Italy: Flexible forms of work: 'very atypical' contractual arrangements

  • Observatory: EurWORK
  • Topic:
  • Published on: 04 March 2010



About
Country:
Italy
Author:
Tania Toffanin
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Labour market in Italy is characterized by a large territorial gap between north and south – historically “Mezzogiorno” regions are deeply affected by long term unemployment – and a high quota of undeclared work: in Italy, according to the most recent ISTAT (National Statistics Institute) estimates the number of irregular labour units is 2.9 million. In addition, there is much gender discrimination and a high mismatch between formal knowledge and labour market skills demand that results in an increase in underpaid work among young people.

1. Definition and trends

1.1 Please describe the incidence of the following forms of employment that go beyond non-standard employment in your country, including any upward or downward trends over the past five years, plus, if relevant and appropriate, a brief explanation of the labour market context:

In Italy non-standard employment concern:

a) fixed term employment: short term contracts, training vocational contracts as CFL (working and educational contract), apprenticeship and contracts of inclusion (contratti di inserimento);

b) other dependent contracts: temporary contracts, job on call, stage, work-and-training-contacts;

c) other self-employed contracts: continuous and coordinated contracts, occasional collaborations and project contracts.

In 2008 Isfol (High Institute for Education, Vocational Guidance and Labour) report highlights that non-standard employment represents the 15.3% of total employment. Non-standard workers are 3.5 millions but there are also other non-standard workers that have just lost their job (522.000). In 2008, totally there are over 4 millions non-standard workers.

Temporary agent work: in 2003 there were 158.000 workers but they grew in 2007 to 287.000. In 2007 they represent the 1.0% of total dependent employment (0.6% in 2003). The share of temporary contracts in total employment has risen from 6% in 1993 to 13.4% in 2007, which nevertheless remains lower than the average in the EU equal to 14.7%. (Isfol Plus Report, 2006, http://www.isfol.it/DocEditor/test/File/Studi_Isfol_Occupazione_n.1(1).pdf ). Fixed-term contracts are most widespread among the young. In the 15-24 age group, 1 out of 3 is a non standard temporary employee. In 2007 apprenticeship contracts are 591.607, while in 2003 they were 497.095. In last five years the increase is of 15.9%.

Since 2003 (see table 1) in all sectors women employment has been interested in a proceeding involvement in non-standard works: women with part time and temporary agency workers are prevailing especially in agriculture and in service industry.

Table 1 Part time and temporary agency workers per activity sector and gender 2003-2007
% distribution
year Part time workers Temporary agency workers
  men men
2003 7.9 2.7 6.6 5.2 41.6 9.1 10.0 10.5
2004 6.7 2.5 6.1 4.8 41.5 8.6 9.1 9.9
2005 5.3 2.6 6.0 4.6 45.1 8.8 9.8 10.5
2006 6.0 2.5 6.1 4.7 40.3 9.4 10.9 11.2
2007 5.4 2.6 6.6 5.0 43.4 9.4 10.8 11.2
  women women
2003 25.1 17.0 26.7 24.9 68.8 9.8 14.8 14.7
2004 21.1 18.6 26.6 25.0 66.3 9.7 14.4 14.5
2005 19.7 19.4 27.2 25.6 69.1 9.5 14.5 14.7
2006 21.0 19.6 28.1 26.5 69.3 10.7 15.4 15.8
2007 23.7 20.4 28.3 26.9 69.6 11.0 15.8 15.9
  Total Total
2003 13.1 6.1 16.1 12.9 49.7 9.2 12.4 12.3
2004 11.2 6.2 15.9 12.7 49.5 8.9 11.9 11.8
2005 9.7 6.3 16.1 12.8 53.0 9.0 12.2 12.3
2006 10.6 6.3 16.7 13.3 49.9 9.7 13.2 13.1
2007 11.0 6.4 17.1 13.6 51.6 9.8 13.4 13.2

Notes 2003 figures are made on a statistics reconstruction (delete if none)

Source: : Istat, Labour forces survey

  • Very short part-time contracts (less than 10 hours per week)

In 2006 workers that work less than 10 hours a week were 499.000 (2.17% of total employment). From 2004 to 2007 the rates highlights that these contracts represent a trivial form of employment.

