COLLECTIVE BARGAINING, EMPLOYMENT SECURITY AND FIRM
COMPETITIVENESS IN ITALY1
Lorenzo Bordogna-Roberto Pedersini
INDEX
PART I. GENERAL OVERVIEW............................................................................................................ 1
1.
INTRODUCTION ..................................................................................................................................... 1
2.
LABOUR MARKET AND UNEMPLOYMENT STRUCTURE ........................................................................... 3
3.
TRIPARTITE, INTERCONFEDERAL BARGAINING: FROM THE JULY 1993 AGREEMENT TO THE SEPTEMBER
1996 PACT FOR EMPLOYMENT AND THE SOCIAL PACT FOR GROWTH AND EMPLOYMENT OF
DECEMBER 1998 .................................................................................................................................. 5
3.1 The economic and social context ........................................................................................... 6
3.2 Main contents of the1993 Agreement .................................................................................... 7
3.3 The Pact for Employment of September 1996 ...................................................................... 10
3.4 The Social Pact for Economic Growth and Employment of December 1998 ...................... 13
4.
THE SO-CALLED “PROGRAMMAZIONE NEGOZIATA” (BARGAINED PLANNING) ........................................ 14
5.
A SUMMARY OF THE MAIN EMPLOYMENT AND COMPETITIVENESS MEASURES..................................... 21
6.
INDUSTRY-WIDE AND COMPANY LEVEL BARGAINING .......................................................................... 27
6.1 Company-level bargaining .................................................................................................. 29
7.
FINAL REMARKS.................................................................................................................................. 31
PART II. CASE STUDIES....................................................................................................................... 33
8.
ELECTROLUX-ZANUSSI ....................................................................................................................... 33
8.1 The “Zanussi model” ........................................................................................................... 33
8.2 The agreements .................................................................................................................... 34
8.3 Commentary ......................................................................................................................... 38
9.
FALCK SESTO SAN GIOVANNI ............................................................................................................. 40
9.1 The second reorganisation plan: the agreement of May 1993 ............................................ 40
9.2 The intervention of local authorities: the re-industrialisation of the
Sesto San Giovanni sites ...................................................................................................... 41
9.3 The agreement of 13 January 1996 on the Sesto San Giovanni plants ................................ 42
9.4 Results and comments .......................................................................................................... 44
1
This paper reproduces a report prepared in Spring 1999 for the ILO Research Project on
“The contribution of collective bargaining to employment protection or creation and to
competitiveness”.
10. GALBANI............................................................................................................................................. 45
10.1 The agreement on the reorganisation plan, 3 July 1997 ..................................................... 46
10.2 The “Social Plan” and the Operative Centre for Redeployment and
Outplacement (Cor) ............................................................................................................. 46
10.3 Re-industrialisation, fixed-term contracts and training ....................................................... 48
10.4 The agreement on salespersons ........................................................................................... 49
10.5 The protocol on industrial relations .................................................................................... 50
10.6 The joint assessment of the implementation of the agreement ............................................. 51
10.7 Commentary ......................................................................................................................... 52
11. INFOSTRADA ....................................................................................................................................... 52
11.1 The 20 May 1998 agreement ............................................................................................... 53
11.2 The 21 September agreements ............................................................................................. 54
11.3 Further developments .......................................................................................................... 56
11.4 Commentary ......................................................................................................................... 56
12. FINAL REMARKS.................................................................................................................................. 57
REFERENCES ............................................................................................................................................... 59
PART I. GENERAL OVERVIEW2
1. Introduction
The July 1993 tripartite Agreement is an important turning point in the
Italian experience also for the topic here under examination -that is the
contribution of collective bargaining to employment protection or creation and
to competitiveness. This does not mean that previously such issues were not
relevant in collective negotiations, especially at multi-industry, interconfederal
level. But the fact is that the 1993 agreement represented a crucial institutional
innovation in the entire Italian industrial relations system, both from a
procedural point of view (the recognition of the method of concertation
between the social partners) and for the content of the problems dealt with. It is
not by chance that Gino Giugni, a father of the Italian labour law tradition and
minister of labour at that time, defined it as “the new constitution” of labour
relations in Italy. An innovation whose importance was to some extent similar
to that of the basic agreements in the industrial relations systems of the Nordic
countries (Cella-Treu, 1998b), and which had relevant influence also in the
field of employment protection and promotion policies. The Pact for
Employment of September 1996, moreover, was a by-product of the 1993
Agreement, while the very recent Social Pact for Economic Growth and
Employment (Patto sociale per lo sviluppo e l’occupazione), reached between
government and social partners on December 22, 1998, is the direct successor
of the 1993 agreement. It seems therefore convenient to start the present
analysis from this point.
Another peculiar feature of the Italian experience -also this one connected
with the 1993 turning point- is the strong relationship which exists between
interconfederal, tripartite bargaining and the definition of legislative or
administrative measures for preserving and creating employment, and to a
lesser extent also for enhancing the competitiveness of Italian companies. This
connection between collective bargaining and legislative regulation is twofold.
First, it is due to the circumstance that the 1993 Agreement included several
items and guidelines of reform which involved the direct responsibility of the
government and of the Parliament, requiring to be translated into legislative
interventions, especially with regards to the chapters devoted to employment
and labour market policies. The same can be said for the tripartite Pact for
Employment (Patto per il Lavoro) of September 1996, which took up and
enlarged some of the issues already dealt with in the 1993 Agreement, and
which required a complex, apposite law for its implementation (l. n. 196/97).
And, secondly, it is due to the fact that many legislative measures which have
2
The paper is the result of a common work. However, the General Overview has been
written by Lorenzo Bordogna, except for the parts 3.3, 3.4 and 6 which have been authored by
Roberto Pedersini. The case studies have been written by Roberto Pedersini.
1
been approved afterwards, imply and in some cases strongly rely on collective
bargaining, and more generally on the co-operation between social partners for
their implementation. Therefore it is quite difficult in the following analysis to
clearly single out which measures are to be attributed to collective bargaining especially at interconfederal, tripartite levels- and which ones to the legislative
process. In many, and perhaps most cases, the typical sequence is:
a) measures agreed upon in tripartite agreements (at inter-confederal level);
b) normative implementation of these measures through legislative or
administrative acts;
c) further implementation in lower level collective agreements (at industrywide or company level).
In some cases the second step is not required, the entire process remaining
mainly in the hands of the social partners, while still in others the process ends
with the normative implementation, without implying a further intervention of
collective bargaining at lower levels.
Finally, as for the contents of the policies adopted in the last 7-8 years,
especially with regard to the protection and promotion of employment, they are
obviously influenced by the characteristics of labour market in Italy, and
namely by the unemployment structure. A situation which is characterised by
an overwhelming concentration of unemployment in the Southern regions of
the country and among young people, as well as by a particularly high
percentage of long-term unemployed. While the policies for enhancing
competitiveness have a more general scope. This explains why so many
measures are specifically targeted to the promotion of youth employment and
self-employment, with special provisions for the Southern regions.
In section 2 the main features of the Italian labour market, and of the
unemployment structure, are briefly presented. Section 3 gives an account of
the most important tripartite agreements in the 1990s, with particular reference
to the July 1993 Protocol and the subsequent Pact for Employment of
September 1996. These two tripartite agreements, in fact, anticipate and
contain most of the guidelines which afterwards have been implemented
through legislative measures or collective bargaining at lower levels. But some
attention will be also devoted to the very recent Social Pact for Growth and
Employment of December 1998. In section 4 a particular set of policies will be
analysed, the so-called “Programmazione negoziata” (bargained planning),
which refers to an innovative attempt to promote growth and employment, and
also competitiveness, “from below”, that is through the dialogue between social
partners and public institutions at local level. Section 5 will present the
concrete content of the main measures, trying to distinguish between defensive
and pro-active policies, and also to highlight the connections, if they exist,
between employment and competitiveness policies. Where possible, an
assessment of the impact of such measures will be suggested, although
systematic and complete evaluations of the results which have been achieved
are seldom available. In section 6 the contribution of industry-wide and
company level bargaining is considered, although the latter topic will be dealt
2
with in greater detail in another part of this Report. Few final remarks will
close this general overview.
2. Labour market and unemployment structure
A detailed analysis of the Italian labour market is not in order here, but a
few observations are sufficient to highlight its main characteristics, with special
reference to the unemployment structure, and to contrast it with that of other
European countries (Reyneri, 1997 and 1998).
On the background of a comparatively low degree of participation to the
labour market and an equally low employment rate (around 41%), what is
peculiar of the Italian situation in Europe is not so much the overall
unemployment rate (about 12.4% at the beginning of 1999, equal to 2.8 million
units out of a total employment of about 20.1 million people) as the structure of
unemployment. A structure which sees a very low component of unemployed
persons in a proper sense, that is those who, being previously employed, have
lost their job, in contrast to an extremely high percentage of persons in search
of their first employment: respectively about 10% and 90% of total
unemployment, while the share of unemployment in strict sense is in France
about 70%, and over 60% percent in Britain and Germany.
This, in turn, influences the composition by age and gender of Italian
unemployment (Reyneri, 1997, p. 13-4). As for age, in the second half of the
1990s, every 10 persons in search of a job 7 are younger than 29, while in
Germany they are less than 3 out of 10, and 4 or 5 in France and Britain. On the
contrary, adult persons with an age between 30 to 50 years are in Italy a little
more than 20% of total unemployment, against over 40% in Germany and
France, and those older than 50 are just 5% against 15% in Britain and 25% in
Germany. Moreover, with regard to gender, in Italy women are the great
majority of those in search of a job, while they are only one third of total
employment. In short, Italy is the European country in which the share of adult
people (and even more adult males) on total unemployment is the smallest, and
the share of young persons is the highest. Or, to say it in other words, the
lowest unemployment rate in Europe for adult males goes together with an
extremely high discrimination against young people, women and young women
especially.
Another characteristic of the Italian situation is the high percentage (indeed,
the highest in Europe) of long-term unemployment, that is those who have been
searching for a job for more than 12 months (65% against a European average
of about 45%; Reyneri, 1997, p. 14). And also under this respect young people,
women and those in search of their first job are the most severely hit.
Finally, the last typical feature of the Italian case is the territorial cleavage in
the unemployment structure, all the previous aspects being quite attenuated in
the centre-northern regions of the country, and much more marked in the south.
Here, while adult males still enjoy a high degree of protection against the risk
of unemployment, young people, and even more young women suffer an
3
experience of true social exclusion, with unemployment rates up to 70%
between 14-19 year-old people, and 60% between 20 to 24.
Tab.1 - Labour Market Indicators
Indicators
Total Employment
Employment rate
Total Unemployment
Unemployment rate
Activity rate
Unemployment rate
<25 years
Value
19,941,000
+117,000
+0.6%
41.3%
+0.1%
2,782,000
-27,000
-1.0%
12.2%
-0.2%
47%
Unchanged
Key Features
Value
Men
Women
Employees
self-employment
Agriculture
Industry
Construction
retail trade
other services
Men
Women
Trend
January 98/
January 97
Unchanged
+1.6%
+1.0%
-0.5%
+1.4%
+1.7%
+0.1%
-2.0%
+0.1%
54.8
28.7
Men
Women
-0.1%
+0.3%
-3.6%
+1.5%
Men
Women
Northern Italy
Centre Italy
Southern Italy
9.4
6.8
6.5
10.0
22.4
-0.3%
unchanged
-0.6%
-0.6%
+0.6%
Men
Women
60.5
34.5
-0.4%
+0.3%
33.8
-0.2%
Source: Italian National Action Plan for Employment 1998 and Istat (1999)
4
Tab.2- Labour Market Indicators (January 1999)
Indicators
Total Employment
Employment rate
Total Unemployment
Unemployment rate
Activity rate
Unemployment rate
<25 years
Value
20,144,000
+203,000
+1.0%
41.5
+0.2
2,840,000
+58,000
+2,1%
12.4%
+0.2%
47.4
+0.4
Key Features
Value
Men
Women
Employees
Self-employment
Agriculture
Industry
Construction
retail trade
other services
Men
Women
Trend
January 99/
January 98
+0.2
+2.5
+0.9
+1.3
-8.6
+0.3%
-1.1
+2.7
+2.6
54.7
29.3
Men
Women
-0.1
+0.6
+1.7
+2.4
Men
Women
Northern Italy
Centre Italy
Southern Italy
9.5
16.8
6.0
9.7
23.6
+0.2
Unchanged
-0.5
-0.3
+1.2
Men
Women
60.5
35.3
Unchanged
+0.8
34.1
+0.3
Source: Istat (1999)
3. Tripartite, interconfederal bargaining: from the July 1993 Agreement
to the September 1996 Pact for Employment and the Social Pact for
Growth and Employment of December 1998
Before reviewing the main contents of the 1993 Protocol, especially those
relevant for the topic of the present Report, it is perhaps helpful to briefly
summarise the economic and social context in which it was reached. This may
help also understand the innovative character of the agreement in the Italian
tradition.
5
3.1 The economic and social context
The July 1993 “Protocol on incomes and employment policy, on bargaining
structure, on labour market policies and on the support of the productive
system” was the final outcome of a long-lasting and difficult negotiation
process which started about three years earlier on the “cost of labour”
according to the employers, and on “the reform of the structure of wages and
collective bargaining” according to the trade unions. Two were the main
problems which gave rise to the negotiations.
The first one was the need to reform or abolish the system of automatic
indexation of wages and salaries to the dynamic of the cost of living (scala
mobile). A system which, especially before the partial reform of 1985-86,
transmitted (and amplified) to the domestic economy the inflationary pressures
imported from abroad, and which radically depressed wage differential by
grades, to the detriment of skilled workers. It had therefore very problematic
effects both at macro and micro-economic level.
The second one was connected with the bargaining structure, that is with the
existence in the Italian system of three different bargaining levels, without any
coordination between them and with the possibility to negotiate the same issues
at each level. In particular, wage and salary increases were usually bargained
both at sectoral and at company level, in addition to the automatic protection
granted by the scala mobile.
Both these problems, especially those connected with the wage indexation
system, had been the matter of several interconfederal negotiations and of
legislative interventions in the 1980s (1983, 1984, 1985-6), but always amidst
great difficulties and leading to only partial reforms. The situation became
really untenable, however, at the end of the decade and early 1990s, when the
economy started to enter a deep recession and the government decided to
adhere to the narrower floating threshold of the EMS (2.5%). This decision,
making more difficult to resort to the safety valve of devaluation, brought to
the fore of macroeconomic management the crucial necessity of curbing
inflation, and for individual firms the imperative of keeping labour cost under
tight control. It is in this context that negotiations started in July 1990. After
several steps, they brought in July 1992 to an important tripartite agreement,
which freezed the scala mobile (definitely abolished by the July 1993
Agreement) and decided a moratorium for 18 months of company-level
collective bargaining on wage and salary issues.
Despite this agreement, in September 1992 the economic situation
collapsed, Italy precipitated into a dramatic financial crisis, really on the verge
of bankruptcy, the Italian currency abandoned the EMS and was officially
devaluated by 15%, which soon became more than 30%.
On the background of this really emergency situation, the tripartite
agreement signed on July 23, 1993 covered a very wide range of issues, trying
to link, since its first paragraph, income policy -as an instrument of
macroeconomic management to grant the containment of inflation and a fair
income distribution- to economic and employment growth, which had to be
achieved through a greater competitiveness of the system of the firms. By
6
unanimous recognition it has been a crucial step in the process of recovery of
the Italian economy, and its contribution has been indispensable to meet the
Maastricht criteria for participation to EMU.
3.2 Main contents of the1993 Agreement
The contents of the Agreement were grouped in 4 main chapters, under the
following headings:
a) income (and employment) policy;
b) structure of collective bargaining (including also a reform of employee
representation system at company level);
c) (employment and) labour market policies;
d) support for the productive system (research and technological innovation
policies; education and vocational training; financial incentives to the
firms; policies to balance territorial disequilibria, to improve infrastructures
and promote public demand; tariff policies for public services and public
utilities).
In particular, chapter c) included government commitment to prepare,
through the dialogue between social partners, new legal regulations of the
following issues:

