Bill introduces temporary agency work into the Italian labour market
In June 1997, the Italian Parliament adopted a package of measures aimed at boosting employment, including legislation giving temporary agency work a legal status for the first time. This article reviews the provisions of the new legislation and its implications.
On 18 June 1997, after a complex parliamentary passage, the package of employment support measures promoted by Minister of Labour Tiziano Treu (IT9702201F) was finally approved. A large part of the parliamentary debate was concentrated on legislation for the enactment of temporary agency work, an issue not previously contemplated by Italian law. The new legislation adopted in Italy is similar to that already present in many other European countries. In order to increase the awareness and legitimacy of this new type of employment relationship, a period of experimentation will be initiated.
The regulation of temporary agency work
Following the approval of the bill, the most significant aspects of the regulation of temporary agency work (lavoro interinale) in Italy are as follows.
- The use of temporary agency workers is allowed in cases (a) foreseen by the national collective agreements covering the category to which the user enterprise belongs (b) of temporary use of skills not provided in normal company production structures (c) of replacement of absent workers. In the agriculture and construction sectors, temporary agency work is allowed only on an experimental basis subject to an agreement between trade unions and employers. Temporary agency work cannot be used (a) where the job requires low-grade skill levels (b) to replace workers on strike, or (c) in production units where collective dismissals have been effected over the previous 12 months.
- A register of businesses certified to provide labour is being set up at the Ministry of Labour and Social Security. Certification is subject to certain requirements, guaranteeing the economic and organisational stability of the company. The enterprises must be joint-stock companies or cooperatives, and must pay a deposit of ITL 700 million. Moreover, they must conduct business in at least four regions.
- The obligations of the supplying agency and the user company to temporary agency workers are as follows: the agency, as the employer, in agreement with the user company, must guarantee a wage that is not lower than that paid to workers of the same level employed in the user company. The worker must receive suitable training for the job to be performed and suitable information about safety and the protection of health in the workplace.
- A training fund has been established, managed by the National Institute of Social Insurance (Inps), and financed by the agencies with a contribution of 5% of the gross wage paid to a temporary agency worker.
In Italy, the introduction of temporary agency work was preceded by a heated political and trade union debate in which stances, having a strong ideological connotation, opposed each other for many years. The new legislation, therefore, marks an important turning point in the regulation of the labour market since it contributes to strengthening the most pragmatic viewpoint; the general principles of the institution had already been agreed in the tripartite central accords of July 1991 and 1993, later enforced by the law.
Although the legislation adopted does not differ much from that of most European countries, some of its aspects should, nevertheless, be pointed out. The requirements that agencies be economically and organisationally stable, imposed by the unions and associated parties, will immediately place the temporary work market in the hands of multinationals. Thanks to their large registers, multinationals dominate this sector everywhere, and in Italy they had conducted a tireless lobbying action. The multinationals will be accompanied by an Italian agency promoted by central cooperatives, which will enable the numerous workers' cooperatives to continue with the practice of "sending" members to other companies, although the rules will be changed.
For some time now, the lack of temporary work agencies has resulted in the creation of functional substitutes. Some of these are officially legal - contracting, subcontracting, collaborations and consulting - while others are just outside the boundaries of the law - from false cooperatives to illegal work contractors (caporalato). It should not be forgotten that, among the developed countries, Italy has the highest level of self-employment without employees (over 25% of all employment outside agriculture) and irregular work, with a high degree of "moonlighting".
Therefore, rather than a further "destructuring" of an area of employment where, for some time now, large and medium-sized organizations have played an increasingly smaller role, reorganisation can be expected. This will bring to light irregular situations that are no longer "justifiable" now that it is legally possible to use a worker without involving any type of commitment. The larger enterprises should benefit from the transition from "uncontrolled" flexibility to regulated flexibility, something that was previously unavailable to them. Nevertheless, the effect on employment should be more qualitative than quantitative, not due to the hypothetical "restraints" imposed by the law, but rather to the peculiar situation of the Italian labour market, which has found its path to flexibility in self-employment and "moonlighting".
The restraints on temporary agency work imposed by the new legislation are basically summarised in the "compulsion" to bargain, covering not only the normal functioning of such work, but also some of its "limitations". The task of defining low-grade skill levels, for which agency workers may not be used, is entrusted to bargaining, as is experimentation with temporary work in a crucial sector such as construction. Hence the new measures consolidate the tradition, set by the law of 1984 on part-time and fixed-term work, according to which regulation of "atypical" employment relationships in Italy is largely delegated by legislation to negotiation between the social partners. (Simonetta Carpo and Emilio Reyrei, Ires Lombardia)