COLLECTIVE BARGAINING IN ITALY:BETWEEN PATH DEPENDENCY AND

CHANGES

September 26, 2013 Bruxelles

Dr. Salvo Leonardi

Timeline and changes 2009-20132009 January 22; Separate framework

agreement on the new industrial relations system (without the CGIL)

New system to calculate the inflation rate; longer duration of the 1st level collective agreements; opening clauses and decentralisation; restrictions to strike

2010-2011 Separate agreements at the FIAT plants; national agreement for the whole group, out of the metal workers national agreement

Harder working conditions; restriction to the right to strike; NewCo; exit form the national industry-wide agreement

2011 June 28; New unitary Framework agreement on the industrial relations system

Two-tier system; primacy of the national one; eligibility criteria to be admitted at the National CB; opening clauses; restrictions to strike

2011 August 3; Letter of the ECB to the Italian Government

Request to decentralise collective bargaining; freezing civil servant pay; pension and labour market reform

2011 September; Law n. 148 on de-centalization of collective bargaining

(art. 8) Company agreements can derogate unfavourably even from laws

2011 Reform of the age for pension Prolonged to 66-67 in the next ten yars

2012 Springtime: reform bill of labour market and redundancy rules

Marginalization of the right to be reinstated if unfairly fired; new crisis shock absorbers.

2013 May 31; New unitary Framework

agreement on the industrial relations; Certification of trade unions representativeness Vs. binding national agreements

The Italian system of industrial relationsHigh level of voluntarism and ‘abstention of law’ (public sector excluded);

• trade unions pluralism, without laws to rule it (representation; collective bargaining; participation; strikes)

• minimum wage is not fixed by law, but through collective bargaining, as "fair pay”, based on the principles of "sufficiency" and "proportionality" for a dignified quality of life of the workers and his/her family (art. 36 Cost.)

Industrial relations regulated by tripartite or inter-confederate agreements.

Comparatively medium-high level of trade union density

High level of collective bargaining coverage

Trade Union Density and Collective Bargaining coverage

The “qualitative” problems of the Italian trade unions

1) The gap between the trade union power and recognition (membership, CB coverage) and the general quality of social outcomes (wages, inequalities, precariousness, welfare state).

2) The problems among unions about models of unionism and collective bargaining (de-centralization; democracy, servicing, crisis management): the season of the separate agreements

3) The crisis of traditional voluntarism in the field of industrial relations is provoking juridical uncertainty and disputes

4) The recent, unprecedented, marginalization of social concertation before the new State interventionism on the main social issues, collective bargaining included

The Italian ways to The Italian ways to collective bargaining decentralisationcollective bargaining decentralisation

1.1. Organized decentralization: the tripartite framework Organized decentralization: the tripartite framework agreement of 23/7/1993agreement of 23/7/1993

2.2. Weakly organized: the (separate) framework Weakly organized: the (separate) framework agreement of 22/1/2009agreement of 22/1/2009

3.3. Totally disorganized: the Fiat and the art. 8 (law no. Totally disorganized: the Fiat and the art. 8 (law no. 148/2011) models148/2011) models

4.4. Coordinate de-centralization: the bipartite framework Coordinate de-centralization: the bipartite framework agreements (agreements (ConfindustriaConfindustria) of 28/6/2011 and ) of 28/6/2011 and 31/5/201331/5/2013

1) Organized de-centralization: 1) Organized de-centralization: the framework agreement of July 1993)the framework agreement of July 1993)

Employer/management

Territorial employers association

CGIL, CISL, UIL, (3) + others

Confindustria, Confapi, Confartigianato, Legacoop

(>10)

Sectoral Federations(12-18)

Employers Federations

(> 200)

1° levelIndustry-

wide collective

agreements(456)

2° Level

• enterprise/firm/group •(medium-large)

• territorial(small units)

Workplace Reps/

TerritorialFederations

Government

Interconfederate agreements

2) Weakly organized de-centralisation:the framework agreement of 22/1/2009

Reform of the collective bargaining machinery: experimental for four years

Signatory parties: CGIL didn’t agree and didn’t sign it

1) First level (National)

Duration: 3 years, incorporating either the normative and economic parts, differently scheduled in the past

Salary and cost of living: new method to calculate increases- a new indicator “Harmonised Consumer Prices Index” (HCPI), calculated by a neutral institutional agency, replaces the old “Planned Inflation Rate”, fixed through tripartite concertation - the restore of the purchasing power will be not programmatically full, since the new indicator excludes the imported energy costs

2) Second level (company)To enhance a decentralisation through:a) opening clauses from sectoral agreements at company level, b) incentivation through fiscal and social contributions reductions linked to productivity c) minimum wage guarantees for the small firms, short of decentralised agreements

The European interventionism influence on collective bargaining and wage setting system

The « secret » letter of the ECB of the 3 August 2011 asked the Italian Government:

« to reform the system of wage bargaining at the enterprise level agreements (..) with adapting the wages and working conditions to the specific needs of companies (..) and make these agreements more relevant than other levels of negotiation ».