the management of redundancies and of employment crisis, including a
reform of the wages guarantee fund (cassa integrazione guadagni);

youth employment and training (apprenticeship contracts and work-training
contracts);

measures for labour market revitalisation (flexibilisation policies; equal
opportunities; solidarity agreements3; temporary work; special forms of
fixed-term contracts; a reform of labour market agencies in the agricultural
sector).
3
The solidarity agreements were originally introduced in 1984 by law 863. They may be
signed by major unions and introduce working time reductions. The law provides for two kinds
of solidarity agreements: they are either “defensive”, when they try to limit lay-offs as in the
case mentioned above, or “offensive”, when the pursue an employment creation goal. If
“defensive” solidarity agreements are concluded in manufacturing firms (those which have
access to the Wages guarantee fund), the law grants to the workers involved an income
integration of 50% of the wage decrease corresponding to the working time reduction (raised to
60% after 15 June 1995), for a maximum of 24 months. In case of “offensive” solidarity
agreements, the law provides for some economic incentives and social contribution reductions
to companies. The law 236 of 19 July 1993 introduced important changes in the regulation of
“defensive” solidarity agreements, raising considerably the economic incentives for companies,
lifting the amount of the income integration to 75%, and extending the sectors of application of
“passive solidarity” agreements (though with a different definition, less favourable, of
incentives and income integration). All these provision were valid only up to 31 December
1995. For this reason, the utilisation of “solidarity agreements” was very common in those
years, while at the moment is less widespread.
7
Only the first two chapters, however, found immediate implementation,
strictly interconnected between them. Of these, the reform of the bargaining
structure deserves perhaps a short description, to help understanding the
connections between its different levels which are relevant also to the purpose
of the present Report.
1.1.1 The new bargaining structure
While for more than two decades the bargaining structure was articulated on
three levels (the confederal or interconfederal one, the sectoral and the
company level), with no clear-cut distinction of roles and competencies, after
the definite suppression of the wage indexation system and the 1993 reform the
confederal or inter-confederal level does not play any more a direct role in
wage bargaining, although it is involved twice a year in the important tripartite
income policy sessions. These sessions are to be held in Spring and September,
just before the two most important economic decisions of the government (the
Document of economic and budget planning, and the budget law of the state),
to define the planned inflation rates for the next three years -a parameter which
strictly conditions the entire negotiation process and outcomes. The bargaining
structure, in its proper meaning, is therefore articulated on two levels, with
clear hierarchical relationships between them: the national, industry-wide level,
which is the main pillar of the system, leading to the sectoral nation-wide
labour contract (contratto collettivo nazionale di lavoro, or CCNL), and the
company (or territorial/regional) level. Collective agreements at the first level
have a validity of four years for the normative issues (i.e., typically, 1994-97;
1998-2001, etc.), and two years for wage and salary issues. Wage increases at
this level –as already said- have to be consistent with the planned inflation
rates, and their purpose is mainly to grant wages’ and salaries’ purchasing
power, to some extent taking into account also the general trends of the
economy and the competitive conditions of the sector, including average
increases in productivity (although this last point turned out to be a little
controversial). Possible differences between planned and actual inflation rates
have to be dealt with in the two year contract renewal, taking into account also
variations in the country’s exchange rates which might have occurred in the
period and other factors.
The second level of bargaining4 has a position of hierarchical subordination
to the nation-wide, sectoral agreement. Typically it takes place only once over
the four year period of validity of the national contract (so that it also has a four
year validity), over issues and according to procedures defined at the higher,
industry-wide level. On economic matters, in particular, it can be carried on
only over issues not already dealt with at national level, mainly related to
productivity and competitiveness objectives and (at least ideally) taking the
form of variable, performance-related payments. In consideration of the
innovative function of this level of bargaining, and of the potential advantages
4
The second level is mainly a company level; in a few sectors (like agriculture,
constructions, craft sector) it is substituted by the territorial level (mainly province-wide), as it
can happen also for small size firms (Cella-Treu, 1998b).
8
for the entire productive system, the Agreement envisages government
measures to reduce the tax imposition and the cost of social contributions on
“participatory” wage increases agreed at company level. Such measures were
introduced in 1997, amounting to 1% of the annual wage set by collectivebargaining, then to be increased to 3% by a governmental draft bill now under
debate in Parliament (April 1999).
Besides wage issues, the national industry-wide level, and to a lesser extent
company-level bargaining, have gained importance also in the implementation
of the various forms of labour market flexibilities (like those in the area of
temporary work, fixed-term contracts, apprenticeship, working time schemes
etc.; see below), which have been in many ways authorised by legislation after
1993, and even more after the 1996 Pact for employment, but which often
require to be implemented trough negotiations between the social partners
(Cella-Treu, 1998, p. 234).
1.1.2 The other chapters of the Agreement
The last two chapters of the 1993 Protocol were less fortunate, at least in the
short run. The third one remained largely just written on paper for a few years,
until it became the matter of a new agreement in September 1996 (the already
mentioned Pact for Employment) and later of the law n. 196/97; the last one
knew a rather uneven implementation. This is probably due to the fact that
creating the conditions for an effective income policy was the really urgent
issue in the 1993 dramatic economic conditions -and the reform of the
bargaining structure was a crucial instrument to this purpose. The other topics
appeared less compelling. With reference to the last chapter, in particular, the
delay and unevenness of implementation is due not so much to contrasts
between the social partners, or to the lack of a quid pro quo between
employment and competitiveness, as to the fact that it covered a rather broad
series of topics quite distant from the typical labour relations issues: actually,
more a long -and loose- sum of programmatic statements and goals which
required to be implemented by legislative acts rather than an agreement
between social partners in a proper sense. It was in fact by far the longest
section of the Protocol -more than the double than those on income policy, on
the reform of the bargaining structure and on the employee representation
system at company level, all together- including, for instance, under the subheading on “Educational and Vocational Training”, points as wide as the
reform of the entire high school system, or the extension of compulsory school
age from 14 to 16 years (a measure which was approved by the Parliament only
in 1998, with an extension to 15 years, with a commitment to a further
extension to 18 years, assumed by the government in the Social Pact of
December 1998); under the sub-heading on “Research and Technical
Innovation”, a point concerning the reform of public research structures as the
National Research Council (CNR) and the Universities, or the declared
necessity of progressively increasing the national expenditure for the research
system in relation to Gdp (from 1.4% to about 2.5-2.9%); under the subheading on financial incentives to firms, such points as the necessity to
modernise financial markets, to promote “regional” and “local” capital markets
9
and to encourage the growth of a complementary (and private) pillar of the
social security system so that to improve the link between firms and private
savings -to mention just a few. Despite this vagueness, however, some of these
topics were taken up in the subsequent Pact for Employment (especially those
concerning the general model of education and vocational training), while other
measures have been approved in the following years, especially with reference
to financial and fiscal incentives to firms, which in a more or less direct way
can be traced back to this chapter of the 1993 Agreement.
To sum up, we may conclude that the impact of the 1993 Agreement on
employment protection and creation has been mainly indirect -but nonetheless a
very crucial one. An impact primarily due to the success of income policy and
of the reform of collective bargaining. The first one helped keeping inflation
under control and actually curbing it to a significant extent, despite the strong
devaluation of the currency, thus allowing a significant reduction of the very
high interest rates which constrained the Italian economy as a whole, and
investments in particular. The second one brought about a clearer definition of
rules on wage bargaining, thus facilitating to keep under control labour cost
increases which, in employers’ opinion, were seen as hampering the creation of
new job opportunities.
As for the chapters directly pertinent to the topic of the present Report,
despite their limited implementation in the short run, the 1993 Agreement was
crucial in establishing the conditions for a continuous and stable dialogue
between government and social partners also on the management of
employment and competitiveness policies, which significantly concurred to
promote a double shift in the governance of labour market issues: from the very
formal and bureaucratic model of the past, through the tight control of
administrative agencies, towards a model of macro-social regulation carried out
through the collaboration between public authorities and the social partners;
and from a policy mix strongly characterised by the prevalence of passive,
defensive measures, towards a more pro-active, promotional orientation
(Reyneri, 1997 and 1998). We will come back on this point in the last section.
3.3 The Pact for Employment of September 1996
The Pact for Employment (Patto per il Lavoro) of September 1996 took up
and developed many issues of the 1993 Agreement concerning measures for the
protection and promotion of employment. The Pact for Employment was
signed on 24 September. It represents the most important result of bargaining
between Government and social partners on measures for employment
promotion in 1990s. It was signed by the government and a number of
employers’ organisations and trade unions (Cgil, Cisl, Uil, Confindustria,
Confcommercio, Confapi, Confesercenti, Assicredito, Cispel, Confetra, Lega
Cooperative, Confcooperative, Cna, Casa, Claai, Confartigianato, Unci, Agci,
Ania, Acri, Cisnal).
The pact has led to the definition of different measures, mostly included in
law 196 of June 1997 (the so-called ‘Treu Package’, from the name of the
Minister of Labour in office at that time), but it has not yet received full
10
implementation. This was partly due to the same reasons that hindered the
implementation of some sections of the July 1993 tripartite agreement: that is,
because some agreement’s provisions covered very general commitments to
broad reforms in the field of, namely, education or research. In other cases, it
happened because they required the activation of public investments in
infrastructures: in order to reach the implementation phase, complex and long
authorisation and administrative procedures must be completed, with the
possibility of political controversies and delays. As already mentioned, this can
be considered as a more general feature of tripartite bargaining in Italy, since
generally the government commitments heavily depends on administrative and
legislative interventions and have, in the last place, to be sanctioned by
Parliament. Still in other cases, even the provisions included in the law 196/97
might not have been actually implemented. In fact, certain norms require, in
order to be operative, the issue of specific ministerial decrees. An important
example is provided by the measures which should support working time
reductions, for which a fund of some 1,000 billion lire have been put aside. The
necessary decrees have still to be defined by the relevant ministries (Ministry of
Labour, Ministry of Treasury, and Ministry of Budget and Economic Planning)
and all the issue of working time reduction is seemingly blocked by the debate
over the governmental draft bill on the reduction of the working wee to 35
hours.
The Pact for Employment concerns the following main topics:

training programmes;

work and labour market flexibility;

the promotion of youth employment;

the so-called ‘area contracts’ (contratti d’area).
As far as training is concerned, the Pact introduces a general commitment by
the government to reform the overall system of education and training through
a better integration between its different elements (formal education, vocational
training, etc.) and clearer links between education and work experience. In this
sense, the diffusion of ‘job stages’ will be a priority. The improvement of the
general level of education and professional qualification is considered an
essential requirement for matching supply and demand in the labour market and
for granting the adaptability and learning capacity that is needed in the new
economic and competitive situations. Therefore, the Pact covers upper
secondary school, university education, work and training arrangements (as in
the case of work-training contracts and apprenticeship) and continuing
education.
The link between training and work is regarded as crucial for assuring to
young people an easier access to the labour market. For this reason, the pact
introduces important reforms in the fields of work-training contracts and
apprenticeship. As far as the regulation of work-training contracts is concerned,
the most important modifications had already been introduced by l. 451/94 (a
direct consequence of the July 1993 Agreement), referring to the increase in the
11
age of possible beneficiaries (that is set from 16 to 32 years), the extension of
the kind of employers that can use work-training contracts and a reform of
incentives granted to companies. In particular, the Pact –or, more precisely, the
l.196/97 which implements its main contents- extends the benefits to firms in
the South of Italy (within EC objective 1) for 12 more months, in addition to
the normal two years, in case of transformation of the Wtc into an indefinite
time contract. The Pact for Employment, then, tries to give new strength to
apprenticeship, a form of employment that was declining and was mainly
present in crafts and commerce. The age limit for young people that can access
apprenticeship has been raised to 24 years in general and 26 for Southern Italy.
Its duration is variable between 18 months and four years and it has to be
determined through collective bargaining. The identification of the specific job
positions which will be possibly covered by apprenticeship is also left to the
determination of collective bargaining.
With reference to work and labour market flexibility, it is important to
emphasize the introduction of temporary agency work by law 196/97 as a direct
consequence of the Pact. In particular, the law defined its scope and possible
utilisation, as well as temporary workers rights and the rules for establishing
temporary work agencies. Furthermore, the Pact tries to support the reduction
and reorganisation of work schedules, envisaging the introduction of incentives
for bargained reduction in working time and for its annualisation. Besides, it
introduces new norms that aim at sustaining the diffusion of part-time work.
For the promotion of youth employment the use of ‘traineeships’ (borse di
lavoro) has been introduced by law 196/97. These traineeships are reserved for
young people between 21 and 32, unemployed for more than 30 months and
resident in regions where the unemployment rate is particularly high (generally
in the South). They consist of a traineeship in medium- and small-size
enterprises and their cost is covered by the state. In case the company decides
to hire the trainee with an indefinite time contract, it can take advantage of
some incentives.
‘Area contracts’ intend to promote new productive investments in areas with
low rates of development and high unemployment. The Government will have
to identify target areas (mainly in Southern Italy), giving priority to those in
which these programmes are most likely to be successful. Area agreements may
be signed by local authorities, trade unions and employers’ organisations, banks
and any other interested participants. Economic recovery of the areas involved
will be assured by ad hoc financing, targeted incentives and through the
operations of an agency that will be responsible for promoting investment in
such areas (see section 4).
Finally, a specific chapter of the Pact for Employment covers the conversion
of irregular work into regular employment, through the use of “gradual
alignment agreements”, an instrument which was originally developed within
territorial-level collective bargaining in the clothing and shoe sectors in the
region of Puglia. The mechanism of gradual alignment allows small
subcontracting companies which use irregular work to adapt gradually to the
wage rates set out by the sectoral agreement. In practice, companies may decide
to join, through a specific company-level agreement, a gradual alignment
12
programme defined by an agreement between the province-level
representatives of trade unions and employers organisations which signed the
relevant industry-wide agreement. The company has to accept the provincelevel agreement as a whole, with the possibility of defining only minor
adjustments which must be specifically bargained with the signatories to the
province-level agreement. Usually, such re-alignment to the sectoral pay takes
place gradually over 36 months. Then, besides lower wage levels, further
benefits to firms undertaking re-alignment agreements are the gradual
adjustment of their social security payments, the waiving of sanctions on
previous tax and social payments evasion, and other economic incentives (see
also section 6). In particular, the Pact for Employment supports the extension
of this experience to other sectors and the increase of incentives granted to
companies entering the “re-alignment” process, namely considering the jobs
which enters the regular economy through re-alignment as employment
creation, with the relative economic benefits.
3.4 The Social Pact for Economic Growth and Employment of December 1998
The Social Pact for Economic Growth and Employment (Patto sociale per
lo sviluppo e l’occupazione) was signed on 22 December 1998 by the
government and 32 social partners associations. The pact explicitly refers to
both the July 1993 tripartite agreement and the Pact for Employment of
September 1996. Its main declared objectives are:

the definition of an income policy aimed at promoting employment and
economic growth, through different policies to be coordinated at all levels
(national, regional, and local);

the strengthening of social concertation and the definition of a set of rules
that assure social partners’ autonomy and responsibility, together with clear
and definite procedures;

