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In March 2004, trade unions and employers' organisations in Italy's artisanal (small crafts businesses) sector signed an important agreement, which reorganises the collective bargaining structure, giving more importance to pay bargaining at local level. The accord also relaunches the artisanal supplementary pensions scheme, reinforces the role of joint union-employer bodies, and seeks to extend income support measures for laid-off and redundant workers to this sector. The agreement has caused divisions within the Cgil trade union confederation.
The Italian artisanal sector - ie small-scale crafts and trades businesses - employs about 1,450,000 workers and includes about 850,000 companies. The sector’s growth rate (in terms of newly established businesses in relation to those which have shut down) continually increased until 2002 (by 1.04% in 2000, 1.08% in 2001, and 2.1% in 2002). However, in 2003 the pace of growth slowed, recording only a 1.08% increase (about 15,390 businesses). The highest growth rate in 2003 was recorded by the building sector (20,267 new businesses) followed, at a considerable distance, by the food sector (2,452 new businesses). Artisanal enterprises have been severely hit by the current economic problems, particularly those located in the South of Italy, where growth in businesses was halved in 2003 (0.86% in 2003 against 1.59% in 2002).
The artisanal sector is very wide-ranging and fragmented, and has found it very difficult to manage its industrial relations system since 2000 (IT0007357F), when employers withdrew from a 1992 interconfederal agreement which established a two-tier bargaining structure, divided between the national sectoral and territorial level, similar in structure to that subsequently introduced for the wider economy by the national tripartite agreement of 23 July 1993 (IT9709212F). This had the effect of freezing all national sectoral collective agreement renewals for artisanal workers. The artisanal industrial relations system thus remained in the doldrums for over three years, though the social partners did not allow the situation to descend into conflict.
On 3 March 2004 a new interconfederal agreement on bargaining structures was signed by the sector's central employers' organisations - the General Italian Confederation of Artisans (Confederazione Generale Italiana dell'Artigianato, Confartigianato) and the National Confederation of Artisans (Confederazione Nazionale dell'Artigianato, Cna), the Independent Confederation of Artisans' Organisations (Confederazione Autonoma Sindacati Artigiani, Casartigiani) and the Confederation of Free Italian Artisans' Associations (Confederazione delle Libere Associazioni Artigiane Italiane, Claai) - and the three main trade union confederations - the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacato Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil). The accord marks a new beginning for the sector's industrial relations system and seeks to improve the relationship among the partners by defining clear fields of action, giving greater impetus to joint bodies, and attaching primary and unprecedented importance to decentralised bargaining.
New bargaining structure
The social partners, in the introduction to the agreement, declare their willingness to relaunch the industrial relations system in the artisanal sector by developing an industrial relations and collective bargaining system able to: support development; contribute to solving problems in specific areas and sectors; improve workers’ conditions; increase companies’ competitiveness; and foster innovation and high-quality lifelong training for workers.
The agreement confirms the two-tier bargaining level system whereby national-level bargaining in each part of the artisanal sector is exclusively entrusted with the definition of the general rules (bargaining schedules, procedures etc), individual labour rights, trade union rights, job classification, working time regulations and basic wage provisions. Pay rises will be determined largely on the basis of the incomes policy defined by the national intersectoral agreement of 23 July 1993. This policy is based on the protection of the purchasing power of wages against inflation and on the equal distribution of the benefits resulting from productivity and profitability growth. Under the 1993 agreement, pay increases are defined at national sectoral level every four years, on the basis of predicted inflation (as agreed upon by the government and the social partners), and wages increases resulting from the difference between predicted inflation and actual inflation are negotiated, also at national level, every two years. However, the new artisanal agreement introduces several important changes to this system:
- it still entrusts national-level bargaining in each part of the artisanal sector with the conclusion of pay increases on the basis of predicted inflation, but entrusts local-level rather than national bargaining with the recovery of the difference between predicted and actual inflation; and
- a perceived lack of concertation between the current centre-right government and the social partners has led the artisanal social partners to agree a different mechanism for the definition of predicted inflation rates. If the government and the social partners do not reach a joint decision on this point, the artisanal partners will be able to decide the inflation rates of reference for national-level wage bargaining.
Local-level bargaining in the artisanal sector currently involves only 70% of the workforce and 50% of the national territory, and has been limited to a few sectors (building, agriculture, retail and tourism). As noted above, the new agreement now entrusts such decentralised bargaining with a well-defined function - ie maintaining the purchasing power of pay by increasing wages on the basis of the difference between predicted and actual inflation. Moreover, at local level , the partners will also be able to agree on the distribution of labour productivity gains, on the 'basis of parameters jointly agreed upon by the social partners at regional level'. Where the protection of purchasing power is not agreed upon by the social partners at lower level, negotiations will be carried out at national level.
The new bargaining model will enter into force on 1 January 2005, preceded by an experimental phase which will be evaluated by the social partners before the end of 2004. The partners will also set up a national 'observatory' in order to monitor decentralised bargaining.
