On 4 November 2006 the government and the trade unions reached an accord on public sector agreement renewals for 2006–2007. Besides bringing forward resources initially set aside for 2008, the deal significantly reduces the time taken to approve agreement renewals for public sector workers. The trade union confederations expressed their satisfaction and promised to call off their planned general strike as soon as the parliament approves the accord.
There are almost 3.5 million public sector employees in Italy, of whom one third work in education, almost one fifth in the healthcare system and the others in local authorities (municipal, provincial and regional administrations), non-profit-making local organisations, tax agencies and the prime minister’s office.
The agreements for all divisions of the public administration expired on 31 December 2005. On 1 January 2006, therefore, the renewal procedure began for the two-year period 2006–2008.
Initially, the finance act (legge finanziaria) for the 2007 budget which the government presented to parliament has been approved by the lower house of parliament, the Chamber of Deputies, and is currently being scrutinised by the upper house of parliament, the Senate. The 2007 finance act had allocated €3.2 billion to the renewal of public sector agreements from 2008 onwards.
The possibility that the public sector agreement renewals might be postponed until after 2007 induced the public sector trade unions affiliated to the three main trade union confederations – the Public Service Union (Federazione lavoratori della funzione pubblica, Fp-Cgil), the Federation of Public and Service Workers (Federazione lavoratori pubblici e dei servizi, FPS-Cisl), the Public Administration Workers’ Union (Unione italiana del lavoro: pubblica amministrazione, Uil-PA) and the Local Authorities Union (Federazione Poteri Locali, FPL-Uil) – to call a strike for the last week of November. This decision forced the government to resume talks with the trade unions, which have very large memberships in the public sector.
The negotiations led to the signing, on 4 November 2006, of an agreement between, on the one hand, the finance minister and the minister of reform and innovation in public administration, and the trade unions (Fp-Cgil, FPS-CISL, Uil-PA and FPL-UIL) and the public sector representing employer organisations on the other.
The agreement reached between government and the trade unions centred on two main points, the second of which radically cuts down the time taken by the state authorities to approve and certify agreements.
Previously, an average of six months elapsed between the signing of an agreement renewal and its definitive approval. Consequently, public sector employees had to wait an average of 30 months from ARAN’s preparation and negotiation until the agreed increases appeared in their pay packets.
The process of agreement renewal for the public sector is divided into the following phases: preparation and negotiation of the agreement, signing by the unions and ARAN of the draft renewal of the nationwide collective agreement, and approval and certification of the agreement by the competent authorities. In this final phase, the draft agreement renewal must pass scrutiny by the State Accounting Office (Ragioneria Generale dello Stato) and the Court of Audit (Corte dei Conti) to come into effect.
The time limit for this process has now been fixed. Once 55 days have elapsed from the signing of the agreement, pay rises will be automatic, regardless of whether all the validation procedures have been completed. This will reduce the time needed for approval and certification; during this period, the prime minister’s office can make only one request to examine a signed collective agreement, without exceeding the mandatory limit of 55 days.
The reactions of all parties concerned have been extremely positive.
According to the Minister of Reform and Innovation in Public Administration, Luigi Nicolais, the agreement will increase the salaries of public administration employees by ‘€100 in 2007’. The Finance Minister, Padoa Schioppa, commented that ‘introducing the term “mandatory” is a fundamental change in the concept itself of the agreement and in the relationship with millions of public sector employees […] Hopefully, the agreement renewal will engender growth in the public sector and the economy.’ Prime Minister Prodi has also reacted favourably to the agreement. ‘This is an extremely important agreement because, among other things, it eliminates the inefficiencies and delays that we have experienced in the past’, he stated.
The trade unions are equally satisfied. They have declared themselves ready to call off the general strike as soon as the agreement signed with the government and incorporated into two amendments to the finance act has been ratified by parliament. The General Secretary of Cisl, Raffaele Bonanni, has called the agreement ‘important, innovative, unprecedented, because it clears the field of numerous misunderstandings and speculations concerning the public sector’. Finally, the National Secretary of Cgil, Paolo Nerozzi, noted: ‘The resources have been found for 2006–2007. The mandatory nature of the agreement is an equally important factor which brings a phase of unfulfilled reform to an end.’
The agreement reached by the government and unions is undoubtedly a positive development, as the laying down of clear rules and a definite time frame for collective bargaining in the public administration is indispensable for any policy aimed at improving the productivity of public sector workers. However, it represents only the first stage of a more general reform of the entire state administration.
The 1990s saw the major renewal and modernisation of many aspects of Italy’s public administration: organisation (especially computerisation), forms of recruitment (for senior management, but also a massive intake of workers on atypical work contracts who are not required to sit competitive examinations), a significant increase in ongoing training for employees, and the introduction of performance assessment and incentives systems (especially for senior management).
The shortcomings of the system are not so much related to its overall cost but as to how resources are used and spent. For example, the introduction of computer technology to simplify administrative procedures has not replaced the paper-based system but only added to it, thus making the bureaucracy even more complex and costly. Moreover, the ‘Bassanini reform law’ (IT9710312F and IT9802320F), which was enacted in 1997–1998 to transfer administrative functions and the corresponding resources from central government to the regional and local administrations, has produced a greater level of federalism. At the same time, it has increased interference by local politics in the secondary tiers of government (above all by restricting the roles and autonomy of senior managers). The result has been the indiscriminate payment (regardless of merit) of allowances to managers, who have changed from being high-level state officials to mere executors of local political interests. This has been accompanied by a loss of control over spending in some sectors like healthcare, the costs of which have increased disproportionately in some regions (also following the accreditation of private sector facilities).
All this makes reform of the public administration more urgent. Besides combating inefficiency and investing in technological innovation and staff training, reform must boost efficiency by introducing an objective system of performance-related incentives which reward the commitment and productivity of employees.
Livio Muratore, Ires Lombardia