Making industrial relations work for the working poor
MAKING INDUSTRIAL RELATIONS WORK FOR DECENT WORK BRIEFING ON THE SITUATION IN ITALY
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“In its 2010 report on poverty in Italy, the Central Institute of Statistics, ISTAT, sets the poverty threshold at ¤ 595.48 a month for a one person household. By the same token, a poverty threshold of € 992.46 is set for a two-person household, € 1,319.97 for a household with three members, € 1,617.71 for a household with four members, ¤ 1,885.67 for five members, € 2,143.71 for six members, € 2,381.90 for seven members or more1. (Central Institute of Statistics – ISTAT)”
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Introduction Poverty and precarious employment Poverty has recently risen sharply in Italy. People who have a disposable income below 60 per cent of the national median income are considered “relatively poor”: in its 2010 report on poverty in Italy, the Central Institute of Statistics, ISTAT, sets the poverty threshold at € 595.48 a month for a one person household. By the same token, a poverty threshold of € 992.46 is set for a two-person household, € 1,319.97 for a household with three members, € 1,617.71 for a household with four members, € 1,885.67 for five members, € 2,143.71 for six members, € 2,381.90 for seven members or more1. (Central Institute of Statistics – ISTAT). According to the 11th Annual Report on Poverty and Marginalisation drafted by the Italian Caritas and Fondazione Zancan, 2,734,000 families were living under the poverty threshold in 2011 (that is to say, 8,272,000 people, equivalent to 13.8 per cent of the entire population). The data referring both to families and people slightly increased in comparison to the previous year2. The first reason for the increase in poverty is certainly the reduction in the number of people employed: according to the latest annual statistics published by ISTAT3, on 31 December 2010, the number of people employed was about 23 million, 153,000 less in comparison with the previous year. Furthermore, ISTAT indicates that in 2010 there was a fall of 285,000 full-time workers holding a permanent contract – standard employment contract – the highest reductions being registered in industry (-190,000 workers) and construction (-14,000 units); this decrease was only partly compensated by the modest increase in the service sector (+35,000 units), which, as will be described in this pilot study, is one of the sectors with the highest concentration of low income workers, for whom decent working conditions are not easily accessed.
1 Istat, “The Poverty in Italy 2010”, Rome, July 2011, in: www.istat.it
The second reason has to do with the progressively precarious nature of the employment relationship, which is represented by two different phenomena: the reduction in the number of hired employees, whose contracts are part of national collective agreements, and the increase in so-called “independent” workers.
2 Caritas Italiana Fondazione Zancan: “Poveri di diritti / Poor in rights”, Rome, October 2011
According to ISTAT data for August 2011, «the national collective agreements now in force concern 66.9 per cent of the entire hired workforce»4.
3 Istat, “Statistic Yearbook 2011”, Rome, December 2011, in: www.istat.it
Against this economic background, this examination of the impact of low-paid work in Italy –which often results in non-decent working conditions– uses the definition of “Working Poor” validated at European level5: «a person who, in the year of reference, has mainly worked –that is to say, works for at least six months a year– as a hired wageearner or as an independent self-employed worker, and lives within a household whose total income falls below 60 per cent of the equivalent median national income»;
4 Istat, “Collective Agreements and Contractual Salaries”, Rome, August 2011, in: www.istat.it 5 Definition taken from Michèle Lelièvre Eric Marlier - Patrick Pétour, Un nouvel indicateur européen: les travailleurs pauvres, July 2004. The same definition is adopted by the European Commission (Committee for the Social Protection) 6 A Social Cooperative is a non-profit commercial enterprise featuring a mutual aim (that is to say, it has been founded with an aim to provide their members with goods, services or employment opportunities, at more profitable conditions compared to the free market) carrying out its activities in the social sector (e.g.: social and health care, education, employment and job placement opportunities of disadvantaged people) 7 Italian Constitution, art. 36, in: http://www.senato.it/documenti/repository /istituzione/costituzione_inglese.pdf
In Italy, workers falling within the above European definition, belong to many sectors: construction, health and care, services (e.g.: cleaning), trade (e.g.: especially large retail businesses), social cooperative enterprises6 and, particularly for highly qualified jobs, professional service firms. All such people are in fact denied the right established in article 36 of the Italian Constitution, which provides that «Workers have the right to a remuneration commensurate to the quantity and quality of their work and in any case such as to ensure them and their families a free and dignified existence»7.
