Union struggle and the crisis of industrial relations in Italy. (Behind the News).

On 23 March 2002 Italian trade unions organised one of the country's biggest ever protests. Around 3,000,000 people demonstrated in Rome against the government's policy of deregulation and the terrorist murder of Marco Biagi--the government labour law consultant- by the Red Brigades (Brigate Rosse). This was followed by a general strike on April. The actions together mobilised 16 million people and involved 80-90 per cent of the workforce in the major industrial sectors including metalworking, public services, banking and finance. The dispute became very sharply focused following the dramatic killing of Marco Biagi and the question of whether terrorism would re-emerge in the wake of the more general social conflict deriving from the actions of the labour movement. However, the focus of the trade union and working class action had been the struggle to dismantle the government's attempt to marginalize trade unions through the shift from 'concertation' to a much weaker form of 'social dialogue'. At the centre of the dispute was the union's capacity to intervene and protect workers' rights by refusing to allow the development of neo-liberal 'voluntaristic' deregulation of labour markets and the abandonment of key features of social protection. This mobilisation was the first major demonstration to be called by the unions for 20 years and marks a crisis point in Italian industrial relations.

This article argues that the Italian government is seeking to marginalize trade unions and exclude them from involvement in promoting economic growth and the development of consensual economic and social policy through 'social concertation'. Concertation had given the unions a strong institutional role in Italian industrial relations and the proposed 'social dialogue' would leave decisions in the Government's hands and subject to the intervention of the Italian employers' federation. This would allow the reform of the labour market and the implementation of proposals strongly damaging to workers' rights that would have been inconceivable within the concertation process. The strength of the united union opposition to the proposed 'social dialogue' cannot conceal the historical differences between the three major Italian confederations, which in 2001 re-emerged in relation to agreements in the metalworking sector. However, the process of decentralising collective bargaining, common to other neo-liberal capitali st economies, is being firmly resisted.

The provocation: the government's reform on labour market

Closer to a neo-liberal approach in economic and social policies than could be expected, at the end of 2001 the Italian centre-right government led by Silvio Berlusconi attempted to put into practice what Thatcher and Reagan had indicated more than ten years ago as the 'one best way' for reforms in work and employment. The breaking point was the Italian centre-right government's recent programme launching three important reform initiatives in the fields of labour market institutions, the pension system and taxation. In particular, the content of the White Paper on the labour market published in October 2001 on behalf of the Welfare Minister, Roberto Maroni, defined the general directions of the Italian government action on the themes of work and employment by setting out the transition from a phase of concertation to social dialogue. The abandonment of the consultation inherent in concertation meant that the crucial matters directly addressed in the White Paper were introduced by government without it having reached an agreement with the trade unions. At the centre of the conflict, was Article 18 of the Workers' Statute (Statuto dei Lavoratori), which provides for the reinstatement of workers unlawfully dismissed, which is a central element of employment rights in Italy. In effect, the proposed reforms were dismantling social protection, union rights and social guarantees for the benefits of capital.

The three major Italian trade union confederations CGIL (Confederazione Generale Italiana del Lavoro) CISL (Confederazione Itqliana Sindacati Lavoratori) and UIL (Unione Italiana Lavoratori) have been fiercely critical of the governments' initiatives ever since its first presented the White Paper at the end of 2001. In order to support trade union demands against government proposals, the three main Italian union confederations initially called a four-hour regionally co-ordinated strike to take place in January 2002. The dispute involved workers' mobilisation against the government's proposals and centred on two main areas. First, and the main area of contention, was workers' resistance to any changes in the rules on individual dismissal: second was their rejection of the government proposal to reduce social security contributions for newly-hired workers. On this basis the trade unions demanded that government withdraw all changes to Article 18 and the proposed cuts to social security contributions.

A further development was the request by CGIL, CISL and UIL to meet the Italian President of the Republic, Carlo Alzeglio Ciampi, so that they could explain the reasons for their protest and discuss the critical state of the relationship between the unions and the government. Despite the goodwill expressed by the President, who re-stated the importance of social concertation as an important factor in political stability, the government refused to compromise and declared its decision to go ahead with its broad-ranging neo-liberal reforms programme. Further protests against the Italian government's economic and. social initiatives were organised by the leaders of the three main Italian union confederations. Since then, the unions hostility has increased as a result of further government proposals both to go ahead with the reforms and to pursue its new stance in dealing with the unions.