Freezing civil servant pay

+

A « careful review of the rules governing the hiring and firing of employees ».

Further action in the pension system.

3a) Article 8 of the Law no. 148/2011:the “proximity agreements”

• Aims: why to derogate? to enhance occupational levels, to manage occupational and economic crisis, to support quality of employment contracts, the workers’ participation, combating undeclared work, the level of salaries, new investments, the setting up of new activities

• Matters: what derogate? “Specific agreements” can derogate (in worst) on a long list of matters: new technologies, work organization, classification systems, short term contracts, working time, employment contracts, consequences of dismissal (on ALL…. except union liberties and pension)

• Scope: how much derogate? Not only from national sectoral agreements

and but also from the law, with the only limit of being not in contrast with International or Constitutional fundamental rights/principles

• Procedures: Who and how can derogate? Local or company collective “proximity” agreements are binding, if approved by a majority of the representative unions in the enterprise.

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3b) Totally disorganized decentralizationThe FIAT “American” model

1. Exit from the employers’ association and its system of agreements

2. A “national first level agreement” (for automotive), de-linked from the metal sectoral agreement

3. Workplace representation and rights: for signatory union organizations only

4.4. All workers of Pomigliano’s plant All workers of Pomigliano’s plant dismissed and hired again from a dismissed and hired again from a formally “New Company” (No formally “New Company” (No CGIL-FIOM members hired)CGIL-FIOM members hired)

5. Strike restrictions, with sanctions for unions and individual workers too (until dismissal) in case of violation

• Unions refusing to sign firm-level Unions refusing to sign firm-level agreements are excluded by any agreements are excluded by any representation (closed shop) within all representation (closed shop) within all the FIAT workplaces the FIAT workplaces

• 11.000 FIOM-CGIL members expulsed 11.000 FIOM-CGIL members expulsed by any right to representation. A wide by any right to representation. A wide campaign and legal disputescampaign and legal disputes

• Constitutional Court Constitutional Court stigmatized that it’sstigmatized that it’s not the unions’ real representativeness not the unions’ real representativeness (vote and/or members) to legitimate the (vote and/or members) to legitimate the signature of a binding agreement but – signature of a binding agreement but – on the reverse – to sign whatever on the reverse – to sign whatever agreement to legitimate a trade union to agreement to legitimate a trade union to be recognized and admitted.be recognized and admitted.

• A new law is needed to avoid such a A new law is needed to avoid such a situations. Also FIAT claims for it nowsituations. Also FIAT claims for it now

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4) The coordinated de-centralisation:the framework agreements of 28/6/2011 and

31/5/2013• Certification of unions representativeness in order to take part at the national

bargaining rounds: threshold at 5% between votes and members

• Two-tier bargaining system and primacy of the industry-wide CA

• Possibility to negotiate “modifying agreements” at company level, which are now erga omnes binding, in respect of the national CA limits, contents and procedures

• No derogation of law admitted

• A national CA is binding when signed by unions which together represent 50+1% of the workers (majority principle), as a weighted average between votes and members, collected and certified by independent agencies

• Workers have to be timely consulted and their votes have to be taken in consideration

• Clauses on strike restrictions: mandatory for signatories unions only

What future for the Italian and European What future for the Italian and European collective bargaining and wage policy?collective bargaining and wage policy?

• Multi-employer agreements: a fundamental tool against social dumpingMulti-employer agreements: a fundamental tool against social dumping

• Making collective bargaining more inclusive (atypical workers; very small enterprises) through binding extention extention (alternative to the minimum wage setting)

• Definition of a platform of non-derogable rights (employment relations, health and Definition of a platform of non-derogable rights (employment relations, health and safety, minimum wage, union rights) at firm-level collective agreementsafety, minimum wage, union rights) at firm-level collective agreement

• Pure voluntarism doesn’t guarantee certainess/enforcability/reliblility. Legal rules on Pure voluntarism doesn’t guarantee certainess/enforcability/reliblility. Legal rules on employees representation and collective bargaining in the full respect of the social employees representation and collective bargaining in the full respect of the social partners options (see the Protocol of July ‘1993), are neededpartners options (see the Protocol of July ‘1993), are needed

• More democracy for union revitalization, against membership decline

• To change the European economic policies and narratives, with alternative approaches also on wage policy and collective bargaining

• To strenghten the attempts towards a European coordination of collective bargaining, in order to prevent downward wage competition (priorities, criteria, syncronisation)