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Overview The rise of the working poor How was it possible for the “working poor” to become an established phenomenon in this country? Why could it not have been prevented through labour laws and industrial relations? The legal text of reference is still legislative decree 276/20038 which, based on a parliamentary enabling act9, reformed the existing employment relations by introducing new forms, on the assumption that in difficult economic times, it is easier to create new jobs using more flexible employment contracts, which are cheaper for the employers. Article 4 of this legislative decree introduces a «register of private employment agencies», private companies which, following the completion of accreditation procedures, are then authorised to carry out employment related activities based on outsourcing, headhunting, recruitment, and outplacement. Outsourced labour was also introduced in Italy: in practice the workers become hired employees of the private employment agency itself, which then sends them to work (the so-called “mission”) in a contracted company. The law provides that companies can use outsourced labour for their regular activity, though only «in presence of technical, production or organisational reasons, established by the law, or by national or territorial collective agreements signed by the most representative associations of employers and employees»10. Outsourced contracts are fixed-term contracts, featuring the same duration of the “mission” assigned to the worker, even though the law allows for permanent work contracts for some specific jobs11 (see moreover, in chapter 5, some good practices which have arisen from such regulation). The entry onto the labour market of this new category employer has had a noticeable effects on industrial relations: employees working in the same company, performing the same tasks, and covered by the same collective national work contract, are still substantially different from each other, since they refer to different employers, and have different prospects in terms of job stability. Another innovation is the greater flexibility introduced in managing the working hours of part-time employees: the employers have fewer restraints when it comes to asking the workers to work overtime, and can include flexibility clauses in the contracts. Such a legal framework puts the workers in a weaker position, forcing them to accept nondecent working conditions. The legislative decree also regulates independent work or self-employed jobs, with the aim of stimulating an easier transition towards more stable and protected employment: but on the contrary, the net resulting outcome is that this flexible situation has becoming long lasting, and causes a permanent precarious state. This situation is confirmed by the trends highlighted in the introduction of this pilot study, with reference to statistical information published by INPS and ISTAT, which both refer to a continuous decrease in the number of permanent hired workers, and to a steady increase in independent workers. As far as independent workers are concerned, they represent a group including various kinds of contractual agreements. ISTAT reports there were 5,700,000 independent workers in 2010, while according to the records of the INPS (Italian National Institute for Social Security) the total number of registered workers has diminished (-82,650), even though, despite the decrease in the number of hired workers (-97,215), there has been a strong increase in the number of independent workers (+24,613)12. The increase in independent activities should not be regarded as evidence of a vital and strong economy based on self-entrepreneurial trends, but rather shows that workers are getting poorer,
8 Legislative decree 10 September 2003, n. 276 "Implementation of delegated regulations on topics related to employment and labour market”, with reference to the law of 14 February 2003, n. 30 9 Reference to law of 14 February 200, n. 30, and legislative decree 10 September 2003, n. 276 10 Art. 20, paragraph 4, legislative decree n. 276/2003 11 Consulting and assistance in the sectors of information technology, cleaning, safety, concierge, passenger transportation, logistics of goods and machinery, libraries, museums, parks, archives, warehouses, management, marketing, call centers, setting new companies in the Objective 1 areas, construction within factories, any other case established by national or territorial collective agreements signed by the most representative associations of employers and employees 12 Inps, “Annual Report 2010”, Rome, May 2011, in: www.inps.it