Table 2 Employees for less than 10 hours week worked and sectors
% values
  2004 2005 2006 2007
Agriculture 3.3% 2.9% 2.6% 3.6%
Manufacturing (a) 1.0% 0.9% 1.0% 1.1%
Building (b) 1.5% 1.2% 1.0% 1.3%
Subtotal industry 1.2% 1.0% 1.0% 1.1%
Services 2.9% 2.7% 2.7% 2.9%
Total 2.4% 2.2% 2.2% 2.4%

Source: ISTAT, Survey of Labour forces

  • short-term contracts, of either less than six months, less than three months or less than one month:

    The short-term contracts are: seasonal (19.2%), occasional (18.1%), apprenticeship or vocational training (17.6%) or for temporary replacement (13.2%). Seasonal short term contracts are prevalent in agriculture (81.5%) and in hotel and restaurant service (48.4%). For the most part they concern over 40 year old workers (46.9%) and less educated (32.0%). Short-term contracts lasting less than three months are 38.6%. The shortest terms (less than three months) are related to agriculture, hotel and restaurant sector and to unskilled jobs. Longest contracts (7-12 months) are associated to educational, health and social service sectors and concern skilled and graduated workers.

  • employment without formal contracts:

    According to 2008 Ministry of Labour report, the greatest amount of irregular work concerns services sector (2.2 million units), followed by industry (495 thousand) and agriculture (290 thousand units). In the service industry, domestic work records the greatest amount of irregularity, which in 2006 was equal to 53.1% of labour units. The overall rate of irregularity in 2006 amounted to 12% of total employment. The overall rate of irregularity in 2006 amounted to 12% of total employment. Irregular labour units decline from 2000 to 2006 amongst employees from 15.4% to 13.1% whilst the rate of irregularity increased among self-employed from 8.5% to 9.2%.

  • “zero hours” contracts, where workers can be called upon at short notice to go into work. Do these contracts guarantee a minimum number of working hours a week?

    In Italy “zero hours” contracts are commonly labelled as “on call jobs”. This contract was introduced in 2003 with d.lgs.no.276 and its recourse is most related to service sector (tourism, restaurant and commerce) and totally it concerns 0.7% of employment. It is not possible to employ job on call workers if: they replace workers on strike; the firm has made collective dismissals (within last six months); the firm has not made any risk assessment as prescribed by art.4 d.lgs.no.626/1994. There isn’t any guarantee of a minimum number of working hours a week: only workers that accept employer’s calls can have an indemnity (20% of wage defined by CCNL applied in that working place). This indemnity has a social insurance contribution and it concerns also week end and holiday working time.

  • any other forms of employment that are considered to be non-standard in your country (excluding regular part-time, temporary agency work and economically dependent work).

    There are other temporary collaborations, but estimates are difficult to manage because of the difficulty in separating out actual employees and self-employed (see section 5.1)

1.2 What is the legal framework surrounding these types of employment– has it changed over the past five years, possibly in reaction to trends?

Fixed-term contracts are regulated by Legislative Decree 368/2001, which implements the EU directive, after a separate agreement not signed by CGIL (National Confederation of Italian Labour) the largest union in Italy. The new model justifies the stipulation of fixed-term contracts for "reasons of a technical, production, organizational or substitutive nature". Fixed-term contracts become an ordinary practise to define company workforces while permanent contracts are becoming unusual. This regulation scheme weakens the role of collective bargaining and produce a mismatch between subordinated but unsteady contracts and permanent or fully self-employed contracts.

