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This article examines the Italian situation, as of June 2003, with regard to: legislation and collective bargaining on the pay and conditions of posted workers (ie workers from one EU Member State posted by their employer to work in another); the number of such posted workers; and the views of the social partners and government on the issue.
EU Directive 96/71/EC concerning the posting of workers in the framework of the provision of services seeks to avoid 'social dumping' by ensuring that a minimum set of rights is guaranteed for workers posted by their employer to work in another country. The basic principle is that the working conditions and pay in effect in a Member State should be applicable both to workers from that State, and those from other EU countries posted to work there. The Directive covers undertakings established in a Member State, which, in the framework of the transnational provision of services, post workers to the territory of another Member State.
The Directive establishes a core of essential regulations aimed at ensuring employees' minimum protection in the country in which their work is performed. It guarantees the application of the host country's statutory and regulatory provisions relating to:
As well as these generally applicable statutory and regulatory provisions, a Member State's collectively agreed provisions on these issues must also be applied to workers in the construction sector (where these are based on 'collective agreements or arbitration awards which have been declared universally applicable').
The Directive allows for a number of exceptions to all or some of these 'minimum provisions' for: the crew of merchant ships; staff involved in the initial assembly and/or first installation of equipment; postings lasting less than a month; and where 'the amount of work to be done is not significant'. The Member States were obliged to transpose the Directive by 16 December 1999.
In 1999, the European Industrial Relations Observatory (EIRO) conducted a comparative study on posted workers and the implementation of the Directive. In June 2003, the EIRO national centres in each EU Member State (plus Norway), have updated the basic information in the earlier comparative study, four years on, in response to a questionnaire. The Italian responses are set out below (along with the questions asked).
What changes were made to national legislation in your country in order to implement the Directive? And have there been any further changes to the relevant legislation since then?
The Directive was fully transposed and enacted in Italy by legislative decree no. 72 of 25 February 2000. Previously, the posting of workers was regulated not by specific laws but by general legislation. In accordance with the Directive, this decree ensures that the same treatment and working conditions apply to posted workers as to workers normally based in Italy. Enterprises based in an EU Member State which post workers to Italian territory under a contract for the provision of services continue to maintain an employment relationship with those workers.
Unlike the EU Directive, decree 72/2000 also applies to enterprises located outside the EU which wish to post workers to Italy. In order to regulate such cases, ministerial circular no. 82/2000 was issued to supplement the existing legislation, ie legislative decree 286/1998 (the 'consolidated text of the regulations on immigration and the status of foreigners'). An Italian employer wishing to establish an employment relationship with a non-EU foreigner must apply for authorisation to the provincial labour authorities, and also provide documentation on the foreigner’s accommodation. The validity of the authorisation is limited to the duration of the work to be performed and may in no case exceed two years. The police issue a residence permit, which is not renewable. Finally, the workers concerned must have specialised qualifications (although bilateral agreements with other countries may regulate this aspect differently), and the authorisation must be submitted for approval by the trade union representatives at the company making the application and to the trade unions most representative of the sector at the provincial level.
The posting of workers from EU or non-EU countries to perform services in Italy takes place on the basis of a contract (or subcontract) which the recipient of the service (the company in Italy) concludes with the provider of the service (the posting company outside Italy).
Please outline very briefly the current legal position of posted workers in your country - are they covered by specific or general employment legislation, what is their position with regard to social security (are they covered under the social security system in their country of origin or the host country?) etc. Also, have any specific measures been taken to prevent abuses arising from the posting of temporary agency workers (eg an agency hiring temporary workers through a subsidiary in a low labour cost country and sending them to work for a user company in a higher labour cost country)?
Now that the Directive’s provisions have been transposed into national law, the same employment conditions (pay levels in particular) established by laws, regulations or collective agreements for resident workers also apply to posted workers performing similar services (this goes beyond the specific list of conditions to be applied to posted workers set out in the Directive).
As regards social security coverage, workers posted abroad or coming from abroad are covered by the social security system of their home country for the entire duration of the posting. This duration is fixed by bilateral agreements and varies, according to the country concerned, from a minimum of six months to a maximum of 36 (Israel and Tunisia). There is no time limit on postings to (and from) the USA, while the duration is set at 12 months (extendable) for the EU. During the posting, therefore, workers continue to pay contributions in their country of origin. However, if the posting exceeds the period established by the relevant international agreement, the workers become covered by the social security system in the country where they perform the work. This also applies to healthcare.
If workers are posted to a country with which Italy does not have a bilateral social security agreement, they are covered by contributions paid by the employer in the country of origin. If a foreign worker is posted to Italy from a country which does not have an agreement with Italy, the worker and the recipient company are subject to Italian law on social security and insurance.
As regards temporary employment agencies operating in EU Member States other than Italy, legislative decree 72/2000 allows them to post workers to companies in Italy. In this case, the agency is subject to law 196/97 (IT9707308F), which regulates temporary agency work and guarantees equality of treatment (as regards pay, insurance and social security) between temporary agency workers and permanent workers performing similar services.
Have there been any collective agreements concluded on the issues covered by the Directive? Have the social partners been consulted as part of the legislative and policy-making process and, if so, in what way? Have the social partners taken any other initiatives related to posted workers?