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and that they are forced to “formally become independent workers”, although in practice they are subject to a hired employment-like contract, at minor cost to the employer. Occasional work contracts are those agreements where the worker has no social protection at all, and the employer does not pay any welfare contribution, but only collects a 20 per cent tax payment deducting it from the gross wage agreed. With a view to stimulating an easier transition towards more stable and protected employment –an event which rarely occurs– regulations have been introduced to limit the maximum gross amount paid in a year to 6,250 euros, for a maximum of 30 working days. In reality, when the occasional work contract allowance has been used up, and if there are favourable employment prospects and a good relationship, the employer will then most likely employ the worker using a so-called project contract, which, as we will see, is neither more stable, nor more protected. When the conditions for continuing the employment relationship do not exist –it could simply be because the employer wants to reduce labour costs, in view of guaranteeing higher profits and/or competitiveness for the company– the only choice left available for the worker is to formally become an independent worker, like a freelance professional, well knowing in advance that he/she will never be “free”, because they will have to abide by the organisational restraints imposed by the “employer”. Workloads and tasks entrusted to these workers are very similar to those assigned to the permanent hired workers: they can not perform their skills with more than one employer, but they don’t enjoy the same rights guaranteed by a permanent work contract in terms of wages, working conditions and social protection. In such cases building up good relationships is left to the individuals involved: it will rarely happen that such an independent worker –a non-hired worker who is in practice subject to a hired employment-like contract masked as a formally independent job¬– will ask the trade union to start a labour dispute aimed at recognising the real nature of his/her work relationship, knowing that, in case he/she would succeed, their working conditions would most probably become unbearable afterwards. The case of project contracts provides even clearer evidence of how the concept of flexibility, previously introduced with the aim of facilitating entry into the labour market, does not match with stable employment. Flexible work becomes synonymous with precarious work, undermining the positive actions which could be taken in the framework of industrial relations and social dialogue. By activating a project contract, the employer is not bound to apply the hourly wage rates established by the national collective agreements, thus saving money on social and tax charges, which are lower than the parallel charges for regular work contracts, while the worker formally keeps their status as independent worker. The project contract: • must include detailed information on the project entrusted to the worker; • cannot be activated for tasks which are considered structural to the organisation or connected to the regular operation of the company, but must expressly indicate an activity complete with start and end details; • cannot establish for the worker either a pre-arranged timetable, or a total hourly workload, or an obligation to coordinate with the company organisation, unless this occurs within the limits of the project activity; • can be extended only once. Such limitations have been introduced with an aim to make project contracts real opportunities to enter the labour market: after the only extension allowed, they should ideally be transformed into standard permanent contracts. What actually happens is that project workers are often employed in structural tasks related to regular company operations, thus being assigned a defined number of hours
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and a fixed timetable, and by doing so, going against the contract provisions; moreover, the contract is extended more than the one time admitted, by changing the project entrusted to the worker, often only in theory and on paper.
“Illegal work represents a form of “poor work”, totally hidden from any official evidence, thus eluding all tax and social charges due. The impact of illegal work cannot be detected from official statistics, but for 2010, ISTAT estimates it accounts for 17.3 per cent over the total workforce, a figure mostly involving migrant citizens without residence permits.”
From an industrial relations point view, the fact that the regulations established in project contracts are not correctly implemented greatly weakens the position of these workers (the same features already discussed above for freelance professionals also apply to project workers), who are often little aware of their rights, and of the option to report to the trade unions in order to find proper support. Legislative decree 276/2003 does not mention fixed-term contracts, regulated by different laws13, which have also been recently changed, with a view to making these contracts more flexible and more readily available for the employers. But in this case too, the changes introduced, far from making entry to the labour market easier, have ultimately led to greater precariousness for the workers, who don’t have any prospect of stable employment, as they are forced to move from one contract to another, and have become weaker players on the industrial relations scene. Last but not least, illegal work represents a form of “poor work”, totally hidden from any official evidence, thus eluding all tax and social charges due. The impact of illegal work cannot be detected from official statistics, but for 2010, ISTAT estimates it accounts for 17.3 per cent over the total workforce, a figure mostly involving migrant citizens without residence permits.