the consolidation of the links among macro- and micro-economic variables,
and the labour market, in order to foster economic growth and promote
employment creation at local level as well.
First of all, the Social Pact confirms the importance of the income policy
defined in the July 1993 tripartite Agreement and states that macro-economic
stability is essential for employment creation, since only economic growth
without inflation can effectively reduce unemployment. The joint sessions on
income policy, introduced by the 1993 Agreement, to be held twice a year will
now cover also the definition of the National Action Plan for Employment that
the government has to present each year in the framework of the European
employment policy defined at the Luxembourg summit of November 1997.
This does not imply real negotiations, but rather a concertation process through
which the government seeks to share with the social partners the responsibility
for the preparation of the Plan itself, asking them to formulate joint suggestions
about specific policies, to point out “best practices” to submit to Brussels, etc.
13
(meetings to this purpose have started in March 1999 between government and
32 social partners associations). Then, a better integration between central and
decentralised income policy will be implemented, in order to speed up
economic growth and employment creation, namely in Southern Italy. The
Social Pact states that employment policy, now that macroeconomic stability
has been achieved, will receive the same attention that in the latest years was
granted to financial stabilisation.
Secondly, social concertation procedures will be strengthened and will
become a general instrument for dealing with social and economic policies at
all levels, national and local.
As far as employment policies are concerned, the Social Pact recognises that
their results have not been so satisfactory as those of income policy, despite the
key position that they had both in the July 1993 Agreement and particularly in
the 1996 Pact for Employment. The main reasons for this dissatisfaction is that,
despite the measures which have been devised, the unemployment rate did not
show any significant decrease and that some of the most important
interventions defined in the formers Pacts found considerable problems of
implementation, mainly for administrative delays. This applies in particular to
area contracts, territorial pacts and infrastructural investments.
After restating the government commitment to a set of measures already
included in the Pact for Employment and not fully implemented yet (as those
related to public infrastructural investments and the reform of the education
and training systems), the Pact focuses primarily on tax relief and social
contribution reduction. In particular, the labour cost will be reduced since
contributions for family allowance and maternity benefits will be covered by
tax revenue, instead of being paid by firms. Then, the fiscal burden on firms
will be progressively reduced, and temporary tax relief will be granted to
companies which undertake investments. Following trade unions’ demands, the
Pact contains a promise to reduce the fiscal burden also on workers. In
particular, even if the terms are not stated directly in the Pact, the government
committed itself to: a) reduce labour cost by 1.25% within 2003, through a
decrease in social contribution of 3%, which would add to the 0.82 cut
introduced by the 1999 Budget Law; b) strengthen the fiscal reform under way
(namely the ‘dual income tax’), which should lower taxes on profits by 10% in
ten years, by adding specific tax relief for profits which are reinvested in
equipment (with funds of 2,000 billion lire in two years); and c) decrease the
personal income tax for the second income level by 1% in 2000, and possibly
by 2% in 2001.
4. The so-called “Programmazione negoziata” (bargained planning)
This heading covers a group of measures which in part have their origin in
tripartite or interconfederal agreements of the 1990s, and are intertwined with
them, but in part have also an independent live. They reflect a shift in public
policies in favour of economically weak areas, mainly in the southern regions
of the country, from a very centralised type of intervention to a more
14
decentralised one, based on the subsidiarity principle and on the involvement of
social partners and other economic and institutional actors at local level. They
are not an alternative to social pacts on employment, but rather a complement
or a development of them, an utilisation of social concertation at local level to
create a set of economic conditions and a climate of trust so that to stimulate
investments and promote employment “from below”. The novelty of this trend
is to be seen in contrast with the traditional industrial policy in the South of
Italy, which for decades has been based on “extraordinary interventions” and
large financial transfers from the centre, without stimulating the
“responsibilisation“ of local level social, political and institutional actors. A
policy which, despite its costs for the state budget, almost completely failed to
promote a stable and self-sustained process of economic development (Trigilia,
1992), imposing the necessity of a new approach to the so-called “Questione
meridionale”, with a crucial role being played by the creation of a new
responsible ruling class at local level. The “programmazione negoziata” and its
instruments (mainly the territorial pacts and the area contracts; see below) are
important components of this new approach, trying to utilise labour relations
and social concertation not only to promote employment in the short run, but to
establish a texture of social conditions favourable to a long-run economic
growth.
In November 1994 is an agreement between government and social partners
which for the first time makes reference to the programmazione negoziata,
recalling a suggestion of the Delors’s White Paper about the opportunity to
encourage economic development at local level. The aim is to promote
interventions apt to enlarge productive activities and to improve infrastructural
endowments in economically depressed area, thus making them more capable
to attract further investments and to sustain a process of endogenous growth.
Additional indications are included in the Pact for Employment of September
1996 (especially with reference to area contracts; see below), while two
successive laws (n. 104/1995 and especially n. 662/1996) regulated all this
matter and defined several instruments through which the programmazione
negoziata can be realised5. Finally, several deliberations by the Cipe
As for law 662 of 1996, the “programmazione negoziata” is a bargained regulation which
involves public authorities or public authorities and private subjects, with a common
development goal, and which requires an overall repartition of responsibilities. It includes:
5
a.
the “Institutional programme agreement” (“Intesa istituzionale di programma”): this is
an agreement which involves only public authorities at national and regional level. The
signatories commit themselves to cooperate for identifying available financial
resources, prospective partners, and administrative steps to be taken for the realisation
of an investment project of common interest which would last for more than one year;
b.
the “Framework programme agreement” (“Accordo di programma quadro”). It is an
agreement which is promoted by the signatories to an Institutional programme
agreement. It involves both public and private actors and is aimed at defining the
concrete measures to be implemented at local level. It identifies the respective
responsibilities for the implementation of the different elements of the programme and
may provide for administrative simplifications, in order to speed up the completion of
the investments;
15
(interministerial committee for economic planning) specified the procedures to
be followed for the approval, financing and monitoring of the initiatives.
Particularly important are the deliberations of March 21, 1997, July 9 and
November 11, 1998. Within the institutional framework of programmazione
negoziata, in addition to Cipe, an important role of coordination is played by
the Department for Development and Cohesion Policies, a recently established
(1997) structure of the Ministry of Treasury which supervises the assessment
and selection process, and partly by the Agency Sviluppo Italia, created at the
beginning of 1999, which also responds to the Ministry of Treasury.
As already said, the most relevant instruments of programmazione
negoziata are the ‘Territorial Pacts’ (Patti territoriali) and the ‘Area Contracts’
(Contratti d’area). Both have a rather complex institutional architecture,
involving several institutional and social actors, at national and local level, as
well as individual employers, and comprising various framework agreements,
of which that between social partners concerning labour market issues is just
one.
Each Pact or Contract -in addition to the agreement on the series of
industrial or entrepreneurial initiatives, specifying the prospected investments,
their total costs, the quota in charge of the state (or public aids), the
implementation time and the expected new employment- includes other three
types of agreements, which are:

an agreement between the trade unions and employers associations at local
level about working conditions flexibility (which, in turn, will give rise to
company level agreements);

an agreement between public administrations finalised to the simplification
of administrative procedures (permissions, authorisations, etc.) necessary to
the implementation of the economic initiatives object of the Pact/Contract;

(possibly) a “legality” protocol, that is an agreement between authorities
and institutions (police and armed forces, representatives of the Ministry of
the Interiors) to strengthen public order and the control of the territory
against organised crime6.
c.
the “Territorial pact” (“Patto territoriale”) which may be promoted by public
authorities, social partners or other public or private actors. It aims at realise a specific
local development project (see in the text);
d.
the “Programme contract” (“Contratto di programma”). It is an agreement concluded
by the relevant state administration body, big companies, SME consortia, or the
representative agencies of industrial districts for the implementation of the
interventions defined through “programmazione negoziata”;
the “Area contract” (“Contratto d’area”): it is an agreement signed by public
administration, including local authorities, trade unions and employers’ organisations,
and all the other actors which may be interested in it, for accelerating economic
development and fostering employment creation in specific area characterise by low
rates of development and high unemployment (see above in the text).
6
To give an example, the Area Contract of Crotone, reached at the beginning of March
1998, was subscribed by 35 actors:
e.
16
In somewhat greater detail, the main characteristics of these two instruments
of programmazione negoziata are as follows.
Territorial Pacts were originally developed within Cnel, the National
Council for Economic Affairs and Labour, a constitutional body with a
consultative character made up of representatives of social partners. They were
devised in order to sustain and coordinate different economic development
projects in a particular area and to put them into an integrated framework. The
logic of this instrument is coherent with the principle of social partnership
which since 1989 inspires the working of EC cohesion policies. Interested
sectors are industry, agro-industry, services and tourism, in addition to
infrastructures functional to economic efficiency of investments. The potential
territorial target covers the entire country, but only pacts realised in depressed
areas admitted to EC regional programs can utilise the financial resources made
available by Cipe. The role of Cnel has been narrowed by the law n. 662/96 and
by the subsequent Cipe deliberations, mainly to the possible (previously
compulsory) certification of the “existence of concertation” between social
partners, which is a requisite for the approval of territorial pacts. However it
maintains an important role of promotion of concertation itself, and of
guarantee of the consistency between the content of the pact and the goals of
economic development at local level (Albi, 1998b). In a Territorial Pact, the
relevant social partners, local authorities (provinces and municipalities) and
other public actors at local level, other private actors (like banks) define a set of
development goals, select projects according to these goals and agree on
measures that could facilitate and support their realisation. The requisite of

five representatives of the central government (Presidency of the Council of Ministers;
Ministry of Treasury; Ministry of Labour; Ministry of Industry; Co-ordinating
Committee for Employment Initiatives);

seven institutional subjects at regional and local level (Calabria Region; Province of
Crotone; Municipality of Crotone; Prefect of Crotone; the local Chamber of
Commerce; two Consortium for the industrialisation and economic development of
Crotone);

eight social partners (the 3 main trade union confederations –Cgil, Cisl, Uil- at national
and local level; the industrial employers association at national –Confindustria- and
local level);

fifteen private employers.
The Area Contract included:
a.
“legality protocol”, with the aim to better coordinate state action against organised
crime, subscribed by the Head of the Police of Crotone, the responsible of other armed
forces based in Crotone, the mayors of several municipalities and the local social
partners;
b.
an agreement between trade unions at the local level (Cgil, Cisl and Uil) and the local
association of industrial employers regarding various measures of work flexibility (see
below in the text);
c.
an agreement between various public administration at local level, to simplify
administrative procedures.
17
concertation implies, at least, that all the subscribers share the goals and the
commitments defined by the Pact; identify the financial resources that should
be contributed, partly by companies and partly by the local authorities; define
the simplification of administrative procedures and the dispensation from legal
provisions aimed at helping speed up the implementation of the development
projects; set particular labour relations rules to be applied by companies
subscribing the Pact, in order to lower labour costs (although, as already said,
usually without directly violating the standard wage rates defined by national
collective agreements) and/or improve flexibility. These rules, agreed upon in
general terms in the Territorial Pact, have then to be specified in collective
agreements between the individual employers and trade unions at company
level.
Area Contracts have first been envisaged by the 1996 Pact for Employment
of September 1996 (see above). They also aim at promoting initiatives to
accelerate economic growth and to create new employment. The main
differences with respect to Territorial Pacts concern the territorial target of the
initiatives and the actors primarily in charge of promoting the initiative. Other
differences regard the structure of the agreement and the actors in charge of the
responsibility for its implementation (Albi, 1998a and 1998b). As for the first
issue, the areas interested are narrower than in the case of territorial pacts, and
regard those hit by deep employment crisis, often connected with the end of the
Partecipazioni Statali (the system of the state-owned companies), included
under the EC objective 1, 2 and 5b (occupational crisis, late development,
industrial decline and disadvantaged rural areas). In addition to these areas,
mainly located in the southern regions of the country, also a few other areas of
occupational crisis can be interested, located in regions of north and centre of
Italy, responding to criteria defined by l. 236/93. In any case, they are crisis-hit
areas, although their precise definition is attributed to the government Coordinating Committee for Employment Initiatives, and is at times troublesome,
giving rise to controversies (as it happened at the end of March 1999 in the case
of the contract of Gioia Tauro, that national Cgil refused to subscribe with the
government since it did not consider it a crisis-hit area)7.
With respect to the second issue, the primary promotional role is attributed
(by the Cipe deliberation of March 21, 1997) to the social partners at local
level, which have to reach an agreement about measures of flexibilisation of
working conditions. This agreement is the core of the Area Contract, and, in the
experience so far realised, its contents are more stringent than in Territorial
Pacts (Albi, 1998a). It must expressly mention the goals and the contents set
out by the Pact for Employment of September 1996, with reference to work
flexibility. As already noticed, in addition to this agreement, regional and other
public authorities at local and national level are involved, in order to simplify
administrative procedures, and, possibly, to strengthen police action against
organised crime. A further step is the evaluation on the part of the Ministry of
7
This episode reflects the fear of Cgil that an excessive extension of these instruments
would mean a generalised concession of sub-standard working conditions in entire areas of the
country, namely in the South. A fear that, in the case of Gioia Tauro, was not shared by the
other two main trade union confederations, which signed the contract.
18
Treasury to verify whether the requisites are satisfied in term of investment
projects, availability of financial resources (a relevant part of which is coming
from EC structural funds) and the designation of the individual subject in
charge for the coordination and implementation of the activities envisaged by
the contract, chosen among the public authorities undersigning the contract
itself.
Both Territorial Pacts and Area Contracts are based on an explicit exchange
between the State, the employers and trade unions. The State offers public
investments in infrastructures, subsidies and discounts in taxes and social
contributions to employers subscribing the agreements; the employers commit
themselves to bring productive investments in the area, with new employment;
the trade unions make concessions in terms of flexibilisation of working
conditions and lower labour costs, although mostly pursued through indirect
ways –like underclassification of employees- which formally do not violate the
standard wage rates fixed in national collective agreements.
In particular, the contents of the agreement between the social partners,
which is a relevant component of these instruments of “programmazione
negoziata”, especially of Area Contracts, somehow resemble the experience of
concession bargaining. For instance, in a typical area contract the main
measures, which are applied only to new hirings and which recall the contents
of the 1996 Pact for Employment, include (see Albi, 1998a, pp. 11-15; see also
the attached area contract of Crotone, signed in March 1998):

the possibility to classify new employees with training/work contract 2
levels (instead of 1 level) below their colleagues in similar jobs but with
permanent contract. This under-classification lasts for the entire duration of
the work-training contract plus one year after its transformation in a
permanent contract;

a similar treatment (that is, under-classification by 2 levels for 3 years) is
envisaged for the so-called “contratti di inserimento” (entry contracts),
whose aim is to provide incentives for employment of long-term
unemployed, of workers in wages guarantee fund (Cig, cassa integrazione
guadagni), of workers in “mobility” procedure and workers in Lsu (socially
useful works);

the possibility to recruit part-time workers and employees with fixed-term
contract in higher percentage and for additional cases than the standards
fixed by legislation or by national collective agreements;

a longer duration of apprenticeship contracts (4 years, the maximum
envisaged by the l. 196/97), and also a lower cost8;

various forms of flexibilisation of the working time, subject to a joint
examination between employer and trade unions, including the possibility to
utilise overtime to a greater extent than the quantity fixed by national
collective agreement;
8
P. Albi has estimated a 10-15% lower cost in comparison to apprenticeship contract
foreseen by the metalworkers’ national collective agreement.
19