In 2008, for the first time, Labour Minister enacted an experimental voucher scheme for the grape harvest. INPS (National Social Security Institute) has sold 540.000 vouchers: the result is the regularization of 36.000 workers for 108.000 working days. The Government, according to decree law 112/2008 (article 22) enacted by Law no. 133 of 6 August 2008, has decided to extend the voucher scheme to all agricultural activities, even not seasonal ones, that have an annual business amount lower than 7,000 euro and since 1 December 2008 also to service, tourism and retail sectors and to young students under 25 year old (during holidays) and family firms than have an annual business amount lower than 10.000 euro. In agriculture most part of employment is not permanent: in 2005 there were more than 2.5 million farm business in Italy, and they employed 1.3 million full-time labour units but only 15% of whom were dependent employees. The adoption of voucher scheme also for seasonal work damages all workers that were employed with fixed term contracts and that after the working period received the indemnity. The voucher scheme foresees that the payment will be exempt from taxes and does not affect the supplementary worker’s status as unemployed or non-employed. Like occasional supplementary employment, the work covered by the scheme does not give entitlement to sickness, maternity, or unemployment benefits, nor to family allowances.

1.3 Is there any data on the transitions between:

a) non-standard forms of employment and standard forms of employment:

In 2006 ISTAT (National Institute of Statistics) report about work forces highlights the transition to long term contracts of: 84,329 apprenticeship contracts, 28,961 short term contracts (due to hiring costs reduction), and 6,508 vocational training contracts. Totally in 2006 they were 119.798. Totally, from 2002 to 2006, 570.919 non-standard contracts become long term ones.

b) non-standard forms of employment and unemployment/inactivity?

The Labour Ministry report on labour and employment policies (by analysing ISTAT (National Institute of Statistics) annual report (2007) on labour market composition shows that referring to 100 workers that in 2006 have non-standard contracts, after a year only 16 become permanent, while 13 are unemployed and 8 are totally inactive.

In other words, can non-standard forms of employment be seen as a stepping stone to more standard forms of employment, or perhaps conversely can non-standard employment contracts lead to inactivity?

In Italy agency work was introduced in 1997 with Law no. 196, later than other EU countries.

According to Del Boca, Marelli, 2008 the increased flexibility has had a positive effect on the unemployment rate in Italy which has fallen from 12% to 5.7% in a decade. Over this ten year period, Italian companies generated 3.5 million of new jobs. 2008 Ministry of Labour report on employment and labour policies (link) highlights that within a year most part of short-terms workers are still at the same condition. The longest duration concerns agriculture (75.4%), service sector (72.0%), central (71.4%) and southern regions (72.8%), women (71.1%), graduated (74.0%) and over 40 years old workers (73.6%).

Non-standard dependent contracts workers have more chance to become permanent (17.4%) than independent workers (12.5% occasional workers, 11.4% collaborators). Worker’s skills and employment sector are the crucial variables to analyse the effect of non-standards form of employment.

1.4 How prominent is the academic/policy debate on non-standard employment in your country? Please briefly summarise the content of the debate.

The increased flexibility in the labour market has driven the debate towards the analysis of its effects on people’s lives. Labour flexibility is not always dangerous for career or for earnings: it becomes a problem when it compels workers to follow an uncertain working path for the whole of their life. That seems to be most worrying for young people. In the 15-24 age group over 33% is a non-standard temporary employee, even if the share of this type of contract in total employment is smaller than the other EU countries (56% in Germany, 48% in France and 60% in Spain). According to the Istat labour force survey, temporary contracts are about 10% of the 24-39 age class, not higher than in the other EU members.

However, there are no comparative studies about the non-standard frequency hiring a head and it would be crucial to analyse labour flexibility.

The debate is running along two paths: the first is connected with the increasing application of short term contracts and other non-standard employment after an apprenticeship contract or vocational training contracts that prolong for many years the unstable working position; the second one is connected to the lack of guarantees for unskilled workers and for women employment. In the first case non-standard employment represent a testing contract, as proved by Contini and Trivellato (2005) that risk to last for many years without any guarantee of transition to permanent employment. In the second case non-standard contracts risk to worsen unskilled workers and women charged of care responsibility that haven’t any benefits to increase their resources, with a high odd to get a permanent unemployed.

