Collective Bargaining in Italy

February 27, 2017

 Constitutional Model
 Art. 39 of The Constitution sets forth three principles:
 1) Trade Union freedom and thus pluralism
 2) Public registration of Trade Unions, with a democratic
statute
 3) Attribution of the “bargaining capacity” (that is the
capacity to stipulate national collective agreements
applicable to all workers belonging to the categories to
which the contracts referred) to bodies formed according to
respective numbers of members
 But why Italian System is a “legal system without laws”?

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 “Material” v.s. formal
Constitution

 When the Constitution came into force, whereas the

principle of trade union freedom (guaranteed by Art. 39,
clause 1) immediately became a cornerstone of the
union system, the remaining part of the provisions set
forth in clauses 2, 3 and 4 was not implemented.

 This part, in fact, required a series od specifications by

State legislation, which never arrived.

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 The features of the Italian
Trade Union system

The Italian Trade Union system can be characterized in the following

ways:

 informal (or anomic, as a result of the non-actualization of the

constitutional model provided for in Articles 39 and 40);

 under voluntary basis (the Trade Unions are only regulated by

Articles 36-38 of the Civil Code);

 material (i.e. factual): the principles of our Trade Union system are
not written into the Law, but have assumed form in the practice of
the "living law" (diritto vivente), over time shaped by Constitutional
Court decisions and the Trade Unions actions.

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 The principles of the Italian trade Union
system (private sector)

Such principles are:

 mutual recognition of actors on the basis of effective

representation (representativeness);

 equality of the Parties signing the contract;

 the prevalence of the collective dimension as opposed to the

individual, once the individual has consented (by an act of
accession, either explicitly or implicitly) to become part of the
system.

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 Notion of trade unions
“representativeness”
 It refers to Trade Unions which have a <consistent>
(that you can’t ignore) representation of the workers
belonging to a certain categorie

 This notion is used (by legislator) to operate a selection

among the various unions

 It’s used in expressions like: “most representative

association”; or “comparatively most representative
trade union association”

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 How it can be measured?
 Although this notion is widely used by legislators, no attempt
has been made to specify its meaning.

 It has thus been the task of scholars and practical

jurisprudence to work out a series of indexes to measure the
representativeness of a union, such as:

 1) the number of members

 2) the presence in various production sectors and
geographical areas

 3) the continuity and systematic nature of their bargaining

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 Public sector employment
 Only in the public sector employment the legislators have
intervened to regulate the criteria governing legitimisation of trade
unions entitled to take part in the stipulation of collective
agreements.

 So, to take part in a national collective bargaining relating to a

“department” (comparto) Unions have to have a minimum of 5%
consensus. This percentage is obtained by calculating the
weighted average between the number of members in the
“comparto” de quo and the votes won in union election (the
election through which are constituted the working councils)

 The same criteria have now been “transferred” from public to

private sector through the Inter-confederate Agreement (january
2014)

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 Majority Principle

 In addition, to be entitled to sign national collective

agreements, the various unions backing the agreement
have to represent at laest 51% of workers, calculated
as the average between the electoral and associative
data for that department or contractual area, or at least
60% of the electoral data in the same context.

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 The problem of the scope of
collective agreements
1) Under the corporative system colective agreements were
essentially considered to be equivalent to a law, even
though they were formally (as they are today) subordinate
to the law from a hierarchical viewpoint
2) Today, in our informal system, the collective agreements of
“private-law” only has a legally binding effect between the
stipulating parties and their members. The collective
agreement therefore does not (or shoud not) apply to third
parties who are extraneous to the contract eithe because
they are not members of a union or employers’ association,
or because they are members of organisations or
association other than those which stipulated the contract.

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 The “social” solution
 But for reasons of social equity courts and scholars in Italy
have been induced to “BEND” the logic of civil law by means
of interpretations which have in fact led to a more or less
general personal scope of collective bargaining.
 Various arguments have been put forward in support of this
extension
 The “master argument” (principle of sufficiency of salaries)
is based on Art. 36 of the Constitution; it allows the salary
provisions of national collective agreements to be extended
to any workers who asked for them, irrispective of wheter
their employer belongs to the association which signed the
relative contract

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 Levels of Collective
Bargaining
 Collective bargaining in Italy takes place at different
levels:

 1) Inter-confederate level
 2) National (or industry or national- wide sector) level
 3) Company level (or, only as an alternative to this
level, Territorial level)

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 Inter-confederate collective
bargaining
It takes place between confederations of employers and
workers (in the public sector is called a “framework
agreement”)

It’s used when the social partners consider it opportune or

necessary to have uniform regulation for several categories of
workers

It often takes the form of concertative tripartite (as opposed to

direct bilateral) negotiation between the social partners.