The contractual framework Decent work (not) for all In order to better appreciate the impact of the working poor phenomenon, together with its main features, it is necessary to go beyond the distinction between protected hired employees and non-protected non-hired workers. Nowadays the Italian workforce can be broken down into Standard Hired Workers, Non-Standard Hired Workers, and NonHired Workers. Standard Hired Workers are those employees who have a full-time and permanent work contract; they are likely to become poor workers if they carry out low-qualified tasks, or if they are not properly positioned. The table below summarises maximum and minimum gross wage levels set by the national reference collective contracts: Sector
Retail Trade L.R.S.14 Services / Cleaning Construction Social Cooperation Caregivers (not living together)
Minimum Gross Values
Maximum Gross Values
A €/hour
A.1 €/month per full-time contract
B €/hour
B.1 €/month per full-time contract
7.40 6.58 8.60 6.75 4.22
1,184.00 1,052.80 1,376.00 1,080.00 675.50
12.60 9.70 10.80 9.95 7.40
2,016.00 1,552.00 1,728.00 1,592.00 1,184.00
Source: National Collective Work Contracts
The figures in the above table refer to gross amounts (i.e. inclusive of income taxes: 23 per cent for incomes up to 15.000 euro, and 27 per cent for incomes between 15.000 and 28.000 euro), and must be compared with the figures reported in the table published on page 1 (ISTAT Relative Poverty Thresholds Standards) which refer instead to the disposable income.
13 Legislative decree 6 September 2001, n. 368 "Implementation of Directive 1999/70/EC concerning the framework agreement on fixed-term work established by UNICE, by CEEP and by CES" – Law 24 December 2007 n. 247 “Regulations for the implementation of the protocol of 23 July 2007 on social security, work and competitiveness aimed at fostering equity – Law 6 August 2008, n. 133 "Conversion in law, with amendments, of the law-decree 25 June 2008, n. 112, including urgent provisions for the economic development, simplification, competitiveness, stabilization of public finance and taxation adjustment" 14 Large Retail Surfaces
“In some cases workers are deliberately employed on a lower contract level: often these are foreign workers (who often do not even have enough information to realise it), and those workers employed in companies mostly dealing with public or private customers on tender contract systems. When a tender contract expires, and the new contract is granted to another company, the workers are absorbed by the new company: they risk being paid less however due to shorter working hours (this happens because in order to win the tender contract, companies will try to reduce the number of hours of work), or because the length-of-service benefit paid to the worker by the previous company, will not be continued by the new one.”
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It then becomes clear that the gap reported by ISTAT goes from a minimum of 595.48 euros for single member households, to a maximum of 2,381.90 euros for families with seven or more members. By comparing such data, it then becomes fairly clear that the workers earning the monthly gross amounts reported on the table above in the left column A.1 are poor (a caregiver with a monthly gross income of 675.50 euro who does not live in a single member household), or at high poverty risk (for instance, a worker earning a gross amount of 1,300 euros per month who is the only income provider in a 3-4 member family). The workers earning the monthly gross amounts reported in the table above in column B.1 enjoy a higher level of protection, though they mainly correspond to the higher levels and to full-time contracts, which are currently decreasing within the overall workforce, and are less and less used for young people: workers who can reach the levels of income referred to in the table above are therefore relatively few (less than one in three). The situation of the construction workers is peculiar: on the one hand their national collective agreement sets standard wages which would place them above the ISTAT threshold, even when they are hired in the lower ranks. On the other hand, the construction sector employs many workers illegally, especially non-European irregular citizens (normally paid 3-5 euros per hour), but also craftsmen, whose formal independent status “hides” in fact an employment situation which would rather fall under a hired full-time employment contract. Furthermore, the construction sector often reports problems connected to workers’ health and safety, both for the illegal workers, who are excluded from any kind of protection, and for those who are regularly employed, but also for the independent workers. By favouring the bid that offers the lowest price, the Tender Contract Code15 drives the companies to compete by lowering costs, an attitude which often results in cuts affecting workers’ safety; and this happens in spite of a law16 which, if it were correctly applied, would provide a level of utmost workers’ protection in terms of shifts, work timetables, continuous training plans, and compulsory safety equipment and devices. The income of the workers’ of social cooperative enterprises can be even lower than the figures reported in the table above, at the beginning of the employment relationship (when they have to pay the membership fee, which can be as high as 3,000 euros), but also later. In fact, the worker, because of his membership status, is asked to recapitalise the company in case of losses, or when –and this doesn’t happen rarely in times of crisis- cooperative enterprises are paid late by their (public or private) customers. In some cases workers are deliberately employed on a lower contract level: often these are foreign workers (who often do not even have enough information to realise it), and those workers employed in companies mostly dealing with public or private customers on tender contract systems. When a tender contract expires, and the new contract is granted to another company, the workers are absorbed by the new company: they risk being paid less however due to shorter working hours (this happens because in order to win the tender contract, companies will try to reduce the number of hours of work), or because the length-of-service benefit paid to the worker by the previous company, will not be continued by the new one. The above findings prove the existence of the increasing vulnerability of workers on standard employment contracts: their working conditions are protected by the industrial relations system, but the strength of the trade unions has decreased over time.