According to a 2007 Bank of Italy working paper, the introduction in ‘80s of the so called “training and work contract” with the additional extensive cuts in social security contributions allowed firms to pay young workers an entry wage lower than the standard one, to balance firms’ training obligations. During the 1990s several other laws and agreements made easier the reduction of the cost of hiring young workers. According to the authors that regulation during ‘90s produced an increasing share of new young workers that worked less than 6 and 3 months in a year, a growing incidence of apprenticeship. In recent year labour law reform produces an increasing breakup of temporary works and enlarges for young workers the risks to be continuously a permanent employed.

2. The nature of the work carried out by those in non-standard employment

2.1. The nature of the work

Please describe the nature of the work carried out by those in non-standard employment, under the following headings:

  • the sector:

    In agriculture non-standard workers increased from 49.7% (2003) to 51.6% (2007), in manufacturing non-standard employment increased from 9.2% (2003) to 9.8% (2007), while in service sector it moves from 12.4% to 13.4%. Since 2004 women are the most affected by non-standard employment (15.9%) with respect to men (11.2%).

Table 3. Temporary agency workers for sector of activity and gender
a.v. *1,000
    agriculture Manufactunring and construction services Total
  quarter  Men women Total Men women Total Men women Total Men women Total
2004 I 96 55 151 308 123 431 425 707 1.132 829 885 1.714
  II 107 71 178 333 139 473 464 805 1.269 905 1.014 1.919
  III 142 109 251 375 127 502 512 774 1.286 1.028 1.010 2.039
  IV 123 121 244 363 135 498 425 796 1.221 911 1.052 1.963
2005 I 103 67 170 356 130 486 470 775 1.245 929 972 1.901
  II 126 82 209 375 128 503 510 827 1.337 1.012 1.037 2.048
  III 149 113 262 362 113 475 532 765 1.298 1.044 991 2.034
  IV 150 135 285 366 141 507 498 832 1.329 1.013 1.108 2.121
2006 I 107 75 183 387 146 532 525 872 1.397 1.019 1.093 2.112
  II 120 110 230 396 129 525 587 873 1.460 1.103 1.111 2.214
  III 140 125 265 373 144 517 615 851 1.467 1.129 1.120 2.249
  IV 145 125 270 399 146 545 557 940 1.497 1.101 1.211 2.313
2007 I 108 77 185 376 136 512 536 894 1.430 1.020 1.106 2.126
  II 129 90 219 397 148 545 567 974 1.541 1.093 1.212 2.305
  III 145 105 250 413 146 559 616 935 1.552 1.174 1.186 2.361
  IV 144 115 260 393 146 540 574 909 1.483 1.112 1.171 2.282
2008 I 98 58 155 374 167 541 571 922 1.493 1.043 1.146 2.189
  II 111 70 181 431 164 595 658 1.008 1.666 1.201 1.243 2.443

Source: : Istat Labour forces survey, 2004, 2005, 2006, 2007, 2008 (I e II quarterly)

According to the ISFOL Plus 2005 report (Participation to Labour and Unemployment Survey) also in public administration, even if 92.3% of workers are standard, the number of non-standard contracts is non negligible (6.8% of total employees). Research and university employment is the most affected by non-standard contracts (35.1% of sector employees).

  • the type of enterprise (size etc.)

    no information available

  • the type of activity (e.g. low-skilled jobs such as cleaning, or high-skilled jobs such as IT consultant roles or jobs in creative arts)

    Non-standard employment is extended to all sectors and positions. It differs in its typology: fixed term contracts are more present in manufacturing and in retail while collaborations are frequent in skilled jobs or atypical positions.

2.2. Work organisation

Please describe the elements relating to the organisation of the work of those engaged in non-standard employment, in particular relating to:

  • working hours (e.g. unsocial working times, rather than working hours)

    According to the 2002 Isfol Quality of work survey, over 18% employees work on shifts. Night-time work is more present within technical works and higher skilled workers, mostly employed in small business firms and private enterprises. According to the 2006 Isfol quality of work survey, an high share of non-standard workers are engaged in night-time work while the weekly working hours of temporary agency workers extends over 45 hours.

