Employers react to the Government's commitment to the 35-hour week
The Italian Government's undertaking in October 1997 to present a bill in Parliament which will reduce the working week to 35 hours has provoked the outright opposition of the Confindustria employers' confederation and sparked broad debate on the future of "concertation" in Italy.
The agreement on the reduced working week (and on reforming the pensions system - IT9711315F) reached in mid-October 1997 between the Government and the Rifondazione Comunista party (IT9710133N) may have averted a crisis in the parliamentary majority, but it has nevertheless provoked numerous criticisms from both employers' organisations and trade unions. The agreement commits the Government to presenting a bill in January 1998 which will reduce the working week to 35 hours, starting from 1 January 2001. The Government has also announced that it is about to set up a tripartite committee which will define the contents of the bill. The fiercest opposition to the Government's action has been raised by the Confindustria employer's confederation but serious criticisms have also been voiced by trade unions, albeit in milder terms, as well as numerous practitioners and scholars.
Confindustria: the 35-hour week thwarts bargaining and concertation
Confindustria opposes the Government's initiative on two main grounds:
- Firstly, contrary to its declared purpose, the new law on the reduced working week would largely fail to create new jobs; indeed, it might have the opposite effect of increasing unemployment. According to Confindustria, the only effect of a generalised reduction of working hours by law would be higher labour costs, mainly through an increase in overtime work (Confindustria estimates that labour costs would increase by 10% to 15%). Consequently, labour productivity and competitiveness would be severely compromised, and widespread lay-offs would be likely as firms seek to recover productivity and competitiveness, or as a result of firms' closures or relocations. Moreover, Confindustria claims, reducing the working week would exacerbate the already difficult competitive situation of the South of Italy, adding additional costs and disincentives to the creation of new businesses in the Mezzogiorno. This would further widen the gap between the South and the North.
- Confindustria's second criticism - which partly links with the problem of increased costs - of the Government-Rifondazione Comunistaagreement is that bargaining and "concertation" (that is, dialogue and consultation with the social partners) would be impracticable. The need for employers to recover the costs arising from the reduced working week would make bargaining impossible, since the margins for reaching agreement on contract renewals would no longer exist. Given that the central issues of industry-wide bargaining are wages and working hours, the reduction by law of the working week to 35 hours would: (a) use up all the resources that would otherwise be available for pay increases; and (b) impose a tight constraint on bargaining over working hours. Concertation, in Confindustria's opinion, would be made impracticable by the Government's unilateral determination of a bargaining issue of such importance as working hours. According to Confindustria, it is pointless to start negotiations when crucial issues have already been decided elsewhere, outside tripartite concertation processes.
In line with this critical attitude to what it sees as undue government interference in matters usually subject to concertation, Confindustria has withdrawn from negotiations on the reform of the welfare state, declaring that the Government-Rifondazione Comunista agreement on pensions has "emptied" all the content from any possible reform. Confindustria has also announced that it has no intention of participating - except in the form of a delegation of technical observers - in the tripartite committee which should be set up to draft the bill on the reduced working week. Finally, negotiations over the renewal of industry-wide agreements (in the chemicals industry, for example - IT9710313F) have slowed down as the employers wait for further clarification of the working hours issue.
Furthermore, during the preliminary sessions of the committee set up to prepare the revision of the tripartite central agreement of 23 July 1993 (IT9709212F), Confindustria called the issue of reduced working hours "a stumbling-block in the way of concertation".
The unions: critical but optimistic
The trade union confederations have also been critical of the Government's initiative, stressing that issues concerning working hours should be addressed only with the full participation of the social partners. However, whilst Confindustria is hostile to both the purpose and method of the Government's action, Cgil, Cisl and Uil are substantially opposed only to the imposition by law of the 35-hour week. Indeed, they regard a reduction in working hours to be a major goal of trade union action. They also believe that the issue can be resolved through concertation, taking full advantage of the opportunities offered by the tripartite committee that should be set up to define the contents of the bill on the 35-hour week. The confederal unions have invited Confindustria to relax its rigid stance, especially as regards industry-wide bargaining, in order not to compromise what they consider a positive climate which has made possible important achievements in concertation over income policy.
Agreement on the EU working time Directive
There is a further recent development that highlights the importance assumed by the issue of the reduced working week for the Italian social partners. On 12 November, Confindustria and the unions reached an agreement on the principles for the implementation of European Union Directive 93/104/EC on certain aspects of the organisation of working time. Confindustria puts great emphasis on this agreement, stressing the central role of the bargaining method. It has also contrasted, somewhat polemically, the agreement with the Government's initiative over the 35-hour week. Rinaldo Fadda, general vice-chair of Confindustria, has declared that "if the Government and the social partners are able to make the best use of the agreement just signed, the matter of the reduced working week can be considered closed" (quoted in Il Sole-24 ore on 13 November 1997).
Cgil, Cisl and Uil instead regard the agreement as a first step towards reducing the working week. They consider the agreement as providing important proof of the value and vitality of the concertation method.
The Government's commitment to introducing the 35-hour working week on 1 January 2001 has provoked much debate on the future of concertation in Italy. Numerous practitioners and scholars have argued that the nature of concertation between the social partners is bound to change. With inflation at 2%, and now that EU Economic and Monetary Union is at hand, there will be less room for the wage bargaining and incomes policy that have to date been the central components of concertation-based policies. What will be required instead is close consideration of such crucial issues as labour flexibility and working hours.
Despite Confindustria's present inflexible stance, breaking the deadlock and relaunching concertation seem possible. The Government appears to be sensitive to the positions taken up by the social partners, and the planned setting-up of a committee to examine reduced working hours confirms its readiness to compromise. The confederal unions view concertation as an essential feature of the Italian industrial relations system. Finally, dialogue has continued in spite of its sometimes heated tones - as confirmed by the agreement reached on the EU working time Directive - and there has been no significant interruption either in industry-wide bargaining, or in the preliminary work of the committee on the July 1993 agreement. Revision of this agreement, indeed, may resolve the conflict over the reduced working week, as well as dispelling doubts concerning the future of concertation. The insertion in the accord (a true" basic agreement") of a clause specifying and strengthening the role of decentralised bargaining on issues concerning the reduction and management of working hours would probably help attenuate the resistance raised by the employers' associations and relaunch concertation on labour flexibility and working hours as well (Roberto Pedersini, Fondazione Regionale Pietro Seveso).