15 Legislative decree 12 April 2006, no. 163 16 Legislative decree 9 April 2008, no. 81, modified by legislative decree 3 August 2009, no. 106
Non-Standard Hired Workers are those employees who have a part-time or a fixed-term employment contract, and outsourced workers, who are hired by private employment agencies, and then sent to work in the contracted companies; they are mostly young workers, under 35, and women, for whom there is a greater demand than men in the specific sectors where these kinds of agreements are more used.
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These contractual arrangements are widespread in the service sector, where they now involve 22 per cent of the workforce, but they account for an even higher share in the tourism and restaurant business (65 per cent), in company general support services (59.7 per cent), and in the retail trade (38 per cent). These workers fall in the low-income group because while they have the same hourly wage as full-time workers, they have lower working hours. A part-time worker hired at an average level in these sectors may achieve an income of 600-700 euro per month; thus we cannot consider these workers as being in decent work because: • often the part-time contract is not the individual worker’s choice aimed at attaining a better work-life balance, rather it’s the employer imposing it as a condition for employment; • their working hours are often less than 20 hours per week, with a schedule scattered17 throughout the week on shifts which can be very short: in sectors like the large retail trade, cleaning, and social and health care, there are workers commuting up to half a workday in order to reach their workplace and work a one-hour shift. Such situations prevent the worker from finding other jobs allowing him/her to reach higher levels of income; • part-time workers are required to be highly flexible, since they receive shift work notices 48 hours beforehand, and they might be asked to deliver their shifts in different locations –this happens often in the large retail trade which recruits their workforce through private employment agencies; • fixed-term work contract employees, whether part-time or full-time, run the risk of discontinuous work. Non-Hired Workers include occasional work consultants, freelance professionals, and project workers. They are mostly young people with a high educational level, but also foreign citizens working in the construction sector, who in practice are subject to a hired employment-like contract, masked as a formally independent job. These workers are low income employees because: • the hourly wage rate is not set by national collective agreements; • working time, which cannot be agreed on a contract basis, is then established on an informal basis according to the production and organisational needs of the employer: as a result, the actual hourly wage may sometimes be very low (7 to 8 euros/hour even for highly qualified skills); • the income finally available is further decreased, by up to 50 per cent, because the worker must take care of paying in full taxes and social charges on the amount paid by the employer (this applies to the self-employed worker with his/her own VAT number, while project workers have their income tax deducted directly by the employer). The factors preventing workers enjoying decent work include: • low pay (for highly qualified jobs, the gap between the skills involved and the wage
level is particularly high); • social protection is generally low, non-existent in the case of illness; • low pension contribution payments (workers in this group will be the future poor
pensioners); • limited bargaining margins as regards wage rates and timetables.
17 Excerpt from an interview with Anna, worker
“The Italian trade union confederations have established specific unions for these new categories of workers (FeLSA20 CISL, NIdL21 CGIL, UIL-Tem.p@22), and they have devised some good practices which take into account the changes that have occurred in the labour market, and which promote the right of both Non-Standard Hired Workers and Non-Hired Workers to access a consolidated system of industrial relations.”
