Italian reforms cut collective agreement terms

On 22 January the Italian government agreed a new national collective bargaining agreement with employer and union representatives, replacing the tripartite arrangements that had been in place since 1993.

The new arrangement was set up in response to calls for greater flexibility in light of the current economic crisis.

It will cover all businesses, except for the banking sector, which has refused to sign it.

One of the major Italian trade unions (CGIL) has also refused to sign the agreement, citing concerns that it will undermine workers’ rights.

The new arrangements will change the duration of collective agreements. Currently the non-pay provisions of agreements are valid for four years and the pay provisions are valid for three years.

The new deal means both pay and non-pay provisions will be valid for three years.

There will also be new arrangements governing how wage levels are set. Currently, industry-wide agreements set out basic minimum rates and provide for general pay inc­reases, while company-level agreements set additional increases linked to company performance.

The government wants a greater role for company-level agreements. It has, therefore, been agreed that wage increases will be mainly linked to increases in labour productivity as per any rules set out in a company-level agreement.

The index used for measuring inflation and thus calculating wage increases will also change. In future the parties will use the Eurostat index instead of the national consumer prices index.

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