COLLECTIVE BARGAINING IN ITALY: BETWEEN PATH DEPENDENCY AND CHANGES

1. COLLECTIVE BARGAINING IN ITALY: BETWEEN PATH DEPENDENCY AND CHANGES Dr. Salvo Leonardi September 26, 2013 Bruxelles

2. Timeline and changes 2009-2013

3. The Italian system of industrial relations High 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 lifeof 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

4. Trade Union Density and Collective Bargaining coverage

5. The “qualitative” problems of the Italian trade unions • The gap between the trade union power and recognition (membership, CB coverage) and the general quality of social outcomes (wages, inequalities, precariousness, welfare state). • The problems among unions about models of unionism and collective bargaining (de-centralization; democracy, servicing, crisis management): the season of the separate agreements • The crisis of traditional voluntarism in the field of industrial relations is provoking juridical uncertainty and disputes • The recent, unprecedented, marginalization of social concertation before the new State interventionism on the main social issues, collective bargaining included

6. The Italian ways to collective bargaining decentralisation Organized decentralization: the tripartite framework agreement of 23/7/1993 Weakly organized: the (separate) framework agreement of 22/1/2009 Totally disorganized: the Fiat and the art. 8 (law no. 148/2011) models Coordinate de-centralization: the bipartite framework agreements (Confindustria) of 28/6/2011 and 31/5/2013

7. 1) Organized de-centralization: the framework agreement of July 1993) Government Interconfederate agreements Confindustria, Confapi, Confartigianato, Legacoop (>10) CGIL, CISL, UIL, (3) + others 1° level Industry-wide collective agreements (456) Sectoral Federations (12-18) Employers Federations (> 200) 2° Level • enterprise/firm/group • (medium-large) • territorial (small units) Workplace Reps/ Territorial Federations Employer/ management Territorial employers association

9. 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

10. 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.

11. 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.

12. 3b) Totally disorganized decentralizationThe FIAT “American” model • Exit from the employers’ association and its system of agreements • A “national first level agreement” (for automotive), de-linked from the metal sectoral agreement • Workplace representation and rights: for signatory union organizations only • All workers of Pomigliano’s plant dismissed and hired again from a formally “New Company” (No CGIL-FIOM members hired) • Strike restrictions, with sanctions for unions and individual workers too (until dismissal) in case of violation • Unions refusing to sign firm-level agreements are excluded by any representation (closed shop) within all the FIAT workplaces • 11.000 FIOM-CGIL members expulsed by any right to representation. A wide campaign and legal disputes • Constitutional Court stigmatized that it’s not the unions’ real representativeness (vote and/or members) to legitimate the signature of a binding agreement but – on the reverse – to sign whatever agreement to legitimate a trade union to be recognized and admitted. • A new law is needed to avoid such a situations. Also FIAT claims for it now 12

13. 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 13

14. What future for the Italian and European collective bargaining and wage policy? Multi-employer agreements: a fundamental tool against social dumping Making collective bargaining more inclusive (atypical workers; very small enterprises) through binding extention (alternative to the minimum wage setting) Definition of a platform of non-derogable rights (employment relations, health and safety, minimum wage, union rights) at firm-level collective agreement Pure voluntarism doesn’t guarantee certainess/enforcability/reliblility. Legal rules on employees representation and collective bargaining in the full respect of the social partners 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)