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Industrial Relations The three-tier workforce model we have described above also affects the structure of industrial relations. Standard Hired Workers are still the most protected, because they can rely on a stable set of regulations, a fairly widespread trade-union awareness (though lower than in the past), and a well based and accessible industrial relations structure (though the economic crisis has weakened the margins for collective bargaining at the local company level). Non-Standard Hired Workers are less likely to benefit from this consolidated industrial relations system: for instance, given their working conditions, they are not able to fully avail themselves of the right to trade union membership, which is guaranteed by the Italian Constitution. Workers report quite often discriminatory attitudes after establishing «contacts with the trade union»18. Such stories rarely come out, but they are clearly reflected in the low trade union membership of Non-Standard Hired Workers, and in the reluctance of such workers, especially those with a fixed-term contract, to enter into a labour dispute, which is more likely to be postponed until after the work contract has expired. Non-Hired Workers do not access, as such, the industrial relations system: bargaining here takes place on an individual basis between the single worker and the employer. Non-Standard Hired Workers and Non-Hired Workers are the groups for whom industrial relations can have little or no influence when it comes to implementing decent work. Both groups currently pose a challenge to trade union organisations on cultural and organisational grounds, in reaching, organising, representing and protecting workers who are physically «scattered all around»19, and who are culturally far away from the trade union, partly because they are foreigners (above all the care givers), but also because they have little information on the role that the trade union could play in supporting their rights. In order to achieve the goals outlined above, the Italian trade union confederations have established specific unions for these new categories of workers (FeLSA20 CISL, NIdL21 CGIL, UIL-Tem.p@22), and they have devised some good practices which take into account the changes that have occurred in the labour market, and which promote the right of both Non-Standard Hired Workers and Non-Hired Workers to access a consolidated system of industrial relations. The fact that Non-Standard or Non-Hired Workers are excluded from the consolidated industrial relations system often also affects the “human resource management system” established at sectoral or company levels.
18 Excerpt from an interview with Claudio Tecchio, stakeholder 19 Excerpt from an interview with Tiziana Tripodi, stakeholder 20 FeLSA: Federazione Lavoratori Somministrati Atipici e Autonomi / Federation of Outsourced Atypical (Non-Standard Hired Workers) and Autonomous (Independent Workers) 21 NIdL: Nuove Identità di Lavoro / New Identities of Labour 22 Categoria Nazionale Lavoratori Temporanei Atipici e Autonomi / National Category Temporary Workers Atypical and Autonomous
Indeed, the Non-Standard or Non-Hired Worker is not a worker starting his/her career, but rather someone who “costs” less, has weaker ties to the company and, from an industrial relations point of view, is in the weakest position. Far from making proper use of the flexible contract options available to make it easier for new workers to enter the labour market, the trend is to use these contract schemes purely to cut costs and to protect the competitive position of the company. Alternative policies aimed at supporting these contracts with continuous training plans in order to invest in the professional development of the workforce, with their positive outcomes on company growth and, in the long run, of the whole economy, are not being pursued. These issues pose big challenges to the trade unions: the challenge is not simply how to reach these workers in order to organise, represent them and defend their rights, it must also be to promote cultural change, focused on enhancing investment in the workforce in terms of knowledge and professional growth.