Inter-confederate bargaining plays an important role as regards

important issues affecting workers in general.

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 National Sector-Wide
Collective Bargaining
It’s still the prevalent model of national collective bargaining
(public department collective agreement in public sector) =
CCNL
In Italy, as in much of Europe, the CCNL was the cornerstone
of industrial relations in the Fordist organisation of labour
The National Sector Contracts regulate the minimum wage and
conditions applicabile to employment relationships; they are
intended to ensure that pay keeps pace with prices and should
set increases that take account of inflation (economic part).
In addition, National Sector Contracts deal with a range of
others issues such as working time, work organisation,
disciplinary dispositions, etc. (normative part).

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 Company Level CB
 Initially not even formally recognised, the company-
level collective bargaining spread in the early ‘60s

 It was a sort of “submerged” phenomenon brought into

being by the so called “internal committees” and mainly
dealt with salary issues.

 This kind of bargaining, was first constrained by rigid

objective and subjective rules laid down by the national
agreements; today it has become a serious competitor
to national bargaining

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 Company Level CB
 Pay negotiations at company level should provide a
mechanism for the employees to take account of
particular company level developments, such as
improved productivity on the one hand or the risk of job
losses on the other.
 In addition company level negotiations also deal with
changes introduced by the company such as new
working methods.
 It is also possible for this lower level of bargaining to be
conducted for several employers on a district or
regional basis (f.e. in tourism, crafts and agriculture)

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 “Sacrificial”
Company Level CB
 Today company-level agreements are used with
increasing frequency to regulate situation not covered
by the traditional incremental-acquisitive function of
national agreements.
 A so called “sacrificial” company-level agreement is
usually stipulated in periods of company crisis to allow
broader margins of flexibility in the management of
human resources
 The problem of personal scope of such agreements is
exactly the opposite of what normally happens with
national agreement

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In this case, legal action is taken by individuals or groups
of workers who, by virtue of the common entitlement rule,
either because they are not union members or because
the belong to unions that have not signed the contract,
reject the clause in the collective agreement.

Here again various arguments have been put forward.

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 Relationships between
the CB levels
 Traditionally, the national sector contract determines
the modes, the sphere of action of decentralised
bargaining e the issues with which company-level
agreements are allowed to deal.

 This is called the “principle of specialisation and non-

overlapping between issues previously defined at a
higher level” (non repeatability clause)

 Decentralisation is thus accepted, but within the strict

limits imposed by the national contract

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 … in Germany
 In Germany there is a similar system.
 Collective bargaining primarily takes place at industry
(national) level rather than at the workplace. National
level of CB has traditionally been seen as one of the
strengths of the German system. It has the potential to
keep conflicts on pay and conditions at industry level,
between the unions and the employers’ associations,
while at workplace level, individual employers and
workplace employee representatives – the works
councils (see section on workplace representation) –
can develop more cooperative relations.

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 Back to Italy
 But this bargaining framework has come under
pressure in recent years. The employers’ association,
Confindustria, has called for bargaining to be more
decentralised, giving greater importance to company
level of CB.

 Confindustria (followed by CISL, UIL, but not by CGIL)

argues that it is important to make the system more
flexible so that it can respond better to the needs of the
company.

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 The disagreement of CGIL
 CGIL takes a different view, arguing that the main
problems are the long delays in reaching agreements –
these are often signed months after the old agreement
has run out, and the fact that inflation is often
underestimated.

 These issues were discussed by the three

confederations in an attempt to find a common position,
but without success, at least until the stipulation of the
Inter-Confederate Agreement of June 28, 2011.

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 Coverage of CB
 There are no official statistics on the coverage of
collective bargaining, but Eurofound estimated it at
80% in 2014.

 Bargaining at company level, to improve or

complement the national agreement, is much less
common. Recent estimates suggest that only 30/40%
of the workforce is covered by company level
agreements.

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 Collective Agreement Parts
 Traditionally, collective agreements are divided in two
parts:

 1) Normative part, in which you can distinguish also

the economic part (which contains the rules on
minimum wages)

 2) Mandatory part (which contains the rules that are

binding upon the stipulating parties and not related to
the employment relationships)

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 Subjects of negotiations
 Collective agreements in Italy cover not just pay but a
wide range of working conditions (primarily with the
protection ot real living standard against inflation) as
well as issues such as hours, holidays, training, health
and safety, the use of temporary workers.

 Italy does not have a system for setting a legal

national minimum wage, although, as already noted,
the courts will often refer to the minimum wage levels
set in the industry agreement in individual cases on pay
level.