Italian industrial relations and Italian trade unions

Italian industrial relations were traditionally characterised by a long and laborious political negotiation between employers, unions and the state in exchange for jointly agreed revisions on incomes policies, collective bargaining and labour market matters as was demonstrated during the 1970s and the 1980s. Hence, Italian union organisation was strengthened as the result of obtaining greater recognition from the employers and the state at both central and local levels. By seeking to reduce the influence of Italian trade unions in the economic and political arena, government policy clearly aimed to provoke the disruption in this tradition of concertation that has more recently accompanied the development of 'social pacts' (Regalia, and Regalia, 1998, Negrelli, 2000).

Structural reforms of the labour market play a central role in the most recent initiatives envisaged by the Berlusconi government, and were amongst the key measures included in the White Paper. These proposals would integrate the Italian government's response to the economic, social and environment issues discussed at the European Council that met at Barcelona in March 2001. Discussion took place within the framework of the Lisbon and the Stockholm strategies of 'economic modernisation' agreed by the Lisbon Council in March 2000 (EIRO, 2001a). The government's reform programme includes stepping up active labour market policies and reducing the tax burden on labour. It also covers issues such as the definition of a new system of public and private employment services; the system of employment incentives; part-time and atypical work; rules on arbitration in labour dispute and, last but not least, changes on the rules on individual dismissals without 'just case' or 'justifiable reason'. This latter relates to the Article 18 of the Workers' Statute. In particular, the government measure is to replace the right of reinstatement of unfairly dismissed workers with financial compensation, on the rather optimistic basis of fostering the creation of open-ended, regular employment. According to government proposals the experiment would last four years and cover various categories of workers. These include workers hired as part of the process that leads to the emergence of irregular work (lavoro nero); workers involved in the conversion of fixed-term jobs in o pen-ended employment and workers in small firms if, in consequence of such recruitment, the size of the firm exceeds the 15 employees threshold for application of the provisions of the Workers' Statute.

The government hoped to rely on serious breaches in the unity of the labour movement in order to push through the reforms. Indeed, union solidarity was seriously put in danger by the government's initiatives and this did potentially weaken workers protest. As Regini (1984) argues in the Italian case, the ideology of class was historically used to reinforce workers' loyalty to union policies as the guarantee of the defence of their interests. However, unity between the different Italian trade union confederations has sometimes been fragile and two important events recently threatened this solidarity: the Milan 'employment pact' supporting increased work flexibility and advanced in February 2000 and the dispute over the renewal of the pay terms of the national collective agreement for metalworking. Despite agreements being reached by Federmeccanica (the metalworking employers' federation) with two Italian union confederations (Fim-CISL and Uilm-UIL) on two occasions, in both cases Fiom-CGIL (the left-wing Itali an metalworking federation), which covers the majority of union members, refused to sign. Specifically, they did not sign the 2001 metalworking agreement and responded to it by calling unilateral strike action in July 2001 because they considered the pay increase on offer was insufficient for workers to recover the loss of purchasing power through inflation (EIRO, 2001b).

This break-up of the unity of the Italian unions has historical roots, which are embedded in a different 'political' orientation of the organisations within the three main union confederations. Specifically, CISL and UIL traditionally emphasised the relative autonomy of their sectoral organisations against the greater centralisation of CGIL, which was the only one embracing an ideology of class struggle. Fiom-CGIL's opposition to the pay deals was consistent with its opposition to the Milan employment pact. The pact intended to introduce an experiment in collective bargaining by decentralising negotiation to territorial level. The experiment aimed at fostering employment growth (particularly clandestine work) by introducing specific forms of workers' flexibility to promote the employment of certain groups of workers in particular areas. The unions opposed the government's policy of decentralising bargaining activities to the territorial level because this might have been seen as endorsing labour market fragme ntation.