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Good Practice Stability for Non-Hired Workers. In some cases this occurs thanks to a labour dispute, and can only be considered as “good” practice if it helps ensure that regulations are correctly applied. There was a successful example of this in 2011, when the workers of a large private enterprise in the logistics and transport business were able to convert over 400 project contracts into full-time permanent employment contracts. The process began in 2009, when the trade unions «had asked the company to give the workers job stability, after having assessed that the project contract used did not meet the requirements concerning tasks, pre-arranged work timetables, and lack of workers’ autonomy in the implementation of the activity». Although this was the outcome of sometimes conflicting industrial relations, it can be considered an example of “good practice” for two main reasons: first of all, because the result was reached thanks to «achieving trade union awareness amongst the workers»23, and secondly, because the application of the agreement was extended nationwide, since the company is present all over the country. In other cases, job stability has been secured thanks to non-conflictual industrial relations and to the cooperation of the private employment agencies. This happened, for instance, in two hospitals, where a total of 166 social and health care workers (38 in the Piemonte rregion and 128 in the Campania region), at the end of a fixed-term outsourcing contract, when they were hired on a permanent work contract by the private employment agencies themselves; in the Campania region, the regional government was also involved, with financial support for the private employment agencies. Both cases refer to positive practices, implementing corporate social responsibility policies. The private employment agencies agree to carry part of the risk connected to the workers’ outplacement: a limited risk when the workers’ skills are high. For this good practice to become more widespread, therefore, it is important to invest in continuous training for the workers. Consultation at the local level. This is a form of bargaining that has long been a part of social dialogue in Italy, where the trade unions play a major role in defining the cost levels of various fees and services, together with the quality standards of essential services, protecting both the citizen as the service end-user, and the employee working in the service delivery chain. The following is an example of this. Negotiations for the “Retirement Homes” project. «The project, which started in 2005 and ended in 2010, involved several institutions: the regional government of Piemonte, municipalities, a consortia of municipalities delivering social care services to the local population, social cooperative enterprises, an association grouping several volunteer organisations, and the trade unions. All organisations engaged in the debate over the regulations and the service standards to be implemented in a retirement home, looking for the proper balance between available resources and quality standards»24. Thanks to this approach, it has been possible to work out a platform for providing appropriate services. This experience as a good practice in terms of social dialogue. The trade union doesn’t simply interact with its “natural counterpart”, that is the employer, it also relates with the institutions bearing the political and financial responsibility for delivering essential services to the citizens. Owing to public expenditure cuts, in the current economic climate, the tender contract system in the service delivery chain favours the lowest bids, which are then awarded the contract. This situation leads to a high risk of lower quality, and a parallel risk of worsening working conditions for the employees involved in the delivery of such services. The participation of the trade unions at the negotiating table as concerned supporters of citizens rights, becomes all the more important in this context.
23 See http://www.cgil.bg.it/comunicati/2011/ stabilizzazione_collaboratori_isonzo.htm 24 Excerpt from an interview with Riccardo Negrino, stakeholder
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Conclusions The obstacles to effective industrial relations Through this Pilot Study we have been able to map out the “at risk categories” involved in non-decent work and in low income settings: • foreign citizens, working in caregiving occupations, or in the construction sector, often
illegally; • young workers (under 35), who cannot access standard work contracts, and who are
then forced to enter the labour market through the flexible mechanisms established by the law (non-standard contracts, or independent work contracts masking hired employment-like contracts), and who are not able to move on to more stable and better paid situations; • women, working in general business support services (cleaning) and in the social and
health care sector, with low hourly wages, limited timetables, and a high demand for flexibility on the part of the employer.
The research has also identified the critical issues which currently prevent the definition of an effective industrial relations framework, suitable for all workers: • an improper use of current legislation, particularly as regards non-standard contracts; • the tendency not to invest in the workers and in the work itself, not only in terms of
industrial relations, but also human resource management. This is the result of a cultural trend which finds its roots in the improper use of legislation, whose real goals (i.e.: to make entry into the labour market easier) are systematically disregarded, causing structural fragility and putting workers in vulnerable. • a labour market in which the differences are so great that it can be defined as a “dual”
market. On the one hand, there is a progressively diminishing share of “standard” workers who are fully protected by the national collective agreements and by a consolidated system of industrial relations. On the other hand, a fast growing group of workers who, thanks to more lenient legislation and to a substantial acceptance of such flexible tools in everyday practice, have much more limited protection, if at all, as in the case of freelance professionals, or project workers; • trade unions have difficulties in establishing contacts with the two groups of non-
standard hired workers and non-hired workers, whose members are physically more difficult to reach, to organise and to represent; • the need for the trade unions to promote a proactive process of change at the cultural
level, whereby investment policies directed at the professional growth of workers, which in turn will have a long term positive effect on companies and the economy, become a top priority. • good practices have been detected: through industrial relations the trade union can
play an active role in securing job stability for workers in precarious employment. As regards social dialogue, through their participation in local consultations the trade unions can help both citizens as service end-users, and employees working in the service delivery chain.
