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Labour flexibility has returned to the agenda in Italy after the Cgil, Cisl and Uil trade union confederations reached agreement in December 1997 on "guidelines to follow in negotiations between the social partners to support the growth of investment and job creation in the Mezzogiorno". The agreement has provided the opportunity for discussion of some of the issues that will be addressed in forthcoming talks on both the 35-hour working week and the revision of the central agreement of July 1993.
On 22 December 1997, the three main trade union confederations - Cgil, Cisl and Uil reached a unitary agreement on "guidelines to follow in negotiations between the social partners to support the growth of investment and job creation in the Mezzogiorno" (the South of Italy). This is an important document which should steer union action in local-level bargaining, in particular within the framework of territorial pacts and area agreements (IT9704203F).
The unions' agreement
The unitary agreement between the union confederations envisages a broad range of measures aimed at boosting employment and growth in the South, of which the following seem the most significant:
- the definition of "work-entry" policies based on traineeships, apprenticeships and "work grants";
- training schemes financed out of EU, state and regional funds;
- the drawing up of a framework agreement on working time which will enable the use of reduced working hours with an equivalent reduction in wages. This framework agreement should be tried out in the South, as part of territorial pacts and area agreements, using public financial support and relief on social security contributions to promote reductions in working time. One concrete measure might be the so-called "work-entry hours" system (for instance, 32 hours per week with pro rata pay), which has recently been included in the trade union platform for the renewal of the chemicals industry agreement (IT9710313F);
- in the case of innovative investments requiring the use of new technologies, the fixing of a pay scale which takes account of the time to acquire the necessary skills. In such cases, working time could contain a certain number of training hours paid on a one-off basis, also with the support of public financing. A similar scheme has been introduced by an agreement at the harbour installation of Gioia Tauro, where weekly working hours total 36, of which 30 are paid for by the employer and the other six (which are spent on training) by public funds;
- the definition of flexible working hours schedules - including the annualisation of working time - to allow the maximum utilisation of production plants. These working hours schedules could be used to absorb seasonal oscillations in production, restricting the use of overtime (in peak periods) and the use of the ordinary Wages Guarantee Fund for laid-off workers (in periods of crisis). A significant example of an agreement of this kind is the one signed at the Praia a Mare plant of the Marzotto textiles group, where weekly working time has been fixed at 48 hours for 28 weeks and at 30 hours for 20 weeks; and
- while new employment-creation investments are in the start-up phase, a temporary moratorium on company-level bargaining to keep wages at the minimum set by industry-wide agreements.
The agreement was reached after long negotiation among the unions, which concentrated mainly on whether or not to accept wages lower than the minimum established by industry-wide agreements. The result means that the minimum contractual levels can be maintained while allowing for a certain amount of labour and pay flexibility.
Employers' comments
The employers' associations have reacted positively to the agreement. Antonio D'Amato, managing director of Confindustria for the Mezzogiorno, has expressed his appreciation of the unions' positive attitude towards flexibility, but has asked for a commitment to structural measures as well. In particular, he has proposed the elimination of the contractual minimum pay levels, calling instead for the introduction of a general "minimum subsistence level" below which wages could not fall. Bargaining over wage increases should then take place at regional and local level. According to Mr D'Amato, bargaining would thus more closely reflect the situations of the various local labour markets. At the same time, Innocenzo Cipolletta, director general of Confindustria, has expressed doubts concerning the viability of "bargained economic planning" through territorial pacts and area agreements, arguing for the introduction of real wage flexibility by means of a "work-entry wage".
Commentary
With the guidelines set out in the agreement of 22 December, the confederal unions have confirmed their realistic grasp of the situation (demonstrated, moreover, by the success of the incomes policy that followed the 23 July 1993 central tripartite agreement) and their readiness to accept greater labour flexibility, provided it is defined through bargaining. There are slight differences among the positions of the various unions, with Cgil more reluctant to accept flexibility and Cisl more willing to propose it. However, overall, the willingness of the Italian trade unions to tackle the flexibility issue may now be taken for granted.
The agreement may indicate one way to overcome the conflict generated by the Government's undertaking to present a parliamentary bill on the 35-hour working week to come into effect in January 2001 (IT9711216F). The possibility of making working time more flexible has helped to revive the debate on this issue: one proposed way out of the deadlocked discussion between the social partners may be an agreement on the flexibilisation and annualisation of working time. However, Rifondazione Comunista, the party in the majority coalition which forced the Government to commit itself to the 35-hour week, has expressed its opposition. It reaffirms that the political agreement on this subject - which helped the Government to overcome a coalition crisis - must be implemented in full, and therefore that the 35-hour week must pass into law. While it waits for developments in the debate over the 35-hour week, the Government has meanwhile postponed implementation of the EU Directive (93/104/EC) on certain aspects of the organisation of working time, already the subject of an agreement in November 1997 between Cgil, Cisl, Uil and Confindustria, which included a 40-hour working week (IT9711140N).
The other important issue raised by the unions' agreement and the employers' reactions to it, is the "regionalisation" of bargaining, in particular over wages. Whilst the unions view "bargained planning" and state support as the best way to create jobs, another possibility might be the promotion of a second, regional bargaining level which would make effective wage differentiation a viable proposition. In fact, the tripartite agreement of July 1993 envisages a regional level of supplementary bargaining as well as the in-company one. However, the problem would then be how to make the changes to the bargaining system that this would entail without reintroducing the system of so-called "cage wages" (the wage differentials between North and South which were in force before 1968), which the unions have always rejected. The forthcoming revision of the July 1993 agreement may be an opportunity to discuss this issue as well (IT9709212F). Although the positions of the social partners are still very distant, pronouncements in favour of the regionalisation solution are increasing (Roberto Pedersini, Fondazione Regionale Pietro Seveso).