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Legislation adopted in Italy 2000 made it possible for the social partners to set up intersectoral funds to finance continuing vocational training. The new funds receive the 0.3% paybill contribution levied on employers for continuing training, which formerly went to the public authorities. By February 2002, five such funds had been set up.
The National Institute for Social Insurance (Istituto nazionale di previdenza sociale, Inps) had sole control of the funding of continuing vocational training in Italy until 2000. Legislation adopted in 1978 (law 45/78) made it compulsory for businesses to contribute 0.3% of their total paybill (for full-time employees) to Inps every year. Approximately EUR 465 million are collected each year through this levy. While Inps managed the funding, the regions received most of the funds, which went to co-finance training measures with the European Social Fund (ESF).
The 2000 Finance Law (388/00) radically changed the funding of continuing vocational training. By applying Article 17 of law 196/97 (the so-called 'Treu law') (IT9811186N), and based on the provisions of the tripartite Pact for employment of September 1996 (IT9702201F), Article 118 of the 2000 Finance Law established the possibility for employers' organisations and the most representative trade unions at national level to set up funds to manage training contributions made by enterprises. Enterprises may choose whether to join these new intersectoral funds or not. If so, they must request Inps to pass the levy of 0.3% onto the fund they have joined. If not, the payments remain at Inps.
Under the terms of the new law, intersectoral funds can be set up in four areas of the economy: industry, agriculture, the services/tertiary sector and artisanal production. A new law has to be introduced with regard to agriculture, as there is no system of collecting vocational training contributions from employers in this sector.
The procedure necessary to set up intersectoral continuing training funds has two steps:
The funds are classified as 'juridical subjects of an associative nature' (soggetti giuridici di natura associativa) under the direct control of the Ministry of Labour. They can be used to finance continuing vocational training projects at company, sectoral and territorial level. The fund will cover 100% of the cost of projects in depressed areas (those covered by the former ESF Objective 1) and 50% in other areas. National funds can also act at regional or local level through agreement between the social partners.
The law provides for public funding in order to promote the launch of the funds. However, when fully operational, they must use only the payments collected from the companies involved. The 0.3% levy paid by companies to Inps in 2002 and 2003 will still be used for training. Inps will provide 30% of these resources to the funds in 2002 and 50% in 2003. The law foresees other forms of financing the launch phase of the new funds, including the possibility of using the remaining funds left from the management of the resources of the ESF. The money will be allocated between the funds which are fully operational.
By February 2002, five continuing vocational training funds have been set up by the main trade union confederations - the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil) - and the employers' organisations. These are:
The creation of a single fund for each of the first three areas of the economy (cooperative, artisanal and tertiary) was made possible because the employers' organisations in these areas, despite being numerous, managed to overcome a high level of competition between them. The same unity did not prove possible for employers' organisations in industry, for which two different funds have been set up: one for small and medium-sized enterprises affiliated to Confapi and the other for enterprises affiliated to Confindustria.
The management bodies of all the funds so far set up are quite similar, with each having an equal number of representatives from the employers' organisations and the trade unions. The structures of the funds are as follows
The fund for the tertiary sector, given the heterogeneity of the areas it covers, has four committees, covering separate sections: commerce, tourism and services; credit and finance; insurance; and logistics, despatching and transport. Each committee is responsible for its individual section and reports to the board of directors. Finally, the Confindustria fund has two extra bodies: a committee for vocational training; and a committee for health and safety at the workplace.
Each fund has adopted a set of rules and regulations which governs its functioning. The common objective of the funds is to promote and finance vocational training programmes at company level - for individual enterprises or for groups where there has been an agreement between the social partners to that effect - and at territorial, sectoral and regional levels. The funds may also finance vocational training programmes which involve workers in enterprises operating in more than one region or that are distributed on a national scale.
The resources of each fund go to the employees of the participating, fee-paying enterprises. Each fund must place the resources received from Inps into separately managed accounts: one to finance the running of the fund itself (fixed at an annual percentage which differs from fund to fund, but which is not more than 8% of the total resources); and one for the financing of the vocational training projects. A director, nominated by the board of directors, is responsible for the functioning of the funds.
The applications for funding of vocational training projects must be sent directly to the head office of the fund or through the the relevant employers' or trade union organisations. The projects are to be evaluated by a technical team set up at the fund, which must check that all the necessary requirements have been respected. The team must also take into consideration the priorities established by the fund and judge whether or not projects should be funded. The technical teams have yet to be set up, but will comprise experts in vocational training. For the tertiary sector fund, which includes enterprises from many different areas, the four sectional committees (see above) will evaluate the projects for their specific area. Once accepted, a project must be approved by the board of directors, which will then grant the requested payment.
The cost of the projects financed for each region must be proportional to the payments into the fund from the enterprises in the region in question. However, each fund, while taking into consideration this stipulation, has the possibility to distribute its resources more equally on a national scale. They must take into consideration the economic situation in Italy, which varies greatly from region to region. The Centre and North, which are heavily industrialised and particularly interested in continuing vocational training, contrast considerably with the South, which has a low productive level and relatively little interest in training programmes. The risk is that only the enterprises located in rich regions with a strong interest in vocational training might make use of the resources available. To avoid this eventuality and encourage enterprises from the South to take a more positive approach to vocational training, the funds have established that a percentage of their total resources can be used to reduce this disparity between regions. This percentage varies, depending on the individual fund, from 5% (tertiary sector fund) to 20% (cooperative fund).
As mentioned above, funds can also act at regional or territorial level, In this case, certain funds, such as that covering Confindustria affiliates, will be able to utilise existing bilateral regional structures
The agreements setting up of the intersectoral continuing training funds constitute the end of a long and concerted effort to set up a viable system for continuing vocational training in Italy, which was initiated by the tripartite national agreement signed by the government and social partners in July 1993. The issue was discussed in the Pact for employment of September 1996 and in the 'Treu law' of 1997, which profoundly changed the regulation of the labour market and initiated the reform of the training system.
The difficulty in creating a better system of continuing vocational training lies in the conflict of roles between the central state and the regions. The Italian Constitution consigns a primary role in vocational training to the regions while the Treu law consigns considerable power to the central state. This has led to considerable conflict which has resulted in continual interventions by the administrative courts.
The creation of the funds has come amidst a period of difficulty and conflict among the government, employers' organisations, and trade unions and among the trade unions themselves (IT0201277F). The solution reached in the agreements is particularly satisfying because the decisions regarding the ways of using resources for training will be taken through concertation between social partners at decentralised level. In this way the competitiveness of enterprises and the professional skills of workers can continue to improve in tandem. This new situation increases the level of social responsibility of the actors involved concerning one of the most serious problems in the Italian labour market.
Italy is the EU country whose workers have the lowest level of educational qualifications and the lowest birth rate. In the next 10 years the number of young people of working age will diminish by 20%. Italy must, like in all European countries, raise the retirement age in order to keep the national pension scheme in equilibrium. Continuing vocational training is, therefore, fundamental in adapting the professional skills of workers, in line with technical and innovative changes in the world of work, through the introduction of a system of life-long learning which will enable workers to continue working as long as possible.
The creation of the new funds will allow an increase in the number of workers who participate in training. In Italy, according to data published by Eurostat in 1999, approximately 10% of workers undergo training each year. The European average, however, is about 50%.
The direct involvement of the social partners in the management of vocational training could act as a significant vehicle for increasing their role in the management of the labour market. Due to the endemic crisis of the public structures, Italian management of the labour market is among the least efficient in Europe. (Domenico Paparella and Vilma Rinolfi, Cesos)