There are important questions of union identity that need to be taken into consideration in order to broadly understand the differences in the Italian union's behaviour toward the agreements. As Giugni (1995) stresses, the traditional CGIL vision of trade unionism as a social movement protecting the interests of the working class contrasts with CISL and UIL visions that emphasise bargaining for the particular employment interests of their membership. Accordingly, CGIL's position can be understood in terms of both the increased demand for flexibility, which unions believe is intrinsically detrimental for workers, and the method suggested for collective bargaining, which implies the establishment of diverse systems of industrial relations defined on the basis of differences in local labour markets. The acceptance of treating workers differently on the basis of skills and the socio-economic growth of the area they work (particularly between the South and the North of Italy) undermines the principle of 'solidarit y' and fosters labour market segmentation.

Nevertheless, despite the initially diverse approaches--pragmatic CISL and UIL on the one hand and militant CGIL on the other hand--Italian confederations responded in a unified way to the measures on the labour market suggested by the Berlusconi government at the end of 2001. By strongly opposing the governments initiative, after a period of harsh discussions with the employers and the government, the unions decided to call an active social protest that ended with the general strike. The aim was to formally protest against the neo-liberal centre-right government's policies and symbolically re-establish the unity of the trade union movement. The union's critical approach to the government is a response to Confindustria's position, which they consider to have strongly influenced government's labour market policy.

Making sense of unions struggle

While writing the chapter on Italian trade unionism--as part of the broader analysis of trade union movements in three European countries--in his recent book Understanding European Trade Unionism, Richard Hyman (2002) clearly states his doubts about the possibility of Italy maintaining the traditional strategy of 'class compromise' under a government of the right. This strategy drew on the traditional 'political exchange' rationale, originally conceptualised by Pizzorno (1978) in order to describe the climate of consensus in Italian industrial relations in the late 1970s and early 1980s.

Social concertation is the terminology used in order to describe the nature of the compromise in Italian industrial relations during the 1990s. It implies government, employers' organisation and trade unions sharing responsibilities in regulating economic and social policies for the modernisation of the country. Formally launched under the 1993 July tripartite agreement, social concertation represented the method used by the centre-left government in 1992-93 (Social Pacts for Jobs) and later in 1997-98 (the so-called Christmas Pact) to achieve convergence in line with the Maastricht Treaty. In turn it represented a new element in Italian industrial relations as it moved towards what Negrelli (2000) called a more centralised and efficient system, as opposed to the intermediate category models that are exposed to either inflation or deregulation. In short, a greater institutionalisation of the involvement of the major employers and trade union organisations, which take part in the major decision-making processe s of social and economic policies with the government, characterises the use of social concertation in the Italian industrial relations tradition (Baglioni, 1995).

During the 1990s social concertation was rather used as a method to create the conditions supporting the launch of socio-economic policies at the micro-level than being considered the tool for engaging in economic and social initiatives for employment at the macro-level. Moreover the right of veto by Italian unions on government's social and economic policy initiatives facilitated unions taking part in such initiatives by fostering the setting up of what Carrieri (2002: 25) defines as a 'state of necessity' within Italian policy development. This state of necessity enabled government to pursue concertation for the regulation of social policy over almost a decade. The strategy pursued by the centre-right government during the 1990s is to endanger that 'state of necessity' as the traditional base for social concertation in the Italian context. How was that made possible? The main answer focuses on the government's attempt to move from concertation to social dialogue.

Although the Minister of Welfare and Labour Policies has stated that Berlusconi government has introduced the new measures on the labour market after more than three months of consultation with the unions consisting of meetings and sometimes 'lively discussions', this has happened within the newly defined framework of social dialogue. The result is that provisions are determined within a new relationship with the trade unions whereby the government intends to maintain broad autonomy with respect to economic and social policy initiatives by fostering a new base for representation, which is through mutual recognition by the social parties. Accordingly the government has to abstain from intervention from trade unions and employer's organisations and collective bargaining. This is a critical change especially given the legislative base of the social parties in the Italian industrial relations system.