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 The "shock" of Pomigliano and the short season of
separate collective bargaining (January 2009 - June 2011)

 January 2009: Separate Confederal agreement with the

Government (signed only by the CISL and UIL but not by CGIL)

 new model of relationship between the national and the company contract.

 April 2009: two Confederal agreements were concluded to actuate

the agreement of January 2009 above.

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 The "shock" of Pomigliano and the short season of
separate collective bargaining (January 2009 - June 2011)

 June 15, 2010: the stipulation of the Pomigliano

Agreement between Fiat and its social partners (with
the disagreement of Fiom).

 October 2010: introduction of art. 4-bis with the intent to

consent the modification of the national collective
contract at the company level.

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 The "shock" of Pomigliano and the short season of
separate collective bargaining (January 2009 - June 2011)

 December 2012, 23: the Mirafiori agreement was

stipulated in Turin (without Fiom) with similar content to
the one of Pomigliano.

 this contract was also approved by 54 % in a

workers’ referendum.

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 Interconfederal Agreement of June 28
2011 and art. 8, D.L. n. 138/2011

 June 2011, 28: Confindustria, the CGIL, CISL and UIL,

finally united, stipulated a new ICF agreement that
attempts to solve the problem of separate company
agreements by introducing for the first time the majority
principle

 effectiveness for all employees in the company.

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 Interconfederal Agreement of June 28
2011 and art. 8, D.L. n. 138/2011

 From the June agreement, the entitlement to participate

at the negotiating table is recognized only to the Trade
Unions that exceed a minimum threshold of
representativeness (5%) calculated on an average of
associative and elective "criterium".

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 Interconfederal Agreement of June 28
2011 and art. 8, D.L. n. 138/2011

 On 5 August 2011, the ECB sent a letter to the Italian government

in order to promote a reform of the system of the collective wage
bargaining.

 On the basis of this letter, the Minister Sacconi launched, with Law
n. 148/2011, the famous art. 8 which introduced the "agreements
of proximity".

 On September 21, 2011, the social parties distanced themselves

from art. 8.

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 Reaction of Fiat

 Fiat removed itself from the scope of national and

interconfederal agreements stipulated by Confindustria
and made of the new collective discipline the only
discipline for all Fiat Group.

 The so called “collective agreement of the first level” of

December 13, 2011 was signed by Fim and Uilm but
not by Fiom.

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 Fiom and art. 19, L. n. 300/1970

 As a result of Fiat's exit from Confindustria and the

refusal of Fiom to sign the “first level collective
contract”, Fiom remained excluded from the access to
Union rights and practice at company level according
with art. 19, letter b) of Law no. 300/1970 (workers’
Statute).

 Fiom claimed before the Italian Constitutional Court the

legitimacy of art. 19, letter b), above.

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 Decision no. 231/2013 of the
Constitutional Court

 The Constitutional Court ruling of July 23, 2013, n. 231

declared for the first time the illegality of article 19,
letter b), workers’ Statute: "in so far as it did not provide
that the Trade Unions entitled to represent the
employees in the company are not only the Trade
Unions signatories to collective contracts applied in the
unit of production but also those which has participated
in the negotiations relating to the same contracts".

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 Decision no. 231/2013 of the
Constitutional Court
 Given to the absence of a Law regulating unions
representation in any way other than a capacity to
conclude collective agreements, the new criteria
creates some uncertainty.

 The Consolidated Text on representation of January 10,

2014 offers a first proposal of interpretation: the
"participants in the negotiations" should be considered
those Unions which
 have reached the 5% of representation;
 have contributed to the definition of the platform;
 were part of the delegation treating the last renewal of the
collective agreement.
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 ICF Agreement of
January 10, 2014
 This agreement, at last signed by all three confederations, states
that company bargaining covers “matters delegated to it and the
way forseen by” the industry agreement that relates to the
company.

 In other words, company agreements can mofify industry

agreements, but only if the industry-level agreements itself permits
this.

 Where the industry-level agreement does not contain provisions

allowing such modifications, they can still be agreed at company
level in the issues of work performance, working hours and work
organisation, in order to deal with “crisis situation or where there is
significant investment benefitting the company’s economic or
employment development”

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 The perspectives

 There is a great uncertainty: the protagonists of the

system (legislators, social partners, Court rulings and
constitutional decisions) have so far proved to be not at
all coordinated with regards to the possible solutions.

 It is not at all a reach to say that while the

Constitutional Court has resolved the case of Fiat, it
has certainly not resolved the problem of union
representation in the companies and in Italy.

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