four year moratorium of wage increases linked to company level collective
bargaining in new industrial establishments.
Among the employers subscribing territorial pacts and area contracts there
can be employers coming from any region of the country, provided that they
commit themselves to make new productive investments in the interested area.
This is the case, for instance, of an “additional protocol” (protocollo
aggiuntivo; see below) to the already mentioned area contract of Crotone,
which was subscribed, among others, also by a joint venture between
Assolombarda, the employers’ association of Lombardia, and the employers’
association of Crotone, to promote a project (“Locating in Crotone”) for new
investments in the area of Crotone, becoming therefore entitled to enjoy the
financial aids made available by the State and the concessions promised by
trade unions. Another example is given by the commitment of a group of
employers of Veneto (Treviso) to make productive investments in connections
with the area contract of Manfredonia.
The effect of these measures on the cost of labour is controversial.
According to some observers, all in all they would allow quite a large discount
on labour cost, by about 25-30% (Montanari, 1999, p. 275). Other observers
from the Centre of Study of Confindustria, the national confederations of
private employers, are more cautious, and underline that the difference in the
labour cost granted by the above mentioned-measures in comparison with other
areas located in the South of Italy, but not covered by territorial pacts or area
contracts, would not be so relevant. Moreover, the moratorium of company
level bargaining would be a modest benefit, since this kind of bargaining is not
widely diffused in South of Italy, and in any case the wage increases allocated
by it represent a small percentage of total pay (Rosa and Rossi, 1999). On the
other hand, they stress the importance of general discounts on taxes and social
contributions which cover the entire South of Italy in case of new (additional)
employees. Discounts that are however temporary, and that would not be
compensated, when they will be discontinued, by the reductions on labour cost
granted by the new instruments allowed by programmazione negoziata.
Up to February 1999, seven Area Contracts have been definitely approved
by the Ministry of Treasury, including 69 industrial projects for an amount of
614 billion lire of investment and 2361 new employees. All but one are located
in the southern regions (the exception is that of Terni-Spoleto, in the central
region of Umbria). Eight more contracts have been submitted and are now
under the assessment process, for a prospected new employment of about 5,300
units. Both trade unions and employers, however, complain of several delays
and bureaucratic difficulties. For instance, according to newspaper reports, in
one of the first contract approved (in early 1998), that of Manfredonia, only 3
firms would be actually operating at the end of the year out of the 11 which
undersigned the contract, with 71 new employees with training/work contract
out of the about 480 that were originally foreseen (see Corriere della Sera,
December 18, 1998; see also Il Sole-24 Ore, March 10, 1999, for delays in
public financial aids to firms due to bureaucratic obstacles).
20
The Territorial Pacts that at early March 1999 have completed the
assessment procedure and have been approved are 12 with the “old” procedure
and 23 with the “new” procedure (that is that defined by the Cipe deliberation
of March 1997), out of the about 100 which have been submitted for approval.
The amount of financial aids foreseen for the last 23 pacts is about 1,5 billion
lire, for about 12,500 prospected new employees. More than half of them are
located in the southern part of Italy, but a significant number also in the centre
and north of the country. In Spring 1999 a new selection will be carried out,
with a prospect of additional 10 pacts, to which other 10 pacts co-financed by
the EC have to be added, for a total of about 50 territorial pacts. It must be
noticed that both Territorial Pacts and Area Contracts are, so to speak, open
agreements, allowing the entrance of new actors (namely employers or groups
of employers), which can subsequently adhere subscribing “additional
protocols” in relation to new industrial or productive projects. For instance, in
March 1999, among others, the second “additional protocol” to the area
contract of Manfredonia has been signed, envisaging new investments for a
total amount of 1,067 billion lire, of which 768 billion funded with public
funds by Cipe, for a prospected new employment of 3,128 units.
On the whole, the amount of financial resources devolved to these
instruments is rather limited in comparison with other policies in support of
economically depressed areas or providing incentives for productive
investments. However, according to several experts, what matters is the new
character of these instruments, based -as already said- on the subsidiarity
principle and on the direct involvement of social partners and public authorities
at local level. They are oriented to the idea of development “from below”, as
opposed to the very centralised, top-down industrial and labour market policies
of the past. According to some observers, in fact, the failure of past policies for
economically depressed areas, namely in the south of Italy, would be due not so
much to the scarcity of financial resources as to the lack of capacity of
coordination between State and regional administrations and the weakness of
participation and responsibility of institutional and social actors at local level
(Trigilia, 1992; Montanari, 1999).
5. A summary of the main employment and competitiveness measures
As already mentioned, the contribution of collective bargaining to
employment protection and creation, especially at interconfederal or tripartite
level (concertation agreements), is seldom a direct one, but is often necessarily
mediated by the intervention of the law or of some administrative act. This is
less true in the case of the contribution of collective bargaining to
competitiveness. Here tripartite agreements on income policy, like that of July
1993 and December 1998, or collective agreements at sectoral and company
level -not only on wage issues but also on working time flexibility, on job
classification schemes or still other matters- may have a direct and relevant
impact on the competitiveness of a company, a sector or the entire economy,
without the mediation of a legislative intervention. And this is especially so in a
21
situation in which the devaluation of national currency is not any longer
available as an ex-post safety valve to offset irresponsible behaviour on the part
of economic actors (a safety valve which has been often utilised by Italian
authorities in the last 20 years), thus making ex-ante virtuous behaviour on the
part of firms and trade unions an indispensable contribution to competitiveness.
Although even in this field legislative measures have at times been necessary to
implement agreements between social partners, as in the case of the
introduction or the promotion of new types of employment contracts to increase
labour flexibility, which had been envisaged by both the 1993 agreement and
the 1996 Pact for Employment, but which required a legislative intervention to
be actually implemented.
As in the previous pages, therefore, also in the following summary it is hard
to disentangle measures that can be attributed to collective bargaining from
those that are due to the legislative process. The sequence, in fact, as already
noticed, is often from a measure agreed upon in a tripartite agreement, within
the social and economic concertation process, to a normative implementation
through legislative or administrative acts, to a further intervention of collective
bargaining at a lower level (sectoral or company level). This is the case, for
instance, of measures such as the new apprenticeship, or the so-called “gradual
alignment agreements”. But in other cases, the process may end with the
normative implementation, without requiring any further role of collective
bargaining. As it happens for some measures in favour of the innovation of the
productive system, with employment implications, which are included or
perhaps just mentioned both in the 1993 and the 1996 tripartite agreement, and
which have then been implemented in several normative acts which do not
have any connection with labour-management relations, like l. 341/97, l.
266/97, or the earlier l. 488/92 (and therefore we do not have listed them in the
following table, although).
The distinction between passive, defensive measures, which do not try to
influence –at least indirectly- the qualitative characteristics of labour demand
and supply, on one hand, and those which have a more pro-active, promotional
orientation (Tronti, 1998) it is perhaps easier, although it may be a little
debatable, depending at times on the evaluation of the observer, and also on
whether one considers the intentionality of the program under exam or its
actual implementation and outcomes. In the table below we do not have
included the traditionally passive measures as the wage guarantee fund (Cassa
integrazione guadagni); or the unemployment benefits, which in Italy, as it is
well known, are quite low; or the programs of early retirements, which have
been widely used during the ’80 and early ’90s, but are now on the way to be
abandoned. But, among the measures which have been listed, one can doubts
whether the socially useful jobs are active measures, as they intended to be,
trying to facilitate the re-entering into employment of long term-unemployed
persons, or just a way of granting an income to persons who had ended any
other program of income security (Cig, long mobility, etc.).
The same can be said about the distinction between employment protection
and promotion policies, on one hand, and competitiveness enhancing measures
22
on the other hand, as it seems the case for measures favouring more flexible
types of employment contracts or more flexible working time schedules.
With these qualifications, the following table summarises the main measures
which have been mentioned in the previous sections and a few others,
classifying them –to some extent arbitrarily- between active and passive
employment protection and promotion policies, and competitiveness enhancing
measures, as well as indicating their origin and their subsequent
implementation.
Table 3. Main measures introduced, reformed or mentioned by tripartite and
inter-confederal agreements since 1993
MEASURES
INTERCONFED.,
CONCERTATION
AGREEMENT
LEGAL
IMPLEMENTATION
ROLE
OF
COLLECTIVE
BARGAINING IN FURTHER
IMPLEMENTATION
Temporary work
July 1993; Pact
for Employment,
Sept. 1996
L. 196/97, art. 1-11
Sectoral collective agreements at
national level to identify the
cases in which temporary work is
admitted, and the low-skilled
positions for which it is
forbidden;
to
define
the
percentage of workers with
temporary contracts on total
workers with indefinite time
contracts; to introduce it on an
experimental basis in
agriculture and constructions
“New” apprenticeship
contract
(apprenticeship
originally introduced
in 1955)
July 1993 Agr.; L. 196/97, art. 16
Pact for Empl., Extension
to
all
Sept. 1996
sectors,
including
agriculture; extension
to young with high
school diploma
(previously only
young with intermediate compulsory
school diploma were
admitted); age limits
16-24 years
(previously the
upper limit was 20),
and 26 in the South;
duration between 18
months and 4 years;
training according to
standards agreed
upon between
social partners and
regional authorities;
financial incentives
to firms
ACTIVE
Sectoral collective agreements at
national level to define, among
others, the occupational profiles
admitted; its duration, within the
range from 18 months to 4 years;
training standards
23
Table 3. (continued)
Work-training contract February 1993;
(originally introduced July 1993 Agr.;
by law n. 864/84)
January 1995;
Pact for Empl.,
Sept. 1996
L. 451/94 (main
regulation); l. 608/96;
l. 196/97, art. 15
(generalisation of
the age limit to 32
years;
distinction
between 2 types of
contract, for high and
low skills; extension
of
employers that can
use it; extension of
incentives to firms
located in the
South of Italy (one
more year of
benefits, in addition
to the normal 24
months, in case of
transformation of
the WTC in
indefinite time
contract)
Fixed term work
July 1993
(possible utilisation
for
re-employment or
re-training
of workers in
“mobility”
procedure or
special
unemployment
treatment)
L. 196/97 art. 12
(allows firms a more
flexible utilisation of
this contract, before
the obligation to
transform it in
indefinite time
contract as
previously defined
by l. 230/62)
Working time
reductions and
flexibility, and part
time work
(incentives to)
Pact for Empl.,
Sept. 1996
L. 196/97, art. 13
(discounts in social
contributions in case
of bargained
reduction or
articulation of
working time,
especially when
finalised to new
employment or to
avoid lay-offs)
Sectoral collective agreements at
national level to identify the low
skill occupations not admitted to
WTC, and the positions admitted
only to high level WTC; possible
definition of additional training
Sectoral collective agreements at
national
level
to
define
reductions
and/or
flexible
articulation of working time over
the week or longer periods, up to
a year, possibly in connections
with new hirings or lay-offs
avoidance
24
Table 3. (continued)
Part time
(incentives to)
Pact for Empl.,
Sept. 1996
L. 608/96; l. 196/97,
art. 13
(additional incentives
–with respect to those
of the previous point
and to those defined
in l. 451/94- in a
series of cases, as
new employment of
young persons in
depressed
areas,
women
re-entering
the labour market
after to years of
inactivity and others)
Role of sectoral collective
bargaining at national level to
define some characteristics of
this type of contract, and to
extend it also to Agriculture
“Stages” (tirocini
Pact for Empl.,
formativi)
Sept. 1996
(to promote exchange
between study and
work experience, and
facilitate the
occupational choices
of individuals)
L. 196/97, art. 18
(some incentives to
non-Southern firms
offering stages to
young persons of the
Southern regions)
Gradual alignment
agreements
(contratti di
riallineamento o di
emersione)
Pact for empl.,
Sept. 1996
L. 608/96, and l.
196/97, art. 23
(fiscal and social
contribution
incentives to firms in
the South to
regularise irregular
workers and to
gradually re-align
wages to minimum
standards defined in
national collective
agreements)
Territorial
agreements
at
provincial level, and then at
company level, to define the
program of wage re-alignment.
Significant experiences in textile
sector
Area contracts
(contratti d’area)
Pact for empl.,
Sept. 1996
L. 662/96 and several
Cipe
deliberations
(among which of
particular importance
that of March, 21,
1997)
Agreement
between
social
partners participating to the area
contract, and then company level
agreements, to define flexibility
measures in exchange for new
employment
25
Table 3. (continued)
Territorial Pacts
(patti territoriali)
November 1994
L. 662/96 and several
agreement between Cipe deliberations
government and
social partners
Incentives to youth Pact for empl., Sept.
entrepreunership and 1996
“loans” for entrepreneurial projects of
young persons
As in the area contract (although
the agreement between social
partners
is
not
formally
considered indispensable for the
Territorial pact to be concluded)
L. 44/86; l. 95/95; l.
608/96
(originally limited to
the South, then to
areas at objective 1, 2
and 5b; one of the
most successful
active measures,
presented as “best
practice” in the 1998
NAP)
PASSIVE
LSU
(socially useful
jobs; originally
introduced in the ’80s)
Agreement,
nov.
1994; Pact for
Empl., Sept. ’96;
Social Pact, Dec.
1998
L. 451/94; l. 608/96;
l. 196/97, art. 20-22;
d.lgs. 468/97
(for workers to whom
any other form of
income security has
ended and for young
persons as form of
entry into the labour
market; initially and
intentionally an
active measure, then
progressively a
passive one, that
now the government
wants to limit and
gradually close)
“Traineeships” or
“work scholarships”
(borse di lavoro)
Pact for Empl.,
Sept. 1996
L. 608/96
reserved to young
people (21-32 age),
unemployed for
more than 30 months
in regions where
unemployment is
particularly high
(South); they are part
of an extraordinary
program ending 1999
26
Table 3. (continued)
Solidarity agreements
(contratti di
solidarietà, originally
introduced by
l. 864/84)
July 1993 Agr.
L. 263/93; l. 451/94 Company level agreements
(additional incentives
to firms to use this
type of worksharing, in case of
redundancies, to
avoid dismissals)
Tax and social
Pact. For Empl., Several legal
contribution benefits Sept. 1996; Social measures
to firms in case of new Pact, Dec. 1998
(net) employees with
indefinite
time
contracts (especially in
the South and for
young persons)
COMPETITIVENESS
Cuts on social
contributions for
company level
“participatory” wage
increases
July 1993
L. 135/97; budget
Agreement; Social law for 1999
Pact, Dec. 1998
(discounts on social
contributions paid by
the firm up to an
amount equal to 3%
of individual’s total
gross wage)
Company level agreements on
(variable) wage increases linked
to results in terms of quality,
productivity, competitiveness
6. Industry-wide and company level bargaining
Employment preservation or creation have not been covered systematically
by industry-wide bargaining until recent times. Usually industry-wide
agreements included procedural norms that forced parties to a preliminary
consultation in case of company reorganisation. During this consultation trade
unions and employers had to consider the use of instruments alternative to
dismissals, such as contratti di solidarietà (“solidarity agreements”, that is
company agreements which in order to avoid lay-offs introduce a reduction in
working time and pay for all workers) or working time reductions.
An important exception to this rule is the textile and shoe industry-wide
agreement that already in 1990 introduced the possibility of signing “gradual
alignment agreements”. Gradual alignment agreements were conceived in order
to make advantageous for small subcontracting companies taking on formally
workers that had previously been undeclared. Through gradual alignment
agreements the wage of workers is gradually put in line with minimum wage
levels set by the relevant industry-wide agreement. This gradual alignment
takes 36 months and usually starts from a level of about 70% of the minimum
bargaining wage. This possibility has been backed by legislative measures that
from one side discounted the legal consequences of past irregularities in the
27
case of participation in the ‘alignment programme’ and from the other granted
reductions in social contribution for the ‘catching up’ period and the benefits
linked to new employment creation when the full alignment is accomplished. In
particular, the Pact for Employment of September 1996 envisaged the
extension of this experience to other sectors and the law 196/97 implemented
this provision for all companies operating in Southern Italy. Also the 1999
Budget Law introduced some modifications in the rules applying to alignment
agreements, basically reducing the incentives available for companies and the
areas where they can be signed. Therefore, the Social Pact of December 1998
also included a government commitment to reaffirm the financial support of
companies entering the alignment process.
After the experience of the textile and shoe sectoral agreement, in recent
years, the issue of preserving and creating employment has gained an important
place in industry-wide bargaining, following the top priority that employment
creation has progressively acquired in tripartite bargaining and in the debate
over economic policies, also at European-level. Among last year’s agreement
renewals, the sectoral agreement for the chemicals sector is of particular
interest. The agreement, in fact, introduced a number of innovations namely in
the field of working time, introducing the possibility of using more flexible
schedules, which should help improve company competitiveness, increase the
opportunities for new hirings in disadvantaged areas, and provide instruments
for managing reorganisation processes with lower social impact:
a) the working week is fixed at 37 hours and 45 minutes as an average, since
the actual weekly schedule may vary between 28 and 48 hours, depending
of company requirements and following a specific agreement with the
plant-level trade union representative body;
b) a new regime for overtime through the establishment of an ‘hour bank’
system. That is, 50% of overtime will paid to workers, while the rest will be
credited to a ‘personal hour account’. The worker will then decide whether
to receive a payment for this credit or to use it as time-off. In special cases,
it would also be possible to utilise such credit on a collective basis;
e) the definition of an ‘entry working time’, that is a contractual working time
of 24-32 hours with a proportionate reduction in pay for all new hirings
(both for new enterprises and for the expansion of existing ones) in crisishit areas (Southern Italy and all other areas identified as such by Italian or
European legislation);
f) in case of company restructuring or reorganisation, the temporary collective
use of the working time reductions granted by the sectoral agreement, and
also of a limited amount of the stock of individual available holidays, is
envisaged in order to retain employment levels. Further working time
reductions are then taken into consideration through the use of contratti di
solidarietà. Finally, the chemicals sectoral agreement introduces the
possibility to resort to a combination of re-qualification programmes and
the transformation of full-time contracts in part-time arrangements for
28
workers who need professional upgrading, either for re-employment within
the company or in view of outplacement.
Another important instance of bargaining over employment preservation is
the recent bargaining round over the restructuring of the banking sector. The
two agreements of 28 February 1998 cover the implementation of a Fund for
income and employment support in the process of banking restructuring and the
definition of a more flexible framework regulation to be introduced by the new
sectoral agreement now under negotiation (and which is still far away from
conclusion).
The main guidelines included in the framework agreement which should
lead to innovations in the sectoral agreement are: the implementation of a
higher working time flexibility; the possibility of employment contract
flexibility, namely though the use of temporary agency work, fixed-time
contracts and work-training contracts for new hirings; a diversification in the
national collective agreement applied to different business units depending on
the actual activity which they are involved in (now basically all companies
belonging to banks have to apply the banking industry-wide agreement, even if
they carry out only ancillary services for banks); a higher share of performance
bonuses out of total annual wage. The objectives of all these provisions are to
lower costs, especially labour costs, and introduce work flexibility “as the
rule”, rather than the exception, as it was the case in the past. This is also
important in view of the massive lay-offs that have been declared in the sector.
6.1 Company-level bargaining
Company-level bargaining has covered the issue of employment more often
than all other levels. Most common examples refer to company restructuring
processes and therefore concern mainly preserving employment. Anyway, also
relevant instances of company-level agreements on creating employment do
exist.
With reference to employment preservation, agreements often concern the
utilisation of the traditional instrument of the Wages guarantee fund or more
recent tools as contratti di solidarietà and mobility procedures. A remarkable
example is that of the Italtel agreements of January 1994 and April 1995 that
eventually involved more than 8,000 employees (out of a total of some 14,000)
with a reduction in redundancies of about 1,600 workers (out of an initial
declaration of 2,290 redundancies)
Other, more innovative examples include the Falck Sesto San Giovanni
agreements and the Galbani reorganisation agreement. The former covered the
progressive closing down of the Falck steel plants in Sesto San Giovanni, on
the outskirts of Milan. The process started in 1991 and ended with a final
agreement at the beginning of 1996 covering about 1,000 workers, from an
initial number of some 2,150. During the whole process no dismissals have
taken place. The agreements defined the use of several tools: early retirements,
‘long mobility’, ‘incentives for resignations’, the use of the Wages guarantee
fund and outplacements. Then, the agreement also provided for a re-
29
industrialisation project for the areas left by the steel plants. Most workers
covered by the final agreement have been re-employed (about 600).
The Galbani agreement of July 1997 provided for the redeployment or
outplacement within 1999 of most of the 1,200 workers made redundant by a
reorganisation programme. A part from incentives for individual resignation
and support for outplacement through the creation of in-company ad-hoc
offices, also a re-industrialisation programme has been part of the measures
used by the company in order to lower the social impact of restructuring.
An interesting and peculiar case of bargaining over employment
preservation is that of Electrolux-Zanussi which in December 1997 signed a
company-level agreement that in exchange of greater productivity, achieved
though higher work flexibility, assured no plant closures in Italy. In fact, in
early 1997 Swedish-based Electrolux group announced a world-wide
reorganisation programme which should affect all of its plants and the Italian
ones among the others. The December 1997 agreement not only avoided the
closure of Italian plants (the group planned to close down a total 15 plants
world-wide), but could possibly lead to a shift of production to Italy, with some
relevant increase in employment.
The main points of the agreement were:

an increase in productivity of 12% to be reached through lower labour costs
and higher flexibility;

the use of a hour bank system for overtime, instead of paying it to workers;

the non-application of company wage to newly-recruited workers, for a
period of 2 years;

newly-recruited workers employed in plants where the weekly schedule is
less than 36 hours will receive a proportional wage, instead of the
contractual 40 hour-based one;

about 400 redundant workers will be redeployed within the ElectroluxZanussi group.
As far as employment creation is concerned, the agreements for the
localisation of new plants are particularly important.
A relevant case is that of Fiat Melfi (in the South of Italy) which led to the
creation of a company that employs some 7,000 workers9. As far as collective
bargaining is concerned, two agreements signed in 1990 and later in 1993
granted work flexibility in terms of job rules, working time and wage levels.
Wage flexibility was attained by the introduction of an high proportion of
variable wage that links pay to a set of economic performance indicators. Such
variable part can reach up to 100% of the basic wage.
An instance of restructuring combined with employment creation is the
Marzotto agreement of April 1996 that concerned the Praia a mare plant
It is important to mention that this “greenfield” investment was supported by the
significant incentives linked to the localisation of production in southern Italy and by specific
infrastructural investments.
9
30
(located in Southern Italy), providing for its reorganisation and for the creation
of a new production unit. By that agreement, trade unions and the company
agreed on a new shift scheme for the new production unit that would follow the
seasonal trend in demand: 28 weeks at 48 hours per week and 20 weeks at 30
hours. Then, all new hirings could be made using work-training contracts. For
staff made redundant (60 workers), the intervention of the extraordinary Wages
guarantee fund was requested.
7. Final remarks
To conclude, how to assess the experience we have analysed in the previous
sections? And, more important, what is the evaluation of the social partners?
According to recent comparative reconstructions (Reyneri, 1997 and 1998;
Esping Andersen, 1999), the labour market regulation in Italy belongs to a
model which combines a very strict level of employment protection (especially
for adult males), low unemployment benefits, wide use of early retirement, high
financial transfers to families. From this a structure of unemployment derives
which has been shortly summarised in section 2: comparatively low
unemployment rates in strict sense, in contrast to an extremely high percentage
of persons in search of their first employment; a composition by age and gender
which sees young persons and women in a much more disadvantaged position
than adult males; a high percentage of long-term unemployment; and finally a
clear territorial cleavage between the centre and northern regions on one hand
and the southern part of the country on the other hand, where all the previous
characteristics are much more severe, up to forms of real social exclusion.
These features were combined also with a very formal and bureaucratic type of
governance of labour market issues, based on (formally) severe controls of
administrative agencies but little capable to favour a good match between the
demand and supply of labour.
The ’90s saw a serious effort, although far from being completed, to
promote a double shift in the above mentioned situation: towards a model of
macro-social regulation carried out through the collaboration between public
authorities and the social partners; and towards a policy mix more based on
pro-active, promotional measures than in the past (Reyneri, 1998). There is no
doubt that the practice of concertation between government and the social
partners, with the subsequent collective bargaining experience at sectoral and
company level, have been of crucial importance to this purpose. In particular,
the July 1993 agreement explicitly established the role of social concertation on
labour market, employment and competitiveness issues, often extending this
practice also to the preparation of laws, norms and rules devoted to the
implementation of such policies (Cella-Treu, 1998). A role which was
confirmed by the Pact for Employment of September 1996, large sections of
which were implemented by the l. 196/97, and again by the Social Pact of
December 1998. Also in company level collective bargaining, working time
and, to a lesser extent, labour market issues have been in recent years widely
dealt with in negotiations; while wage issues, often in the form of variable
31
bonuses related to some kind of competitiveness measure of the firm, have
sharply increased their frequency in the agreements and in some surveys appear
as the most recurrent matter dealt with (Bordogna, 1997 and 1998; NegrelliPedersini, 1998).
The overall results seem however uneven, although it is difficult to precisely
assess them in quantitative terms. Apprenticeship contracts and work-training
contracts have been and are being widely used, and often are transformed in
indefinite time employment contracts. Fixed term contracts and part time
contracts still represent in terms of stock a small percentage of total
employment (8-9%), but in recent years they have been increasingly utilised by
firms for new hirings, especially by medium size and large firms. Also
temporary work contracts, despite the troublesome implementation of this
measure even after the l. 196/97, seem to have had a fair success.
However, the outcome of other measures is more problematic to evaluate.
Lsu (socially useful works) have also been widely used, but it is hard to classify
them as a pro-active measure, despite their original intentions, as is the case of
early retirements (although their use has been decreasing in recent years).
Among the most innovative measures there are probably the territorial pacts
and area contracts, within the wider design of “Programmazione negoziata”.
They represent in fact an interesting new approach to the problem of
unemployment in the southern regions of the country, with a clear exchange
between flexibility, competitiveness and employment promotion. An
innovation which is very much appreciable, thanks to the attempt to create a
social environment favourable to and attractive for new investments, and to
promote economic and employment growth from “below”, actively involving
the responsibility of social partners and public institutions at local level. But
they have so far met strong bureaucratic obstacles, so that employers, after
having supported and encouraged these new instruments, seem rather
disappointed, and more and more often declare their preference for other
measures (like l. 488/92, l. 341/95 and 266/97), which are in their opinion
much easier for firms to apply to and much quicker in recognising to firms the
financial incentives (usually in form of automatic tax benefits), on the ground
of objective parameters. And also, according to them, much more effective in
terms of creation of new employment.
In brief, the final picture seems still a rather mixed one.
32
PART II. CASE STUDIES
8. Electrolux-Zanussi
In the summer of 1997, the Sweden-based white goods Electrolux group,
which employs world-wide some 100,000 workers, announced a two-year
reorganisation plan for its production sites all over the world. The plan was
presented in two sessions to the Electrolux European Works Council, in July
1997 and in November of the same year. The main objectives of the
reorganisation process were to gain competitiveness, in an economic context
characterised by excessive production capacity, stagnating demand, decreasing
prices and increasing competition by non-EU producers. The long-term goal is
to reach an operating margin of 6.5-7% and a return on equity of 15% for the
group as a whole. For these reasons, Electrolux devised a programme for
closing down several production sites and warehouses (25 and 50 respectively),
relocalising the production capacity in the most competitive sites. Overall
12,000 jobs were declared to be at risk.
In this general reference framework, negotiations started to take into account
the effects of the reorganisation plan on the Italian branch of Electrolux: the
Electrolux-Zanussi group. The Electrolux-Zanussi group has in the whole
country some 30 production units for home white goods products, professional
appliances, and spare parts. It employs more than 13,000 people. In September
and December 1997, two group-level collective agreements were reached,
aiming at preserving employment in the Italian sites by increasing productivity
by 12% on average.
8.1 The “Zanussi model”
It is worth mentioning that Zanussi set up in the 1990s a quite developed
system of workers’ participation which is unique in Italy. The “Zanussi model”
is based on a very wide system of joint committees which found their latest
definition in the “Unitary Text on the System of Relations with Trade Unions
and of Participation” signed on 21 July 1997. The main joint committees at
plant-level are:

Joint committee on environment issues and workplace safety: among other
things, it is in charge of investigations over work environment;

Joint technical committee: it examines production organisation, training
paths and it can take part in dispute resolution;

Committee on equal opportunities: it is responsible for promoting women
condition and for fighting against sexual harassment.
At Group level we can find the following joint bodies:
33

Coordination centre for plant level committees: it coordinates the activities
of plant level committees;

Committee for joint training: its task is to design training programmes for
building up “shared participatory values”:

Special committee on work issues: it promotes and supports innovation in
work organisation;

National joint committee for equal opportunities and socio-professional
integration: among other things, it promotes affirmative actions and
performs formal procedures in case of sexual harassment;

National guarantee commission: it is a very important body since it has a
dispute-resolving role. It has 7 members: 3 trade union representatives, 3
company representatives and a chairman chosen by mutual agreement;

Supervisory board: it is a joint body (3 company representatives and the
same amount from trade unions) which has the right to be consulted before
main industrial and organisational decisions are taken.
The negotiations over the reorganisation of the Italian sites were carried out
within such a “participatory environment”.
8.2 The agreements
The first agreement was signed on 30 September 1997 at the Ministry of
Industry, Commerce and Crafts by the sectoral federations Fim-Cisl, Fiom-Cgil
and Uil-Uilm, the trade union representative coordination committee of the
Electrolux-Zanussi group and the plant-level representatives.
The agreement acknowledges the great competitiveness deficit of some
Italian sites, as it was illustrated in the reorganisation plan presented in July
1997, and the possibility of delocalisation of four production lines in particular.
In order to avoid delocalisation and employment reduction, the parties agree the
following:
1. one of the production lines will be moved to another location, but
redundant workers will be redeployed to other productions in the same site;
2. a second production line will be terminated and moved, while the rate of
utilisation of the remaining lines of the same kind will be improved thanks
to new, “longer and more rational” working time schedules. Such
reorganisation and working time changes will completely offset the
vacancies caused by the closure of one production line. In the framework of
the company participatory system, a joint plant-level technical committee
will define the new working time schedule. If this committee fails to reach
agreement, negotiations will move to the national group-level. Only, if no
agreement is reached at national level, the decision will be taken
unilaterally by the company, within the limits set by the industry-wide and
company-level agreements;
34
3. as far as the third production line is concerned, trade unions committed,
starting from 1 November 1997, to increase: a) the average productivity
per-head by 10%; b) the capacity to react promptly and flexibly to demand
peaks. The actual measures to be taken in order to accomplish such targets
will be defined by plant-level negotiations, to be concluded by 25 October
1997;
4. the measures concerning the fourth production line will be decided in a
following bargaining round to be completed within 30 November 1997,
with the assistance of the Ministry of Industry.
This latter bargaining round will establish:

the business plan, as well as the industrial and employment prospects for
the Electrolux-Zanussi group in order to strengthen and develop existing
sites in Italy;

the competitiveness gains to achieve the above-mention results;

the joint definition of the employment effects of gains in competitiveness;

the most appropriate measures to foster innovation and environment
protection in the sector of white goods production.
The second agreement signed on 6 December 1997 was the result of the
negotiations mentioned at the end of the previous one. The agreement once
again refers to the restructuring process of the Electrolux group activities,
namely in Europe, and affirms that the parties share the commitment to
overcome a relevant competitiveness deficit in order to achieve a “structural
development of competitive capacity of the Electrolux production system in
Italy and of employment levels”. The operational tools that should help reach
these objectives (increase in competitiveness and - at least - employment
preservation) are:
1. the improvement of the organisational flexibility of production;
2. the increase in productivity and efficiency of production, distribution and
sales;
3. the reduction in overhead costs, through a simplification of processes;
4. the integration and rationalisation of organisational systems;
5. the improvement of product quality and innovation, taking into
consideration environment protection;
6. the rationalisation of the significant amount of planned investments;
7. the increase in production and market shares.
The quantitative result of all the above-mentioned measures will have to be
an increase in the net industrial competitiveness of the Electrolux-Zanussi
group by 12% over two years (December 1997-December 1999); ‘net industrial
competitiveness’ will be calculated excluding all possible benefits resulting
35
from new investments, increase in production volumes, change in production
mix or decisions about ‘make or buy’ policies. If this target will be achieved in
the planned period, the Electrolux-Zanussi group confirms that “its industrial
sites in Italy will be characterised by an acceptable level of international
competitiveness and therefore no divestment will involve them in the medium
run”. At the same time, no “massive reduction in the number of direct bluecollar workers” is envisaged in the two year reference period (December 1997December 1999).
In this same period, however, the following changes are possible:



the move and centralisation of ‘staff’ functions and services when they
concern workplaces which are distant no further than 50 Km from each
other, even if they formally belong to different companies.
the outsourcing of specific activities.
the delocalisation of specific productions, in accordance with the overall
Electrolux group reorganisation.
The agreement then “operationalise” the competitiveness gain objective in
terms of the average per-head output and defines in greater detail the targets to
be reached by each plant. Within 31 December 1999, the expected average perhead output increase in the Italian sites is 9.2%, ranging from 6.2% up to
12.5%, depending on the specific plant and production line. The definition of
actual measures and solutions to be taken in each workplace will be defined by
plant-level bargaining within 31 January 1998. The conformity of all this
process to the targets set in the agreement will be assessed by in a special
meting between the Supervisory Board and the group top management.
If a site does not fulfil its target, the commitment to avoid both the
divestment of the plant and the implementation of a massive employment
reduction would no longer apply to that specific site. Should this situation be
widespread or should it involve major plants, the provisions over divestment
and employment protection would no longer be valid for all the country.
Even if the agreement leaves to plant-level negotiations the definition of the
specific measures to achieve the competitiveness/productivity targets, it
nevertheless provide for more flexibility in terms of working time, employment
relationships and wage levels (and working time) for new recruits.
As far as working time is concerned, starting from 1 January 1998, each
plant management may demand to exceed collectively, after having informed
local trade unions and workers’ representatives, the contractual weekly working
time up to a maximum of 48 hours per week (with a maximum of 96 hours a
year, that is 12 weeks) in order to cope with seasonal or cyclical demand peaks.
Correspondingly, in periods of lower demand, the plant management will
dispose the compensation of such working time increases by either collective or
individual time off. The monthly wage will reflect in any period the contractual
weekly working time, regardless of the actual time worked. A lump-sum
increase of 20% will be paid in the periods of higher demand for the hours
exceeding contractual weekly working time.
36
For individual overtime work, a system of “time saving accounts” or the socalled “hours bank” is introduced. Each worker on an indefinite time contract
may opt, instead of receiving the payment for overtime work, to convert
overtime in time off to be saved in an individual “hour account”. When a
worker works overtime, he/she will receive only the immediate payment of a
10% bonus for overtime work, while he/she will have the possibility of using
the time off he/she set aside in the “time saving accounts” for full-day leaves.
There are no deadlines for using the saved time off. In any case and anytime,
the worker may ask for payment of the time off credited in the “hour account”.
As far as the employment relation is concerned, the agreement extend the
possibility of using fixed-term employment in case of:
g) intensification of industrial activity linked to seasonal, cyclical or
episodical reasons, as well as commercial needs related to new product
launches, international orders, sales promotions and spot deliveries;
h) new equipment debugging, or in general significant technological or
equipment innovations, industrial reorganisation or production conversion.
The maximum duration of fixed-term contracts sub a) is nine months, and
people hired with these contracts cannot exceed 8% of the total labour force in
the relevant workplace. The second type of fixed-term contracts cannot exceed
12 months of duration and can involve a maximum of 10% of workers in the
same production unit. If a specific collective agreement is reached, the limits in
terms of share in the labour force may be increased up to three times. The
contracts cannot be reiterated more than once, for a period not exceeding their
original duration.
Finally, all new recruits hired after the conclusion of the agreement,
excluding those with work-training contracts and apprenticeships, will receive,
for a maximum of two years, only the minimum wage rates established in the
metalworking industry-wide agreement, and for the first year they will be
entitled only to 20% of performance pay. On the other hand, the company will
guarantee a minimum of 40 hours of vocational training, including on the job
training.
Alternatively, new recruits working on shiftwork with a weekly schedule
structurally below 36 hours will be hired on a vertical part-time contract and
therefore paid proportionally to the actual working time. This arrangement will
not last for longer than 36 months. As well as in the previous case, the
company will assure for these workers a minimum of 40 hours of vocational
training, including on the job training.
The agreement includes the declaration of 349 redundancies, as the final
element of a previous reorganisation process started in 1996 for reducing
structural and overhead costs. Employment reduction will involve 154 bluecollar and 195 white-collar workers. Furthermore, also 25 managers will be
dismissed.
All of blue-collar positions affected by employment reduction are indirect
and therefore outside of the pledge not to proceed to “massive reduction in the
number of direct blue-collar employees” (see above) taken up by Electrolux-
37
Zanussi. Besides, all redundancies should be dealt with by using measure
alternative to collective dismissals (that is the so-called “mobility procedure”).
In fact, each redundant worker may opt for the following solutions:
1. individual resignation with economic incentives. Each worker would
receive a fixed amount of money proportionate to its job grade (from a
minimum of 15 million lire to a maximum of 28 million lire), plus 30% of
its annual wage times the number of years he has worked in the company;
2. the transformation of employment relationship. White-collar workers who
do not opt for individual resignation will be transferred to blue-collar
positions, with the corresponding job grade and wage level. Their salary,
however, will be supplemented by an integration to reach the previous
individual wage level. Such integration will be progressively reduced by
any wage increases of both legal and contractual origin. Blue-collar workers
will be redeployed to direct positions with the respective job grade and
wage level. The same provisions as for white-collar workers for salary
integration apply to blue-collar employees. The redeployment of these
workers should take place in the same production sites or, when this is not
possible, in the nearest site to the place where he/she lives.
3. should the redundant worker refuse both alternatives, he/she will enter the
ordinary mobility procedure
Other provisions included in the agreement cover the experimental
activation of workplace crèche, where the presence of female workers is
significant and conditions are favourable, and telework; the preparation of a
social report in envisaged, in order to assess the impact of company activities
on internal and external stakeholders; and projects in the field of training,
especially for members of joint committees. Furthermore, the company
reaffirms its commitment to equal opportunities.
In conclusion, some words on the results of the Electrolux-Zanussi’s
agreements. In terms of employment levels they can be considered positive: the
average number of employees in 1998 has been almost identical to that of 1997
(13,215 employees against 13,306, respectively). Both the company and trade
unions are satisfied with the outcomes. In particular, the results in terms of
competitiveness and productivity have been in line with the expectations and
the terms of the agreements. Only in one case the targets have not been met.
However, the parties are working jointly to solve this specific problem. In
general, it may be said that the shared commitment to reach the targets through
a joint implementation and supervision is proving a key feature of this
collective bargaining experience.
8.3 Commentary
Two are the most important characteristics of the Electrolux-Zanussi’s
agreements. The first one is that they do not involve significant employment
reductions. In fact, they are devised to avoid a decrease in employment levels.
38
Usually, agreements on restructuring processes start from a company’s
declaration of redundancies. Then collective bargaining takes on the objecting
of limiting the loss of jobs and of finding alternatives to outright
unemployment, through the use of “passive” interventions, like the use of
traditional measures (Wages guarantee fund, early retirements, etc.), or more
“pro-active” ones, such as redeployment and outplacement. In the ElectroluxZanussi’s case, collective bargaining has acted “in advance”, still under the
threat of divestments and “massive” employment reductions, but with no clear
identification (at least within the agreements themselves) of jobs at risk. On the
contrary, the agreements envisage the possibility that the competitiveness gains
made possible by the agreements might produce some employment creation
effects.
The second interesting feature is that they are reached in the framework of a
world-wide restructuring programme, where employment cutbacks are actually
identified. In this sense, it is possible to say that while the first point might lead
to “label” these agreements as a “positive sum game”, this second one
counterbalances it, and would suggest their classification as “zero sum game”
within the whole Electrolux group. In fact, the agreement on productivity
increases in the Italian sites did not impact on the number of redundancies and
plant closures declared by Electrolux. At the end of 1998, the targets of the
original reorganisation plan were still there: 12,000 personnel cutbacks, 25
closures of plants and 50 closure of warehouses. The degree of implementation
was quite high, almost 80% of employment reduction and of shutdowns
(Electrolux 1999). In this, it is possible to identify an almost ironical
contradiction: while traditional “passive” interventions might succeed in
limiting the number of dismissals, this innovative and pro-active intervention
must be considered in the light that it apparently did not help reduce
redundancies not even by one unit. It only moved them to other international
locations.
Other important features of the collective bargaining experience now under
review are:

it centres directly on productivity and competitiveness and identifies clear
targets. It is possible to say that all restructuring programmes are based on
considerations about competitiveness. However, it is difficult to find
examples of collective agreements which explicitly mention competitiveness
indicators to be improved (another instance is the industry-wide agreement
of 18 February 1998 for the banking sector - see General Overview). In fact,
often employment reduction itself is one of the major measures used by
companies to improve competitiveness. Here, it is basically different, since
the competitive gains are to be achieved through organisational changes and,
more directly, by flexible work practices (in terms of employment relations,
wage levels, and working hours);

it was carried out within a quite developed “participatory” framework. The
implementation of the agreement’s provisions and the supervision of their
results are substantially carried out through plant- and group-level joint
committees. In this sense, it is possible to say that, besides the concrete
39
measures on work flexibility, the commitment for a high trust industrial
relations environment is regarded as relevant for achieving the
competitiveness targets.
9. Falck Sesto San Giovanni
In the early 1990s, the Falck group started a wide reorganisation process of
its steel production activities which would have lead to their complete
divestment. However, in its early stages, the restructuring process was meant to
support a rationalisation of processes with a connected decrease in production
costs and an improvement of competitiveness. This is the objective of the 24
July 1991 agreement which aims at improving sales and marketing structures,
as well as strengthening the production system. Different measures should help
this programme: total investment for more than 85 million Euro10, a
specialisation in certain product niches, a high rate of utilisation of equipment,
a more flexible organisation, including flatter structures, leaner organisation
and increased delegation of decision-making, the concentration on core
activities and outsourcing of peripheral ones, a better stock management, and
so forth. The overall employment impact of these interventions should result in
1,234 redundancies, out of a workforce totalling 4,725 people and spread
among nine different plants. The instruments to be implemented to manage
these redundancies were:
1. the utilisation of the Wages guarantee fund for 1,416 people for a period of
two years;
2. early retirements (which should involve 873 workers);
3. the suspension of the replacement of ordinary turnover;
4. the provision of incentives for individual resignations;
5. the redeployment of redundant workers to other positions in the same
company or within the group;
6. professional re-qualification.
9.1 The second reorganisation plan: the agreement of May 1993
Despite the reorganisation programme, the competitive situation of the Falck
steel factories did not improve in the following two years. In May 1993, the
company and trade union representatives met at the Ministry of Labour and
Social Security. The company illustrated the economic difficulties it was facing
due to the crisis that hit the steel sector, the still too high overhead costs and the
impelling need to improve productivity and efficiency levels in order to cope
with the ever strong competition. As a consequence of these enduring
problems, a further reorganisation plan was defined, which would also aim at
10
All values have been converted in Euro so that comparisons may be easier. The fixed
conversion rate of 1 Euro/1936.27 ITL has been used.
40
diversify the Falck group activities. The redundancies linked to the new
restructuring process were 1,009 and the employment envisaged at the end of
the process was 2,187 people. Another phase in the utilisation of the Wages
guarantee fund was then started.
Two new items appear in the list of operational tools to be used to manage
redundancies: a) working time reduction, and b) re-industrialisation, reconversion and re-qualification of the areas in Sesto San Giovanni (about 1.5
million squared metres) which should lead to the creation of job opportunities
related to the necessary building works and to the localisation of other
manufacturing, service and research activities, with a corresponding long-run
positive employment impact. These two new actions should be supported
respectively by the legislative provision of economic incentives for collective
working time reductions (the so-called “solidarity agreements”, contratti di
solidarietà), and by the new strategic policies of the Falck group.
In particular, the working time reduction involves 220 workers in the Sesto
San Giovanni plants with an average reduction of 10 hours per week. Such a
reduction would last for six months on an experimental basis. By the end of
1993, the parties had to meet in order to evaluate the possibility to prolong the
reduction for further 18 months.
Another “innovation” related to the new legislation on reorganisation
processes is the utilisation of the “mobility procedure” to “accompany” workers
to retirement (an alternative to straightforward early retirements). This
procedure is envisaged for 206 employees and, whether it were possible in
future years as well, it is assessed that it could cover some more 180 workers.
9.2 The intervention of local authorities: the re-industrialisation of the Sesto
San Giovanni sites
In the third phase of the reorganisation process of the Falck group, the
project takes a clearer orientation towards the divestment of steel productions
and the creation of new activities. The participation of local authorities
becomes important for the necessary administrative steps for the reconversion
of the industrial areas. At the same time, a specific legislation for the reduction
of the production capacity in the steel sector (law 481 of 1994), in the
framework of an equivalent European Union policy, provides significant
economic resources for supporting the creation of the new economic activities.
