding representation rights, co.co.co. workers now have the right of take part in assemblies.
Among the recently introduced rules covering call centres, the Business Agreement of 4 May 2017 raised considerable expectation, with the largest sectoral employers binding themselves to a set of social targets. The President of the Council of Ministers, Paolo Gentiloni, has welcomed the agreement, saying it sets out a unique set of rules in Europe, as well as representing a social protection guarantee in a very difficult context, in which the need for businesses to be competitive can no longer result in distortions in terms of workers’ protection. Unions also praised it for steering towards stronger protections for workers in a sector still featuring weak performances.
Employer organisations highlighted that the agreement prompts a new approach to sectoral development where human resources are better valued, and which traces a new path for sectoral policies; supporting fair entrepreneurship and tackling social dumping.