On 3 July 1993 the Government and the social partners reached an important agreement concerning labour costs. This agreement is more than just the conclusion of lengthy negotiations (around 40 days): it should be seen as a new "social pact". The agreement initiates a reform of the system of industrial relations - already modified by the abolition of the automatic inflation compensation (Scala mobile, cf. iMi 40), and restructures the pay system, while establishing new job-creation instruments.
The agreement is a "framework agreement", as it is the entire foundation of Italian labour market policy, rather than specific elements, which are called into question. The agreement contains new flexibility concepts, new regulations for the election of workers' representatives and the right to collective negotiations at plant level.
The most important points contained in the new agreement are as follows:
1.3.1.1. (a) Collective agreements
- Collective bargaining at national level
The national collective agreement is valid for four years, although the wage rates agreed there apply only for two years. Wages may not increase faster than the expected rate of inflation. After two years, though, at least in the case of collectively agreed minimum wages, the discrepancy between expected and actual inflation must be taken into account.
- Collective bargaining at plant level
Plant-level agreements - also valid for four years - are to deal only with those matters not regulated at national level. The rate of wage increase is tied directly to the pre-determined targets of productivity growth, improvements in product quality and other competitive elements. Collective bargaining at plant (or regional) level is primarily tailored to the needs of smaller enterprises.
- Waiting period
During the waiting period before the renewal of the agreement, employees are to receive, three months after the old agreement expires, a provisional wage adjustment of 30% of the expected rate of inflation. After six months the adjustment rises to 50%.
- Union representation
The agreement reaffirms the principle of unitary trade-union representation at plant level. Representation is composed of workers elected from among the workforce (2/3) and representatives of the organisations which signed the national agreement (1/3).
1.3.1.2. (b) Labour market policy
The Government has committed itself to present draft legislation in order to bring about the appropriate changes to the statutory framework for labour market policy and the efforts to overcome the employment crisis. The aim is to exploit to the full the employment potential of the labour market, in particular by extending the range of labour market policy measures to include a number of initiatives already in operation in other European countries. This draft legislation will be drawn up along the following guidelines.
- Crisis management
The wage-compensation fund for those on short-time working (Cassa integrazione guadagni, cf. BIR-I) is to be rendered more functional. In particular, its intervention is to be limited to 40 days. Provided the state of public finances allows, the level of unemployment benefit will be increased at the same time.
- Training
For the training-at-work contract (Contratto formazione-lavaro, cf. BIR-I) the age limit is to be raised from 29 to 32 years. Firms may not conclude new contracts until they have converted at least 60% of the existing contracts into permanent employment relations.
- Temporary work
Temporary work is only permitted in the industrial and service sectors. Low-skill workers are generally excluded from such employment relations. Temporary work is allowed for the short-term employment of skilled personnel, where the need for such labour cannot be foreseen by a firm's standard production planning, for the replacement of temporarily absent staff, and in those cases regulated by national collective agreement.
Agencies are to be established to organise temporary work; they are to guarantee employees a minimum monthly income.
Following its ratification by workers, the task now is to put the agreement on labour costs into practice "on the shop floor".
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