  • shift patterns.

--

3. Consequences of non-standard work on working conditions

Please describe any consequences of non-standard work in relation to the following:

  • pay

    According to the ISFOL Plus 2005 report non-standard workers, both dependent and self-employed earn lesser than standard workers. Short-term contracts earn 12.438 euro (80% of permanent workers’ allowances) while collaborators earn 10.191 euro (43% of self-employed workers). Wages are different for women: they earn lesser than permanent male workers (3.800 euro) and self-employed (10.000 euro). Male earn more than women for all kind of employment ( 23% if dependent, 40% if self-employed and 24% if collaborators).

  • working hours

    According to the ISFOL Plus 2005 report atypical workers (all workers unstable within the firms) are the most disappointed regarding to work organization (working hours, holydays and overtime work).

  • exposure to risks and accidents at work

    Non-standard workers are also involved in more weighty works: over 63% of them are concerned with heavy physical activities compared to 59% of permanent and dependent workers and to 50% of fully self-employed. Almost 50% of non-standard workers are involved with a high intellectual duty in comparison with 38% of fully-self-employed and 30% dependent workers. Atypical workers are the least satisfied regarding social insurance in the case of accident during working time and illness: 62.8% compared to 87.2% (dependent workers) and to 63.2% (self-employed). The lack of a social insurance scheme - to reduce the bad effect of work discontinuity - for non permanent workers make them more worried about their life 2006 Isfol quality of work survey .

  • work-related health problems and occupational illnesses

    See the previous one

  • training and career development opportunities

    According to 2006 Isfol quality of work survey, atypical workers are less satisfied about career opportunities (42.3%) than self-employed workers (67.9%). Also regarding their skills they highlight a strong disparity (62.9%) in comparison to self-employed workers (80.2%). Work discontinuity is also perceived as a problem: only 47.8% of atypical workers are satisfied of their working condition (68.9% of self-employed, 81.9% of permanent dependent workers).

  • job quality: is the content of the job interesting and/or does it require the worker to possess a certain level of knowledge and skills?

    According to the 2002 Isfol Quality of work survey Short term temporary employees report higher hierarchical control while independent but non-standard workers are more exposed to performance intensity, customs’ relation care and production objectives. The skills required are higher than those of standard employment.

  • Employment rights (equality, non-discrimination, right to collective bargaining). Are there any control mechanisms to ensure that these rights are not being breached? Are there any mechanisms to ensure that employees can lodge complaints about breaches of employment rights?

    Apprenticeship and other training scheme contracts, short-term contracts are regulated by CCNL (National Collective Labour Contract). Fixed labour contracts have the equivalent treatment of permanent contracts during their existence.

Temporary agency workers have a specific CCNL that regulates their working conditions while collaborations are all regulated by legislative decree 276/2003. Self-employed workers have to register to Chamber of Commerce their working condition: they are compared to entrepreneurs.

In relation to collaborations, national legislation contributed to this by providing for increasingly significant social security cover, with a series of measures starting with the general reform of the pensions system (art. 29 clause 2° Law 335/95), the introduction of compulsory health and accident insurance (Legislative Decree 38/2000) and maternity benefits. Pension system reforms remuneration is related to contribution rate and to working continuance. So, all non-standard workers are vastly penalized.

All they have the right to association, to join trade unions but the fragmentation of working positions seems to have an avoidance effect.

4. Impact on health and safety

Please detail any consequences of non-standard employment for the health and safety of workers. For example:

  • what are the main health and safety issues for workers in non-standard employment?

    According to 2006 Isfol quality of work survey non-standard workers usually work during production peaks so the labour intensity would increase the risk to get an accident. In 2005 the highest number of workers that had an accident (45.4%) was working for over 45 hours per week. In any case the social treatment differs a lot in relation to the type of employment contract or to the type of national collective bargaining applied.

  • are there any control mechanisms to ensure the health and safety of these workers?

