In June 2007, after 18 months of negotiations, representatives of the Auchan Group in Italy and the trade unions of the retail trade sector signed an agreement covering the 10,000 employees at Auchan’s Italian stores. The most innovative aspects of the agreement relate to industrial relations, work organisation and an extension of financial participation to the workers. The agreement’s signatories expect productivity growth of up to 50% as a result of the agreement.
Auchan Group in Italy
The French-owned Auchan Group has been operating in Italy since 1989. The Italian division was consolidated in 1996 through the purchase of 49% of the shares of the Rinascente Group. Rinascente, owned by the Agnelli family who founded the Fiat Group, is a well-established retail chain comprising many supermarkets and department stores throughout Italy. However, in 2004, the alliance between Auchan and Rinascente broke down due to financial difficulties within the Fiat Group (see, for example, IT0405205F, IT0411305F).
Currently in Italy, Auchan owns 43 hypermarkets, 215 supermarkets – including the Sma and Cityper chains – and manages 42 shopping centres. The number of employees totals more than 10,000 workers.
Most developed countries have experienced a recent decline in sales. However, this decrease is particularly accentuated in Italy where no monitoring of price rises took place during the monetary changeover from the lira to the euro and the subsequent phase of economic recession. Moreover, a drop in the purchasing power of salaries and pensions has also contributed to a fall in consumption. The Italian supermarket and hypermarket network is particularly suffering from the general reduction in sales which has hit Italy in the last few years. Currently, the Auchan group is reporting an annual decline in profits of about 4%.
Company agreement
After 18 months of negotiations, Auchan representatives and the trade unions of the retail trade sector have renewed the company agreement. The trade unions involved comprise: the Italian Federation of Trade, Tourism and Services Workers (Federazione Italiana Lavoratori Commercio Turismo e Servizi, Filcams), affiliated to the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil); the Italian Federation of Trade, Services and Tourism Workers (Federazione Italiana Sindacati Addetti Servizi Commerciali Affini e del Turismo, Fisascat), affiliated to the Italian Confederation of Workers’ Trade Unions (Confederazione Italiana Sindacati Lavoratori, Cisl); and the Italian Tourism, Trade and Services Workers Union (Unione Italiana Lavoratori Turismo Commercio e Servizi, Uiltucs), affiliated to the Union of Italian Workers (Unione Italiana del Lavoro, Uil). The previous agreement expired at the end of 2005, due to the division of the Rinascente Group. At that time, all of the Rinascente company agreements were cancelled, including the Auchan agreement.
The new Auchan agreement includes a number of innovative features in terms of industrial relations, organisation of work and economic aspects.
Industrial relations
The agreement augments the right to be informed on matters regarding continuous vocational training, apprenticeships and training programmes, as well as development projects and stages. To this end, a national commission has been set up ‘to examine and analyse the areas that can have an impact on production and on working conditions’. The commission will be composed of two members from each trade union organisation and an equivalent number of representatives of the Auchan group management.
The agreement establishes that, if Auchan Group decides to open a new hypermarket, it must first meet with the sectoral actors of the region where the new hypermarket has been proposed.
Organisation of work
The most important innovation in terms of work organisation concerns the possibility for the company and trade union representatives at hypermarket level to meet and reach local agreements in order to better distribute shifts and work loads. These agreements must also tend to reduce the number of Sundays that Auchan employees have to work; the revised schedules envisage shifts over a period of five or six days and an increase in the number of hours for part-time employees.
Economic aspects
The fixed company bonus and the service allowance will be transformed into an individual bonus which will be separate from salary. For all workers who do not have a fixed bonus and for all newly hired workers, a company bonus will be paid amounting to €100 for 2007, €750 for 2008 and €800 from the beginning of 2009.
Another bonus has been introduced, known as ‘Progress of the hypermarket’. This will also be paid to apprentices and workers on fixed-term and work-entry employment contracts. The bonus will be linked to four parameters: number of customers, sales, gross cash flow and gross operating result. The percentage obtained will be calculated on the basis of the gross salary over a three-month reference period.
The system of payments of the commercial bonus of departments has been modified. In the previous agreement, it was possible to reduce the bonus by 33% for every working hour lost in the three-month reference period; therefore, when three hours were lost, the worker forfeited the right to a bonus. Now, a reduction of only 2.5% applies for every hour lost. This bonus will be extended to apprentices and workers on fixed-term and work-entry employment contracts.
For work on Sundays and public holidays, the agreement includes an increase of 30% in daily pay.
The entire system of variable salary set out in the agreement should be financed by an increase in sales and productivity.
Other matters
A particularly significant element of the new agreement is the extension of company shareholding to employees, who will be able to convert their bonus into ‘ValAuchan shares’. The group’s general policy is to favour forms of financial participation of the company’s workers. Within the ValAuchan system, the workers can buy bonds (similar to shares) which are issued by the group, despite the fact that Auchan is not quoted on the stock market. Thus, the Italian workers will be able to invest a part of their variable salary, as negotiated in the Auchan agreement, in the ValAuchan system. Italian legislation permits tax relief on the sums invested and on the profits gained from such investments.
Employees who are absent from work for health reasons will be paid their salary in full; previously, they were paid 95%. Furthermore, the offer of a 5% discount in the Auchan hypermarkets has been extended to include workers on fixed-term and work-entry employment contracts, as well as apprentices, 30 days after being hired.
Reaction of social partners
The signatories to the agreement have calculated that productivity should grow by up to 50%. The company expects an increase in activities in terms of sales, a reduction in costs due to the rationalisation of work organisation, and greater worker participation in the company objectives.
The trade unions regard the result as very positive, as the agreement ‘has found solutions to all the problems arising from the previous agreements and met the trade union bargaining proposals’. According to the General Secretary of Fisascat, Giovanni Pirulli, the implementation of the agreement will be monitored as it ‘should be managed with the daily presence of the trade union in the workplace’.
Vilma Rinolfi and Domenico Paparella, Cesos