In a recent conference held in April at the University of Modena and Reggio Emilia on 'Industrial Relations and Change for European Union' the CISL General Secretary Savino Pezzotta made clear the rationale underlying the unions' current struggle. He claimed: 'Italian trade unions don't believe that the new century will end up with social concertation and government has to understand that'--and he continues--'unions are open to discuss with the government but only if the methods and the rules of the game will be clear to us and accepted by us. Whether the government prefers to use the term social dialogue rather than concertation to describe this state of play does not matter; what's a matter for us is that social dialogue has nothing, I say nothing, in common with Thatcher and Reagan's patterns of arbitrary recognition among the social actors'. (1)

Hence, it is evident that the protest in Italy goes significantly further than Article 18 of the Workers' Statute although it certainly does embrace it. Components of the climate of 'discontent' around the package of reforms included in the White Paper were the unions' concerns on their role in the process of defining the measures for social and economic progress in the Italian economy. The government's recent conceptualisation of social dialogue implies that the possibilities for unions to act is limited to a discussion of the government's proposals and does not necessarily involve agreement with the social actors. Accordingly, the introduction of incentives to liberalise the labour market has to be examined as complementary to the government's attempt to dismiss trade unions from certain socio-economic and political spheres while moving away from concertation to social dialogue. Among the forms suggested to achieve this aim include, as we have seen, the breaking of union unity and the introduction of a volu ntary base for recognition between union and employers' organisations for collective agreements. As far as the former is concerned most recent events in the Italian socio-political arena illustrate a serious warning in this respect due to the government's decision in June 2002 to shift further the negotiation on the labour market with the three major union confederations. As a result the content of the Article 18 becomes included in a different decree (law) package and bargained later with the unions. CISL and UIL accepted the government's last proposal given the necessity to speed up changes in other fiscal and economic measures and in July 2002 signed the 'Pact of Italy' (Patto per l'Italia) which extends the reform of the Article 18 to firms under 15 employees for a temporary period. In contrast CGIL opposed the proposal and refused to sign because they considered it a further attempt by the government to escape direct confrontation with the major organisations representative of workers' interests.

It is still uncertain whether government will subordinate its policy to the interests of the three main trade unions confederation by allowing changes (even small) to the content of the reforms or whether industrial relations in Italy will continue to face crisis under the threat of union split. The repeated statements by the Minister of Labour and other government members that they are willing to endorse dialogue and discussion with the unions on the concrete content of the reforms, might suggest optimism. However, the fact that around 16 million people mobilised in two major protests, which were organised within three weeks of each other, and that further mobilisation is expected to be organised by CGIL over renewal of labour market regulations and in favour of workers' rights stimulate some strong reflections on the problematic impact of the renewal for union democracy. The main union and workers' concern is the neo-liberal nature of the reforms programme the government put forward, which is certainly dist ant from the unions' objectives as representatives of workers' interests.

Notes

(1.) Savino Pezzotta-CISL General Secretary-Modena 19 April 2002 and Il Sole 24 Ore 20.4.02 - p.6

References

Carrieri M. (2002) Agire per accordi. La concertazione nazionale e locale, Roma, Ediesse

EIRO (2001a) Intermediate Employment Targets Agreed at Stockholm, http://eiro.eurofound.ie/print/2001/04/feature/EU0104208F.html

EIRO (2001b) New Metalworking Collective Agreement signed despite CGIL opposition, http://eiro.eurofound.ie/print/2001/07/feature/rr0107193F.html

Giugni G. (1995) 'La caduta delle ragioni di divisione nell'esperienza sindacale e italiane', Prospettiva Sindacale, 87: 7-19

Hyman R. (2002) Understanding European Trade Unionism. Between Market, Class & Society, London: Sage

Negrelli S. (2000) 'Social Pacts and Flexibility: the Italian Experience' in Fajertag G. and Pochet P. (eds) Social Pacts in Europe, Brussels, ETUI.

Pizzorno A. (1978) 'Political Exchange and Collective Identity' in Grouch C. and Pizzorno A. (eds) The Resurgence of Class Conflict in Western Europe Since 1968, London: Macmillan

Regini M. (1984) 'The conditions for Political Exchange' in J. Goldthorpe (ed) Order and Conflict in Contemporary Capitalism, Oxford: Clarendon.

Regini M. and Regalia I. (1998) 'Italy: the Dual Character of Industrial Relations' in Ferner A. and Hyman R. (eds) Changing Industrial Relations in Europe, London: Blackwell.

Valeria Pulignano is a lecturer in Industrial Relations at Warwick Business School. Her research interests are in comparative industrial relations and sociology of work, employment restructuring practices and union response. Currently, she is engaged in research on international labour, particularly in Europe and the United States.