    The employer must then fulfil the obligations imposed by d.lgs.no.626/1994 in regard to health protection, training, and the provision of safety devices. Also d.lgs.no.123/2007 foresees new penalties to contrast illegal labour practises that concern the protection against working risks for all workers employed, even if they are irregular or if they have non-standard contracts.

  • what is the role of the labour inspectorate?

    The role of the inspection service is crucial in regularizing workers employed without social security and insurance coverage but also to control the correspondence between the working hour dispositions, signed by employee and employer in the hiring contract. Labour inspectorate can also verify the nature of the work performances and its allowance. According to 2007 report labour inspectors activity in 2007 inspections increased by 30.7% with respect to 2006 even if they are too few in relation to the great number of work accidents and compared to a high fragmentation of productive organization.

  • what mechanisms exist to ensure that employees can lodge complaints relating to health and safety?

    They can highlight every kind of anomalous or dangerous condition to RLS (workers’ safety representative) or they can also disclose the matter to industrial medicine office situated nearby the working place.

5. Views and actions of policy makers and social partners

5.1 Have there been any actions taken by policy makers and/or social partners to change the regulatory framework surrounding non-standard forms of employment, or to encourage the growth or decline of any particular practice?

The transition from employer-coordinated freelance work (collaborazione coordinata e continuativa) to “project collaborations” (collaborazioni a progetto) and occasional collaborations (collaborazioni occasionali) has diversified the contract forms, by preventing an endless recourse to employer-coordinated freelance work, but it hasn’t considered a distinction between fully self-employed status (compared to entrepreneurial position) and semi-subordinate condition (see IT0307204f).

Last national agreement on social security, labour and competitiveness (“Protocollo su previdenza, lavoro e competitività”), enacted the 23st July 2007, defined a maximum number of fixed terms contracts renewal for the same employer for 36 months. Over six months fixed terms contracts have to take precedence for shifting to permanent hiring, within 12 months and with regard to duties already performed during fixed term working position.

5.2 What are the views of policy makers and social partners on these issues?

Non-standard employment has weakened national bargaining and the effectiveness of working conditions monitoring. Fixed term contracts and pseudo self-employed contracts are also weakening upskilling processes and productivity rate. The debate seems to be far from the issue of human capital and of its measure and evaluation in working places. As many scholars proved (see for instance Del Boca, Marelli, 2008) a high level of human capital expenditure stimulates technical innovations and also R&S activities within the firms.

6. Commentary

Please provide your own comments on the issue of non-standard employment in your country.

Despite government interventions to finance non-standard employment stability it has still to be solved the concern of long-term atypical workers, locked up into their condition. This highlights the need for proper policy interventions to reduce the permanence of atypical workers in reiterated non-standard employment condition.

Self-employed workers as collaborators (continuous, with a project and occasional) in 76.6% of cases work for a single employer so it will be arduous to define them free to plan their working time or the content of their assignments.

Collective bargaining and national agreements are replacing an organic legislative reform, but they are not judged sufficient to balance, in terms of security, the flexibility introduced by a high recourse to collaboration work contracts.

The dilemma is not related to their presence but to the switch effect of permanent employment, with particular regard to expertise working positions, i.e. lawyers staff, designer or architect firms. On the other hand unskilled workers risk keeping on an unstable working position for a lifetime.

It will be crucial to improve the forms of protection not only in employment relationships but also in the labour market, through a redefinition of the structure and function of social security and unemployment benefits. It will be also important to foresee a system of ongoing training and re-qualification for all workers affected by dismissals and for those want to change their job. Another issue is connected to work-life balance policies, in order to reduce female unsteady works commitment. Italy has the highest percentage of compulsory part time between female workers (2.5% in total employment, Isfol Plus 2005). Also young generations are penalized because they are not demanded by national employers.

The main concern is related to the national specialization, still focused on labour intensive products and to the industrial fragmentation that compel the firms to follow the path dependence of labour reduction cost.

References:

Tania Toffanin, Unimi

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