Collective bargaining does not deal specifically with workers posted abroad, although it does regulate temporary and provisional 'work secondments' (also abroad). In the latter case, collective agreements establish the increments to normal pay (temporary transfer allowances) and the reimbursement of travel, board and lodging, as well as other expenses. The national collective agreement for building workers regulates the detachment (or secondment) of workers to another enterprise (although it does not make specific mention of secondments abroad). This practice is very similar to the leasing of workers, which is forbidden by law.
When the Directive was enacted by legislative decree, the legislator did not deem it necessary to consult the social partners because the decree established better working conditions for posted workers than those envisaged by the Directive itself. As stated, such workers are subject to the same contractual conditions as apply to resident workers undertaking the same work. The Italian law has therefore gone further than the Directive, which ensures only a core of protective measures for posted workers ( maximum work periods and minimum rest periods, minimum rates of pay etc).
This equality of treatment between posted workers and their Italian counterparts reassured the trade unions, which did not oppose the new rules, and satisfied the employers’ associations, especially those in the construction industry, which feared unfair competition by cheaper foreign workers
The posting of workers from Italy to other EU countries is still relatively rare. More frequent is the reverse practice of posting workers to Italy from other Member States.
Please provide the latest figures available on the number of employees who are posted from your country to other EU Member States.
At present, there are no figures on the number of workers posted from Italy to other EU countries. However, the practice is not particularly widespread. It mainly involves medium- to high-level workers (eg highly specialised technicians and managers) who are in demand and usually negotiate their terms and conditions individually.
In the construction and public works sector, much more frequently used than postings are secondments or foreign assignments (see above), whereby employees do not work for another enterprise (ie they are not 'detached') but continue to work under the direct supervision of their employer for the entire duration of the transfer abroad. This concerns companies specialising in the construction of bridges, tunnels and other engineering work which win contracts (or more often subcontracts for specific phases of a project) and second employees for the entire duration of the work contracted. In recent years, the number of secondments by construction companies to countries like Germany and France has diminished, while those outside the EU have increased, especially to Asian countries (but also to South America). The workers seconded abroad are entirely covered by Italian law.
Please provide similar figures, if available, for employees posted to your country from other EU Member States.
Employees posted to Italy from other EU Member States are usually highly specialised workers like journalists and managers in multinational companies - though no figures are available on the number of such workers.. In such cases, requests for an extension of the posting (a further 12 months) are normally granted up to a maximum of five years from the start of the posting. It is growing increasingly obvious that the five-year limit on intra-EU postings is impracticable for such categories as newspaper and radio correspondents, or managers working for airlines, banks or other multinational companies, for whom the period cannot be predetermined but depends on the need for their presence in a particular corporate setting.
As regards non-EU workers, the law (see above) permits the posting to Italy only of those with specialised skills (under ministerial circular no. 82/2000). This restrictive provision has curtailed the phenomenon, in that non-EU companies are subject to numerous restrictions regarding the posting of workers to Italy. Nevertheless, it is growing rapidly in some sectors, especially the construction industry, where clandestine labour is more frequent and firms consequently do not obey the law (see below).
The EU Directive, although of general application, is aimed particularly at workers in the construction industry (building and public works), in which discrepancies between practice and legal standards are often observed. Has any special action been taken by the social partners or the state to address the situation of posted workers in this industry?
The construction industry has always had the highest concentration of irregular or clandestine labour in Italy. For this reason the state together with the social partners has sought to apply rigid regulations on the posting of workers, especially from non-EU countries, where labour is cheap. The national collective agreement for building workers obliges all construction companies winning contracts or subcontracts (public and private) to enrol their workers in the Special Construction Workers' Funds (Casse Edili) - an industry-specific insurance scheme financed by contributions from both workers and employers, providing assistance, welfare services and income support to workers in case of bad weather or lack of work (IT9901195N). Any employer that does not comply with this requirement is in breach of the law and may not open a building site. Moreover, the law stipulates that posted workers must be paid at the same rate as workers performing similar tasks in Italy.
In reality, in a very large number of cases, these two constraints (contractual and legislative) are not respected by firms posting non-EU workers to Italy. Whilst the basic hourly pay of an Italian construction worker is EUR 7.5, that of a posted foreign worker is EUR 3 to EUR 3.5. Moreover, these workers can reportedly be 'blackmailed' by their employers, because at the first sign of protest the employer may have the worker’s residence permit revoked, resulting in immediate repatriation. Although official statistics are not available, these illegal practices are spreading rapidly and are used to bring workers from eastern Europe (especially Albania, Romania, Moldavia, the Ukraine and the former Yugoslavia) temporarily into Italy.
In recent years, the trade unions have sought to combat breaches of the law and irregular work in the construction industry through both collective bargaining and legal action in the courts.
Please outline the stances adopted by the social partners and the public authorities/government on this issue. Particular attention should be given to unions and employers in the construction industry.
The social partners and government have paid little attention to the posting of workers within the EU. Indeed, the practice is relatively rare, and it concerns skilled workers with a medium to high position in the labour market, and therefore with strong bargaining power vis-à-vis their employers. The situation is different in the construction sector. Here, employers are worried about the presence of firms which use irregular or low-cost labour to engage in unfair competition. For this reason, the government, with the backing of the social partners, has reached various bilateral social security agreements with countries outside the EU. Finally, in order to combat clandestine work in the construction industry, besides working through the courts the unions have signed bilateral agreements with unions in other countries. (Livio Muratore, Ires Lombardia)