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Recommendations At this time of serious crisis, institutions, political forces, the social partners, and civil society at large, must work together to implement the necessary structural reforms, without undermining social stability and cohesion. In order to ensure decent work for everybody, labour market reforms will be needed to overcome the excessive use of flexible work contracts, and make standard hired work contracts more readily accessible for all, making it easier to change occupation. Continuous workers training plans should be promoted, together with a minimum income. Public and private investment flows must also be resumed in order to ensure that structural reforms can take place: the institutions, together with the social and political forces must engage in constructive debate. Against this general background, the specific recommendations are:
To the national institutions: a) Increase the use of local consultation, especially for the delivery of services for the citizens, which are jointly paid for by general taxation, with the participation of the customer (similar to the contribution paid by the patient through the “sanitary tickets� system). Consultation helps to define an appropriate balance, which must be sustainable for all partiess involved, and must guarantee decent work to a wider group of employees. b) Improve the tender contract procedures to move away from the prevailing criterion favouring the lowest bid, especially for those cases where this practice puts at risk the overall quality of the services delivered to the citizen, together with the working conditions of the employees, as often happens in the construction business, or in the social and health care sector. These issues must be dealt within the tender contract specifications, and both the organisations publishing the calls for tenders from one side, and the companies delivering the services from the other side, must abide responsibly to such specifications. c) Increase inspection checks aimed at disclosing illegal work (especially on construction sites); situations where workers are not fully granted their rights (with special reference to protection and social security issues); and cases where non-hired workers are in practice on a hired employment-like contract, though masked as an independent job (freelance professionals with one single client, project workers forced to abide by a definite workload and to a timetable). Increasing controls in the construction sector would bring illegal work to light and have undoubted advantages in terms of improving both safety and work conditions
To the employers: a) Invest in bilateral organisations: these are the places where debate and confrontation take place between the representatives of both the workers and the employers, with the overall goal of governing the labour market through activities like: the promotion of regular and quality employment; helping match demand and supply in the labour market; organising training activities; devising plans for continuous training in companies.
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About the project “Making Industrial Relations work for Decent Work” is a one-year project which looks to intensify the cooperation and mutual learning of relevant actors - employers, unions, NGOs, think tanks and workers – to identify the role as well as the tools and models needed for effective industrial relations, with the ultimate aim of combating precarious employment and realising decent working conditions and quality jobs for all. This briefing, coordinated by SOLIDAR, was produced by SOLIDAR member ISCOS in Italy. www.iscos.cisl.it All “Making Industrial Relations work for Decent Work” pilot studies are available on www.solidar.org
b) Standardise good practice regarding the transition to stable employment contracts. While it is true that in times of crisis and globalisation, flexible employment contracts may help protect a company’s competitiveness and profitability, on the other hand, choosing to invest in the workforce and their local area is an act of social responsibility, and an important part of the cultural change needed in order to overcome the current structural crisis.
To the trade unions: a) Provide more information to Non-Hired Workers and to Non-Standard Hired Workers on the protection of their rights, even if they are excluded from the current consolidated system of industrial relations. b) Increase the organisational drive already started among those sections of the trade union movement that deal with non-standard work. c) Contact the workers who do not recognise the trade unions as their representatives, devising new ways to make themselves available, and investing in new technologies (e.g.: the web and social networks).
SOLIDAR is a European network of 56 NGOs active in over 90 countries working to advance social justice in Europe and worldwide. SOLIDAR voices the concerns of its member organisations to the EU and international institutions across the policy sectors social affairs, international cooperation and lifelong learning.
Authors: Paolo Pozzo, Marina Marchisio, Sandro d' Ambrosio (ISCOS) Responsible editor: Conny Reuter Editor: Sara Hammerton Project Coordinators: Adeline Otto and Francesco Zoia Bolzonello Publication Coordinator: Abigail Goundry Printed on recycled paper ©SOLIDAR March 2012 This publication has been produced with the assistance of the European Union. The content of this publication is the sole responsibility of SOLIDAR and can in no way be taken to reflect the views of the European Union. Supported by DG Employment, Social Affairs and Inclusion.
decent work decent life