Other innovations
The other main novelties introduced by the new artisanal agreement include the following:
- the pay sections of all the national collective agreements for the various parts of the artisanal sector are to be renewed before 31 March 2004, providing for a 7.3% pay increase, backdated (the inflation rate as calculated by Istat was 2.5% in 2002, 2.5% in 2003 and 2.3% in 2004);
- the signatories request the extension to the artisanal sector of income support measures (such as the Wages Guarantee Fund) which apply in some other sectors when workers are temporarily laid off or made redundant (IT0311306T). These measures should be funded by the state, employers and workers. The agreement also proposes adapting unemployment benefits to the particular situation of the artisanal sector. Negotiations will be held to draw up a proposal on these issues to be put to the government and parliament;
- the sector's existing supplementary pension fund (IT0104184F), Artifond, will be relaunched and its operational procedures, established by a 1998 agreement, will be reviewed. The minimum number of members required to make the fund operational will be reduced, and within the next three months several new regional funds will be introduced. Furthermore, in future workers will have to opt out of the scheme actively (the 'silence equals consent' principle); and
- joint union-employer bodies are to be of primary importance. The structures and the rules of existing joint bodies will be assessed and adapted to the new bargaining structure, and new tasks will be assigned to the revised bipartite system, such as employee representation, health and safety, income support measures, training, pensions and supplementary pension schemes, research activities, the development of equal opportunities and the labour market. Negotiations on the 'pillars of this new bargaining system' are to be held before the end of 2004.
Reactions
The signatories welcomed the conclusion of the March agreement, which they see as a turning point in the sector's industrial relations system.
According to the artisanal employers' confederations, the agreement 'shifts the focus to decentralised bargaining and aims to provided targeted solutions to the problems of workers and companies'. According to the trade unions, the agreement is important and significant because it attempts to reform the bargaining system by strengthening decentralised bargaining, but without jeopardising the role played by the social partners and the tasks of national collective agreements.
According to Carlo dell'Arringa, an economist at the Cattolica University in Milan, the artisanal agreement provides a pointer to reviewing the bargaining structure established for the wider economy by the July 1993 tripartite agreement, but without upsetting it.
Commentary
The new agreement signed by trade unions and employers' associations in the artisanal sector marks a turning point in the industrial relations system. The accord is particularly innovative because:
- it highlights key issues of incomes policy, confirming the importance of the predicted inflation rate as the reference point for trade unions' wage policies aiming at protecting purchasing power. This is very significant, given that the July 1993 intersectoral agreement's wage policy determination mechanism has been questioned by the government and by the Cgil trade union confederation. The former has not been willing to negotiate with the trade unions over the predicted inflation rates, while the latter has sought to conduct wage bargaining on the basis of the actual (rather than predicted) inflation rate (IT0310206F). The new artisanal agreement is very significant because it applies the 1993 intersectoral agreement, which had been infringed by the government. The artisanal social partners will be able to establish the predicted inflation rate if the government will not do so;
- local-level bargaining acquires primary importance and a double function - recovering the difference between predicted and actual inflation and redistributing part of the gains resulting from local company productivity. This is a very notable innovation in Italian industrial relations. The agreement legitimises local-level bargaining and the social partners will be able to request such bargaining also for small companies that previously relied only on the national agreement;
- is strengthens bipartite joint bodies and extends the issues they cover to matters such as the labour market and the management of income support measures; and
- it supports the 'second pillar' of the pensions system by strengthening collectively-agreed occupational pension funds.
These innovations will be probably extended to the industrial relations systems in other sectors. Several proposals have already been made aimed at extending the innovations to the small and medium-sized companies affiliated to Italy's main employers' confederation, Confindustria.
The social partners have been very cautious in dealing with the artisanal sector agreement, due to internal divisions within the Cgil union confederation. The agreement was drafted in December 2003, but its signature was postponed in order to give Cgil time to consider its contents. The debate on the possible signature of the agreement caused profound division within the confederation. However, supporters of the deal prevailed, enabling Cgil to sign. The dispute centred on the fact that the new artisanal sector bargaining system is very close to the positions of Cisl and Uil. Cgil has long made many criticisms of these positions, especially under the leadership of its former general secretary, Sergio Cofferati. During this period, Cgil distanced itself from concertation, incomes policy and joint union actions and refused any possibility of reforming the bargaining structure in the direction of greater decentralisation, fearing an accentuation of local wage differences. Cgil's signature of the artisanal agreement marks a radical break from its former positions and may form the basis for a reinstatement of more united relations among the three union confederations.
However, the position adopted by the central Cgil confederation is not shared throughout its membership. Indeed the Fiom-Cgil metalworking federation has decided to call an extraordinary congress and present a policy platform with contrasting positions. The clash within Cgil will, it seems, be long and complicated, and may have an indirect impact on the (opposition) left-wing political parties. The 'reformist' element in the left-wing grouping supports Cgil's position while the more 'radical' component seems to be against it, supporting Fiom's positions. The battle within Cgil may depend not only upon the internal debate but also on the result of the forthcoming European Parliament elections. If the reformist parties achieve the higher vote, it will be easier for Cgil's current general secretary, Guglielmo Epifani, to achieve the so-called 're-unionisation' of Cgil (ie focusing it more on trade union than political matters). However, if the more radical parties do well, the dispute in Cgil may worsen, with severe consequences for the unity of action of the three union confederations. (Domenico Paparella and Vilma Rinolfi, Cesos)