On 26 October 1995, the company and trade union representatives, together
with the Regione Lombardia and the council of the town of Sesto San
Giovanni, signed an agreement over the re-industrialisation process which
included the following initiatives:
1. environmental projects to be developed by the Falck group which would
employ 180 redundant workers;
2. about 80-100 workers will be redeployed in holding, administrative and
managing activities within the Falck group;
3. some 30-50 workers will be hired on fixed-term contracts for the
dismounting and liquidation of the steel production;
41
4. other people may be employed in the activities connected to the
environmental remediation and preparation of the areas left by the steel
factories;
5. the creation of an area for SMEs which should be completed in 24-36
months and might involve 200 workers. However, the employment impact
is really difficult to estimate and the full implementation of the project will
take place only after the expiration of the available income support
measures;
6. the development of a logistics project (a freight village, railway terminals
and so forth), which has to be assessed in the framework of the Regional
Transport Plans (the administrative instrument for planning the
development of transport and infrastructures) and together with the State
railways;
7. the creation of a service centre. This option requires the intervention of the
local authorities in order to define the transformation of the destination of
the divested areas;
8. the re-industrialisation of a portion of the industrial area which would
involve 40 former Falck workers;
9. the regional authority will make any effort for finding job opportunities for
the redundant Falck workers, through the involvement of the local
employers’ associations and of the specific national and regional bodies
responsible for supporting steel production reconversion.
After this first agreement, the Ministry if Industry and the Ministry of labour
were involved, in order to support the re-industrialisation projects and define
the forms that the restructuring process should take. In a meeting held at the
Ministry of labour on 9 January, the establishment of the company Siderservizi
was agreed. This new subsidiary of the Falck group will hire the redundant
workers and arrange for the necessary training and professional re-qualification
programmes. Siderservizi will have access to the Wages guarantee fund for 24
months which will grant income support to the workers involved up to the
expected starting date of the new economic initiatives funded by the law
481/94.
9.3 The agreement of 13 January 1996 on the Sesto San Giovanni plants
The main agreement for the Falck reorganisation was signed on 13 January
1996 by trade unions, company representatives, the Regione Lombardia and the
city council of Sesto San Giovanni, the Development Agency for the Northern
Milan Area, the local Employment Agency, the Agency for Entrepreneurial
Development (Spi), and two real estate companies. The agreement covers 952
people, which represent the residual workers of the Sesto San Giovanni steel
factories.
The participation of local authorities, in the framework of “programmazione
negoziata”, is particularly crucial for helping speed-up all administrative
42
procedures linked to the new activities. Besides, they can provide important
support in the application for public funds and in reaching agreements for the
outplacement of redundant workers in public-owned companies.
The main points of the agreement are:
1. the closure of all steel activities in the Sesto San Giovanni plants and the
divestment of all steel production;
2. the development of new economic initiatives funded by the law 481/94
which should involve 630 redundant workers, namely for environmental
activities (180 workers), the creation of a SMEs centre (150 workers), and
the environmental remediation of the divested areas (300 workers);
3. the utilisation of the Wages guarantee fund for two years to support the
redeployment and outplacement of redundant workers.
In particular, the Falck group commits itself to hire 180 workers within two
years for the environmental projects and to start the environmental remediation
of the divested areas. The local authorities commit themselves to support the
creation of 90 jobs in two private firms through the provision of authorisations
and incentives. Furthermore, they declare to sustain the re-employment of
former Falck workers in the local waste incinerator which should be enlarged
in the near future. The project for the creation of a SMEs centre will start in
one year, since a number of administrative steps have to be taken. The access to
the economic incentives set aside for this project will be reserved to companies
which will hire former Falck workers, for at least 10% of the total workforce.
Other initiatives include the realisation of training programmes, still to be
defined, and the provision of economic incentives for individual resignation
(equivalent to 12 months of salary).
The parties acknowledge that in a separate agreement, the State Railways
agreed to employ 100 workers and that private companies have submitted
requests for hiring about 150 workers.
An important element of this agreement is the explicit reference to the
“programmazione negoziata”. In fact, in a specific chapter the regional and
town authorities declare that they will define within six months a “programme
agreement” for coordinating all interventions in the Sesto San Giovanni area.
Besides, they express their support for the definition of a territorial pact.
Finally, they commit themselves to back the attribution to the Sesto San
Giovanni area of European and national funds available for the restructuring of
the steel industry.
The most innovative part of the agreement, however, is covered by a
supplementary arrangement which defines the creation of the so-called “Falck
Observatory”, that is an office for the training and outplacement of redundant
workers. An interesting feature of this office, which is located in the Falck
Sesto San Giovanni premises, is its joint character. Three trade union
representatives from the confederal metalworkers’ unions (Fim-Cisl, Fiom-Cgil
and Uilm-Uil) will join in the observatory. Besides, the local Employment
Agency will participate as well, with a supporting role.
43
Other forms of participation involve the creation of a joint body for
supervising the training initiatives, an institutional role of trade union
representatives vis-à-vis the company management for the implementation of
the reorganisation plan, the confirmation of a tripartite approach for identifying
the socio-economic objectives of the restructuring process and the definition of
a protocol for regulating the relationships between local authorities, the Falck
group, the social partners and the local Development Agency.
9.4 Results and comments
The reorganisation process and divestment of the steel factories of the Falck
group represent a very significant instance of the transformation of traditional
core manufacturing activities. The restructuring of steel production could
benefit of substantial help provided both by European-level funding and
domestic authorities. The experience of the Falck group, and in particular of the
Sesto San Giovanni plants, is usually considered as highly successful both by
industrial relations actors and practitioners, since the divestment of the steel
factories had, in practice, no negative employment impact. This was made
possible by using a combination of all available instruments for managing
industrial restructuring processes and employment reductions. For this reason
as well, the Falck group case appears significant.
However, if we take into consideration the single instruments or procedures,
the evaluation cannot be fully satisfactory for all of them. First of all, the most
substantial contribution to the non-traumatic reduction in employment was
granted by the related utilisation of the traditional (“passive” and “socially
expensive”) tools of the Wages guarantee fund and early retirements.
Secondly, another important contribution to the reduction of the
employment impact of the restructuring programme came from the sale of two
plants which originally employed some 1,700 people (in 1991, at the very
beginning of the reorganisation effort).
Thirdly, the concertation of re-industrialisation initiatives which involved
the company, the unions and local authorities produced an important
commitment of all actors in solving occupational problems. This lead to the
conclusion of joint agreements, the creation of new economic activities by the
Falck group (namely the environmental initiatives), helped to speed up all
administrative steps for the re-utilisation of the divested areas, and indirectly
supported the collective outplacement of 175 workers (100 people in the State
Railways and another 75 in one of the local waste treatment plants). The direct
employment impact of these pro-active initiatives, however, has been so far
limited, since only less than 100 new jobs have been created. In fact, the most
relevant employment creation effect is expected when the SMEs centre will be
in full operation, which means not before the end of 2000. At that time, a
clearer assessment of the overall results of social concertation and
“programmazione negoziata” will be possible.
Finally, if we consider the contribution in helping former Falck workers to
find a new occupation, the results of the “Falck Observatory” have been even
more positive than expected. Since its establishment, the observatory initiatives
44
have lead to the outplacement of 638 people, that is more than 80% of all
individual resignation. At present, all 162 remaining former Falck workers are
covered by the observatory: out of them, 78 are to be considered redundant
workers, while 27 will be re-employed in the Falck group activities, 17 are on a
stage in companies that might hire them, 14 are submitting individual
resignation and 26 will be taken to retirement by the mobility procedure. Of
course, such a success must be considered in the light of a local labour market
which provides significant alternative employment opportunities. Furthermore,
these results are also strongly favoured by the relevant economic incentives
granted to companies hiring workers covered by the mobility procedure and by
the additional support provided by the activities of the Observatory (vocational
training, stages, etc.). Probably, if the local labour market conditions would
have been less favourable, the importance of local concertation and reindustrialisation initiatives could have been of greater relevance for the former
Falck workers as well.
10. Galbani
Galbani is a leading Italian firm in the food sector, namely for dairy and
charcuterie products, and part of the Danone group. In 1997, before the
restructuring plan started, it employed about 5,200 people. It had six
manufacturing plants (one for charcuterie and five for dairy products) and a
relevant sales network. Some 2,400 workers were employed in the
manufacturing plants, about 2,500 in the sales network and the remaining 300
in the central offices.
In the spring of 1997, company and trade unions representatives met at the
Ministry of Industry, Commerce and Crafts in order to discuss the competitive
situation of Galbani. The company maintained that the difficulties it was facing
and the negative future prospects would press for a delocalisation of
productions in foreign countries. Such difficulties were mainly linked to: high
variable costs, particularly for purchasing the input milk; increasing overhead
costs; declining competitiveness vis-à-vis foreign competitors; decreasing
profitability. The Ministry of Industry shared Galbani’s concerns, but it firmly
insisted for an alternative solution to delocalisation that would assure the
correction of economic unbalances, through the decrease of production costs
and the achievement of the needed efficiency and competitiveness.
On 12 May 1997 Galbani presented to the Ministry of Industry and the trade
unions its reorganisation and development plan for meeting the objective of
keeping and strengthening the company activities in Italy. The programme was
discussed in a second meeting on 19 May and the trade unions agreed on the
general guidelines of the reorganisation and development plan. The main points
of the plan were concentration of production with the closure of two sites, new
investments, and the implementation of a “Social Plan” in order to manage in a
non-traumatic way the impact on employment. Following several meetings in
June and July, the parties finally reached the agreement of 3 July 1997.
45
10.1
The agreement on the reorganisation plan, 3 July 1997
The agreement covers a reorganisation plan that, through investments of
more than 180 million Euro, should strengthen the production activities carried
out in Italy. The restructuring process will involve the two operational areas of
production and distribution and sales.
As far as the production sites are concerned, a total amount of almost 120
million Euro of planned investments will support the rationalisation of the
manufacturing system, namely of the dairy manufacturing units. Dairy
production will be concentrated in three sites out of the five which were in
operation at that time. The employment impact of such a reorganisation process
will entail 600 redundancies.
The logistic, distribution and sales areas will be thoroughly reorganised as
well. Investments will total more than 60 million Euro. All local warehouses
will be closed down and specific sales field units will be set up. All product
stocks will be concentrated in a single “stock base” and the management of this
central warehouse, as well as all the “shipment processing” and the deliveries
to customers and commercial field units will be performed by external
specialised companies. These changes will make 600 workers redundant.
In accordance with the social policies that characterise the group, with the
agreement signed among the parties on 19 May 1997 and with the group-level
agreements reached between the Danone group and the international sectoral
trade union Uita (and in particular with the joint statement of 27 May 1997
issued by the Information and consultation committee of the Danone group), a
number of measures have been defined for reducing the impact on the 1,200
workers involved.
First of all, 800 workers will progressively enter the mobility procedure as
the reorganisation plan enters the different implementation phases. This process
will start on 1 July 1999 and will be completed by 31 December 1999. The
workers involved will be selected primarily from among those eligible for
retirement in the period covered by the mobility procedure and those whose job
position will be made obsolete by the reorganisation process.
The second “traditional” tool implemented to support the restructuring of
both the manufacturing and logistic areas is the Special Wages Guarantee Fund
(Cassa Integrazione Guadagni Straordinaria, Cigs) which will cover
progressively 600 people. This type of income support scheme will be used in
order to favour either the redeployment of workers inside the company or their
outplacement, also through specific measures devised to assist the workers in
their job search activities.
10.2 The “Social Plan” and the Operative Centre for Redeployment and
Outplacement (Cor)
The most innovative and characteristic feature of the agreement is the
specification of a “Social Plan” with the explicit objective to reduce to zero the
number of “traumatic” dismissals. The company commits itself to favour
alternatively:
46
a) the internal redeployment through territorial mobility, combined, if
necessary, with training for professional re-qualification;
b) the external outplacement either to other companies belonging to the group
or to external firms, especially suppliers and subcontractors.
In order to support this effort, the role of the existing office responsible to
manage the internal labour market will be reaffirmed and strengthened. It will
collect and circulate all information about employment opportunities within the
company and the other subsidiaries of the Danone group; manage the economic
incentives granted by the “Social Plan” (see below); and promote and
coordinate vocational training initiatives. Furthermore, a new specific office
will be created to carry out all activities specifically connected to the
reorganisation programme. It is the Operative Centre for Redeployment and
Outplacement (Centro Operativo per il Ricollocamento, Cor). A Cor will be set
up in each of the two plants scheduled for closure and two “mobile” Cor will
operate in the logistic area. Each Cor will be responsible for:

individual interviews for defining the professional prospects for each
worker;

the systematic collection of job opportunities within the company, in the
other subsidiaries of the Danone group and in external firms;

the realisation of training on labour market and on job search and interview
techniques;

the definition of individual or collective training projects in order to support
directly the outplacement, taking into consideration the characteristics of the
local labour market and of the workers involved;

assistance and support in the development and assessment of individual
projects for workers who would like to start new and independent activities,
including the identification of authorities and institutional bodies who might
help the worker in his/her project.

The organisation of the interviews with companies which have vacancies,
granting assistance to the workers.

Assistance in the decision concerning the acceptance of job offers.
The worker will benefit of time off regularly paid when he/she has to call on
external companies for interviews for job vacancies. He/she will receive refund
of travel expenses as well. When the worker succeeds in finding a new job,
he/she may benefit, if necessary upon request and/or agreement with the new
prospective employer, of:


specific vocational training for the new future position;
a trial period in the new company and job position as “commanded and
detached worker”. Thanks to this arrangement, the worker will remain a
47
Galbani’s employee and, in case of a negative conclusion of the trial period,
he/she will re-enter under the Cor coverage;

an integration of wage, if the new salary is below the former one. For the
first year, a 100% integration up to the previous wage level will be granted
by public funding through Inps (the national social security), as for a law of
1991. For the two following years, such 100% integration will be assured by
Galbani.
The workers involved in the Cor activities have, on their part, to abide by
the following rules:
a) attend vocational training and participate in all initiatives organised by the
Cor;
b) provide a written motivation for each job offer refusal;
c) decide within seven days in case they receive a job offer.
Any worker will lose the right to benefit from Cor assistance and services if
he/she will refuse a single job offer or redeployment inside the company or
other subsidiaries of the Danone group, if this offer respects the conditions set
out in the agreement about territorial mobility. The same applies to workers
who would reject two job proposals in external firms, provided that these
proposals concern a job location within the geographical limits defined in the
agreement (50 Km or a 60 minute journey) and a position equivalent to the one
he/she held in Galbani.
For workers redeployed within the company or the Danone group a number
of further incentives are envisaged: among the others, assistance for finding a
flat to rent, refund of removal expenses and economic help for renting or
buying a house. In case of collective commuting to other production sites, the
company will provide assistance and economic support for arranging regular
transfer service. Besides, when a worker is eligible for transfer within the group
and another member of his/her family is working for the company or in another
subsidiary of the Danone group, Galbani will make any effort to allow the
redeployment of both in the same workplace.
Other economic incentives are envisaged for workers who start independent
activities, including the establishment of a cooperative among former
employees, and for individual resignations. The former case includes the
provision of specific vocational training, the possibility of receiving all in once
the overall mobility income support the worker is entitled to, as for law 223 of
1991, and a further economic help granted by Galbani which is equivalent to
eight months of pay. In case of individual resignation, the employee would
receive a flat rate payment of about 13,000 Euro.
10.3
Re-industrialisation, fixed-term contracts and training
Galbani also commits itself to look pro-actively for re-industrialisation
opportunities for the two sites scheduled for closure. If new economic activities
48
will be installed on the divested sites, the company will favour the
outplacement of redundant workers in these companies.
In order to allow a smoother functioning of the reorganisation programme,
the parties have agreed a broader use of fixed-term contracts for covering all
positions which will be temporary vacant during the different implementation
phases as a consequence of the redeployment or outplacement of redundant
workers. These fixed-term contracts for “easing the reorganisation process”
cannot exceed 35% of total labour force in the relevant workplace and are
added to all the other types introduced by law or bargaining at any levels (this
threshold has been raised to 65% in October 1998 for one of the sites to be
closed down, while similar bargaining was underway in the other one, as the
redeployment and outplacement of redundant workers progressed).
At the same time, the parties agreed that during the implementation of the
reorganisation plan, it will be possible to use to a great extent labour flexibility
(overtime work, temporary agency work, outsourcing, contracting-out, etc.) for
both helping the redeployment and outplacement of redundant workers and
allowing a stabilisation of employment levels at the end of restructuring.
Finally, Galbani confirms its commitment to widespread vocational training,
not only linked to re-qualification and transfers due to the reorganisation
process. In the next three years investment in training will be doubled. Also the
special attention devoted to young people, through the use of stages,
apprenticeships, fixed-term contracts and work-training contracts, is
reaffirmed.
10.4
The agreement on salespersons
Another important chapter of the agreement, which is actually an annex to
the main agreement, covers specifically the sales organisation and namely some
1,500 salesmen in charge of small-size shops. This part could be regarded as a
more “positive sum game” than the previous one. In this case, the quid pro quo
could be identified with more flexibility (that is competitiveness), both
functional and of wage levels, in exchange of the permanence of a sales
network based on employees, instead of shifting to self-employed workers, as it
is often the case for sales networks in the food and consumer goods sector.
In fact, the agreement states that “in a market environment which is more
and more difficult and competitive, which requires growing space for
autonomy, flexibility and incentives at all levels, both in daily tasks and in
decision making”, the parties have agreed to start an experimental experience
to favour the strengthening of the salespersons’ commitment to commercial
targets. The success of such an initiative, together with the completion of
company projects on logistics, represents “the alternative to different solutions
which would entail the outsourcing of the work relationship”.
The points of the agreement on sales activity are the following:
1. wage levels will be linked to a greater extent to performance; some
elements of the present earnings will be made partially more flexible as
well. Targets will be assigned to salespersons on an individual and/or
49
collective basis and will be of quantitative and/or qualitative nature. The
final proportion of the fixed wage level and the variable pay will be
respectively of about 70%/30%.
2. in order to develop the professional skills of salespersons and widen the
number of tasks they perform, the company will implement specific
training initiatives which should represent a real “Galbani Sales School”. In
particular, it is envisaged that these changes will lead to job enrichment for
about 150 salespersons. The new position will entail an important activity
of customer development and support, administrative tasks, assistance,
training and guidance of other salespersons. For attaining the necessary
skills, a three-year training “path” is being devised. Each worker entering
this professional development plan will receive some economic incentives.
The working time of these workers will be made more flexible and, in
particular, the day off will not be Sunday, as usual.
A final point of the agreement assures the protection of trade union
representation when the reorganisation of distribution and logistics will lead to
local units of less than 16 employee (the legal limit in Italy for the
establishment of trade union representative body). In that case, a single
representative body will be set up for more than one unit.
10.5
The protocol on industrial relations
In accordance with the general orientation of industrial relations in the
Danone group, the parties agreed to set up a Joint Committee for studying the
agreements that Danone signed with the international sectoral trade union Uita.
This joint committee should verify the possibility of the Galbani’s industrial
relations system to converge towards the model already at work in Danone and
present a proposal within the end of 1997, namely for supporting participatory
industrial relations and setting up a company Consultation Committee11.
Besides, the parties acknowledge that the agreement of 3 July 1997 is a
coherent and complete application of the joint declaration of the Information
and Consultation Committee of the Danone group issued on 27 May 1997 on
the effects on employment of company reorganisations.
11
As a consequence of this provision, the complementary company-level agreement of 25
June 1998 introduced two annual information and consultation sessions between a select
committee of the Coordination committee of the plant-level trade union representative bodies
and the company top management. In these meetings, which are covered by confidentiality, the
parties should discuss industrial strategies, trends in productivity and competitiveness,
investments, and employment impacts of technological innovations, restructuring processes,
new production initiatives and outsourcing. Partly owning to the reorganisation underway, these
“participatory” sessions have not taken place yet. Trade unions are confident to have the first
meeting within summer 1999.
50
10.6
The joint assessment of the implementation of the agreement
In the framework of the joint procedures for assessment and verification of
the implementation of the 3 July 1997 agreement, the company and trade union
representatives have met on different occasions to interpret and better specify
the contents of the agreement itself. In December 1998, a thorough review of
the state of implementation has been carried out, with the following main
results:
1. the planned investments for transferring the production lines to the new
locations are progressing as scheduled;
2. an agreement for the re-industrialisation of one of the two sites to be closed
down has been concluded. Galbani participates in the new company, which
operates in the agro-industrial sector, and a further investment of more than
20 million Euro was needed for acquiring this stake and buying new
necessary equipment for the other plants. The investor will start the new
activity before the complete closure of the Galbani plant. At the beginning
(July 1999), 30-35 workers will be employed by the new company, while at
full operation (expected by January 2001) employment creation will reach
50-55 jobs. Besides, a further 20 jobs will be created in ancillary activities
and all of them will be reserved primarily for former Galbani’s workers.
3. The new central warehouse will be ready by June 1999 and will employ not
less than 90 people.
4. At the beginning of December 1998, 524 workers have been redeployed or
outplaced. In particular:
a)
174 have entered a “path” which will take them to retirement (33%).
b) 88 resulted from ordinary turnover (17%).
c)
155 workers have been transferred within the group (30%).
d) 8 people started new independent activities (2%).
e)
64 benefited of incentives for individual dismissals and other
individual solutions (12%).
f)
17 are attending a trial period in external companies (3%).
g) 18 people were outplaced to external companies (3%).
In the agreement, the parties express a positive general evaluation of the
degree of implementation of the reorganisation plan and include some further
specifications for resolving specific problems and supporting the full
achievement of the so-called “zero option” of no traumatic dismissals.
51
10.7
Commentary
In the case of the Galbani’s agreements it is possible to identify two main
trade-offs which concern respectively the manufacturing plants and the
distribution network, on one side, and the sales organisation, on the other.
For dairy production and distribution, the alternative to the reorganisation
plan would be delocalisation. Therefore, a net reduction in domestic
employment would occur. As far the salesmen are concerned, it is a “make or
buy” decision which is at stake. With no intervention, the company would
consider to shift to self-employed salespersons. Then, the impact on
employment would mostly be of a qualitative character.
The strategies by which these two distinct situations are confronted differ as
well. In the first case, the means which is used to avoid delocalisation is
basically cost reduction through rationalisation (concentration of production,
centralisation and outsourcing of stock management, investments and reduction
in employment). In the second one, of greatest importance is the increase in
flexibility of the work organisation and particularly of the pay system.
A very important and innovative part of the agreement concerns the “Social
Plan” devised to reduce the negative impact on employment of the restructuring
process. The company’s commitment to limit the loss of jobs is remarkable and
is linked to the Danone group’s human resource and social policies. The most
innovative measures are those which involve the pro-active support of
outplacement and redeployment and are mainly provided by the creation of the
Operative Centre for Redeployment and Outplacement (Cor). They include the
provision of training, job search assistance, and economic incentives for
redundant workers and partly for external companies which undertake to hire
former Galbani workers. Of particular significance among pro-active measures
are then the support granted for the creation of independent economic activities
and the effort at “re-industrialising” the abandoned sites. The former may be
regarded as genuine “employment creation” initiatives, while the latter
witnesses the acceptance of a responsibility which goes beyond employees and
extends to local communities. In general, the “Social Plan” may represent
another example of the importance that a high trust and high commitment work
environment might have for the competitive strategies of companies. An
interesting feature is that, in the Galbani’s case, it seems to depend on a
particular company’s (or group’s) attitude which is still mostly unilateral and
not highly institutionalised (at least in Italy): a marked difference in
comparison with the Electrolux-Zanussi’s experience.
11. Infostrada
Infostrada is an Italian company in the fixed-network telephony which
belongs to a joint venture between the Italian Olivetti group and the German
Mannesmann group. In February 1998, the Ministry of Communications
granted to Infostrada a licence for building up a telecommunication network for
voice-telephony services. During 1998, Infostrada developed the range of
services it offers, moving progressively from services for corporate customers
52
only, to an integrated offer of data-voice services for both companies and
private customers. The launch of the telephony service for individual private
customers took place in September 1998. Infostrada was the first one to
compete with Telecom Italia, the state-owned company which had the
monopoly of Italian telephony, on long-distance calls for individual private
customers. As far as local calls are concerned, Telecom still holds a monopoly
position.
Following all these developments, Infostrada’s business volume has grown
significantly during 1998 and particularly in the last part of it, after the launch
of the individual private customer offer. At the end of the year, Infostrada
employed some 2,400 people, with an increase of about 1,850 workers over the
previous year. The great majority of the new jobs (about 1,400) was created in
the call centres covered by the agreements described below.
11.1
The 20 May 1998 agreement
In consideration of the remarkable developments in the service range which
were under way, in May 1998 an agreement was reached at Infostrada for the
creation of 600 fixed-term jobs for the Customer-care centre. Such agreement
provided for the start of an experimental phase, which would continue until the
last quarter of 1999. Such experimentation would help assess the operation of
the Customer-care centre and identify the main variables to be taken into
consideration for planning the organisation of the service. This step was
considered important, given the novelty of the presence of a long-distance call
private provider and the expected uneven distribution of workloads during the
day.
The May 1998 agreement establishes that during the period covered by the
experimentation, the company will have the right to hire a maximum of 600
people under either fixed-term part-time contracts or work-training contracts
for its two Customer-care centres located in Ivrea and Milan. The majority of
these new jobs (400) will be created in Ivrea, while the remaining 200 in Milan.
Infostrada hired the first 120 workers on fixed-term contracts, but the
company committed itself to propose an 18-month work-training contract at the
end of the fixed-term employment. Besides, Infostrada states in the agreement
that it envisages transforming these work relations into indefinite duration
employment. Of the remaining 480 people, 50% will be hired on fixed-term
part-time contracts, while the rest will be covered by work-training contracts. It
may be worth mentioning that work-training contracts can involve only people
with a maximum age of 32. Therefore, it is possible to say that the mix of
fixed-term and work-training contracts may allow some sort of balance
between employment creation for young people and for older people. The latter
would be of particular importance in the area of Ivrea, since it has been hit by a
significant economic crisis and rising unemployment. Besides, the
reorganisation and restructuring processes that caused thousands of
redundancies in the Ivrea area included the Olivetti group as well. For this
reason, the agreement was particularly welcome by trade unions, which
53
regarded it as a significant change of direction of the group collective
bargaining towards employment creation again.
Another important point of the deal is that Infostrada stipulates that it
expects to convert at least 60% of fixed-term and work-training contracts into
indefinite time work contracts, also in consideration of the significant
investment in training that it will provide to new employees. This clause,
however, will be subject to a verification of actual business volume to be
carried out independently by the company.
At the end of the experimental phase, in the two centres of Ivrea and Milan
it is expected that 350 full-time equivalents will be employed, with either fulltime contracts or part-time contracts on a 20-25 hours per week basis. It will be
possible to hire either on horizontal part-time, or on vertical part-time, that is
with employees working only on either certain day of the week, or weeks or
months during the year. These latter part-time arrangements should help cope
with peak periods and their extension will probably depend on the observed
variation in incoming call flow.
The agreement envisages a specific training period to be attended by all new
recruits. Since training will take place at the Milan offices, the company
undertakes to arrange for collective transport facilities in those occasions.
11.2
The 21 September agreements
On 21 September Infostrada and the trade unions signed other two
agreements to better specify the contents of the previous agreement and to
increase the total amount of new jobs to be created by the company’s call
centres. As already mentioned, in fact, the launch of the individual private
customer service took place in September 1998. Therefore, it was important to
strengthen the Customer-care centre staff in order to be able to cope with the
expected boost in enquiries and applications for the new service.
The parties confirmed the experimental phase of the Customer-care call
centres, but increased the total number of new hirings to 1,300, with 800 people
to be employed in Ivrea and 500 in Milan. As before, the employment relations
would involve either fixed-term part-time contracts or work-training contracts.
The expected full-time equivalents to be employed at the end of the
experimental phase increased accordingly to 750, covering full-time contracts
and either horizontal or vertical part-time (20-25 hours per week).
At the same time and in order to deal with the increasing workloads linked
to the commercial launch of the new service, the company stipulated to take on
110 people (70 in Milan and 40 in Ivrea) on temporary agency work contracts
for a two-month duration.
The second agreement signed on 21 September 1998 covers the organisation
and operational arrangements of the two Customer-care centres. It should be
considered as an essential part of the agreement on employment creation since
it provides the operational flexibility which is deemed necessary for an efficient
Customer-care service.
First of all, in consideration that the licence Infostrada obtained from the
Ministry of Communication for setting up of a telecommunication network for
54
voice-telephony services implies the status of public service operator, the
agreement states that the Customer-care activity is exempt from regulations on
the prohibition of Sunday work. For the same reason, the parties acknowledge
that such activities are covered by law 146/1990 on the guarantee of minimum
essential public services in case of strike. Some restrictions are introduced for
the right to attend assemblies: in order to always assure the provision of
satisfactory service levels, the participation of the Customer-care workers will
be organised in different turns.
Secondly, in order to guarantee a better balance between male and female
workers and to follow the spirit of the law 125 of 1991 on equal opportunities,
the company and the trade unions agreed to remove contractually the
prohibition of nightwork for women (this prohibition has been later abrogated
by a general law in February 1999, leaving only some limits for pregnant
women and for mothers and single parents).
Thirdly, some important elements of working time flexibility were defined.
The explicit objective of all interventions on working time is to guarantee the
service levels connected to the public operator status for the whole activity
period, that is from 8 am to 11 pm for seven days a week, during the
experimental period, and 24 hours a day for seven days per week when the
service will be in full operation. Part-time employees will work on three daily
shifts of five hours each. The agreement provides for a two-hour leeway for
flexibility in daily working time: that is the company will have the possibility
to vary the starting time of each shift by one hour, either anticipating or
postponing it. Besides, also the variation of the individual weekly schedule will
be possible, provided that the company informs the worker at least a week in
advance. This would be an exception to the general rule which requires parttimers to be assigned to fixed working time schedules in terms of both hours
and days of work.
Owning to the importance of the working time issue for the smooth
operation of the Customer-care service, the company and the trade unions agree
to set up a joint committee on the working time system and structure, whose
findings will be subject by a joint evaluation within June 1999.
A final important chapter of the agreement covers the definition of
economic incentives for the Customer-care centre workers. The experimental
phase will be devoted to devise an incentive scheme based on a ‘management
by objective’ structure, since the quality of the Customer-care service is
considered essential for acquiring advantages over competitors. Therefore, the
parties will assess the possibility of identifying the parameters to assess the
quantity and quality of work performance and of the service’s efficiency and
effectiveness. Until the end of the experimentation, the amount of such
economic incentive will be of some 230 Euro, which will be paid each quarter
according to the degree of accomplishment of the targets previously
communicated to the workers. The bonus will be paid to fixed-term and parttime workers proportionally to their period or time of work.
55
11.3
Further developments
In January 1999 two agreements almost identical to those of 21 September
1998 were signed for a third call centre, which is to be set up in the area of
Pozzuoli, in southern Italy, in the outskirts of Naples. This is particularly
interesting for the argument of the present Report, since the whole Campania
region is characterised by a particularly high unemployment rate (24.7% in
January 1999; Istat 1999). In the agreement, it was agreed to start an
experimentation phase, to be completed within the first half of 2000, during
which Infostrada will have the right to hire a maximum of 1,000 people for its
new Customer-care call centre. The terms of this agreement are slightly
different from those of the previous ones: fixed-term employment will amount
to 70% of all new jobs (rather than around 50%) and the company envisages
converting 50% of fixed-term and work-training contracts into employment of
indefinite duration (instead of 60%), for a total full-time equivalents of 625
units. As in the previous case, such conversion will depend on actual business
volume.
It is worth mentioning that, in the South Italy, employment creation
initiatives receive significant support in terms of economic and social
contribution incentives. Besides, with reference to the particular employment
contracts covered by the agreements, the social contribution reductions which
are granted to companies for work-training contracts are higher than in the
North of the country and, as for law 196/97 (see the General Overview), if
work-training contracts are converted in indefinite duration employment, such
reductions are extended for other 12 months (see General Overview).
11.4
Commentary
The Infostrada’s agreements are markedly different from the previous ones.
Firstly, they concern actual employment creation, instead of addressing
basically employment protection. Secondly, they cover a rapidly growing
service sector: telecommunications, rather than more or less mature
manufacturing sectors. For this reason as well, the employment creation effects
have been particularly significant.
Here the quid pro quo is between new jobs and a high work flexibility,
which is achieved through particular employment relationships (fixed-term
employment and work-training contracts) and working time flexibility. The
latter is assured by a widespread use of part-time, which concerns the vast
majority of new jobs, and shiftwork. The company seems to consider work
flexibility highly important for acquiring a competitive advantage in the
Customer-care service over prospective competitors, since it allows a better
and more efficient work organisation for coping with the uneven distribution of
workloads. Then, the relative precariousness of the new jobs may be connected
to the novelty of the service provided, which requires an attentive evaluation of
actual business volumes and staff requirement. On the other hand, the trade
unions’ concessions in the short-run are at least partially counterbalanced by
the company commitment to cover, in the medium term (2 years on average)
56
and under assessment of actual business volumes, a relevant quota of new
employment (about 50%) by work contracts of indefinite duration.
The results in terms of new jobs may be regarded as highly positive and are
considered as satisfactory by both Infostrada and trade unions. At present, some
1,500 new jobs have been created and the total employment creation impact
should attain almost 2,500 units by the end of 1999. Then, it is very important
that a significant share of new employment has been created in the South of the
country, in an area characterised by very high unemployment. This experience
shows the potential of ICT-based activities in reaching easily the most
disadvantaged areas in terms of economic development, with relevant positive
employment impacts and relatively low investments. In this case, collective
bargaining seemingly succeeded in taking advantage of such a potential.
12. Final remarks
The four cases includes in this Report cannot be considered as “typical” or
even “representative” of company-level bargaining over employment creation
and protection and competitiveness. In some respects, they are rather “atypical”
and innovative agreements. For these reasons, they may help identify some
continuing features of Italian company-level bargaining and propose some
tentative evaluation of new trends.
At company-level defensive approaches are probably still prevalent.
Company restructuring programmes are often the reason which leads collective
bargaining to cover employment issues.
However, both the causes of restructuring and the instruments which are
used to manage redundancies show some signs of change. The pressure of
international competition is increasing and the threat of delocalisation becomes
more frequent. The latter is particularly pressing in the case of transnational
groups (like Electrolux-Zanussi and Danone-Galbani). On the other hand,
together with the traditional forms of redundancy management (Wages
guarantee fund, the mobility procedure, and early retirements), some more
“pro-active” initiatives aimed at limiting the social impact of reorganisation
programmes are developing. This is the case of the efforts which Galbani and
Falck made for supporting the redeployment or outplacement of redundant
workers and the re-industrialisation of their former industrial sites. Such
initiatives may take place in the framework of a tripartite concerted effort,
supported by public funds (the case of Falck and possibly the experiences
which develop through the “programmazione negoziata”), or at the employer’s
initiative (Galbani), which may be committed to foster a high trust and
“participatory” work environment.
Real proactive approaches are less abundant. Company-level agreements on
employment creation may occur in the case of new and developing activities
(Infostrada) and/or when local conditions provide important incentives for this
kind of collective bargaining, as when territorial pacts or area contracts are
present. In both cases, the creation of new jobs is usually connected to the
definition of specific work flexibility (otherwise the collective agreement
57
would not be necessary). Such flexibility may include employment relations
(typically fixed-term employment, work-training contracts and now also
temporary agency work), wage levels and working time (often with the
annualisation of working time; sometimes through working time reductions in
exchange of new shift schedules which allow a higher equipment utilisation
rate; rarely using part-time).
For the above mentioned reasons it is possible to say that the most common
quid pro quo in the area of competitiveness is between employment creationprotection and lower labour costs (or more productivity) through flexibility
(contractual, functional, in pay systems, working time, etc.). In this sense, the
stress of company-level bargaining has increasingly moved to the flexibility
issue, at the employers’ initiative. In some cases, the emphasis on flexibility is
coupled with an attention to “trust” and “participation” (Electrolux-Zanussi and
Galbani), but flexibility remains a key feature.
Trade unions appear to be prepared to face this “flexibility challenge”, but
the outcomes of collective bargaining depend heavily on the economic, labour
market and industrial relations contexts in which negotiations take place. The
employer’s attitude, the sectoral industrial relations tradition, the local
unemployment rate, the presence of a local “social dialogue” are only few of
the variables which can influence the actual content of company-level
bargaining over employment. In the best conditions, work flexibility and
workers’ participation may develop together; in the worst ones, the only,
though very valuable, results of “concession bargaining” may be in terms of job
creation or protection.
58
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