Making industrial relations work for the working poor

MAKING INDUSTRIAL RELATIONS WORK FOR DECENT WORKBRIEFING ON THE SITUATION IN ITALY 45

02

IntroductionPoverty and precarious employment

Poverty has recently risen sharply in Italy. People who have a disposable income below60 per cent of the national median income are considered “relatively poor”: in its 2010report on poverty in Italy, the Central Institute of Statistics, ISTAT, sets the povertythreshold at € 595.48 a month for a one person household. By the same token, a povertythreshold of € 992.46 is set for a two-person household, € 1,319.97 for a household withthree members, € 1,617.71 for a household with four members, € 1,885.67 for fivemembers, € 2,143.71 for six members, € 2,381.90 for seven members or more1. (CentralInstitute of Statistics – ISTAT). According to the 11th Annual Report on Poverty andMarginalisation drafted by the Italian Caritas and Fondazione Zancan, 2,734,000 familieswere 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 familiesand people slightly increased in comparison to the previous year2.

The first reason for the increase in poverty is certainly the reduction in the number ofpeople employed: according to the latest annual statistics published by ISTAT3, on 31December 2010, the number of people employed was about 23 million, 153,000 less incomparison with the previous year. Furthermore, ISTAT indicates that in 2010 there wasa fall of 285,000 full-time workers holding a permanent contract – standard employmentcontract – the highest reductions being registered in industry (-190,000 workers) andconstruction (-14,000 units); this decrease was only partly compensated by the modestincrease in the service sector (+35,000 units), which, as will be described in this pilotstudy, is one of the sectors with the highest concentration of low income workers, forwhom decent working conditions are not easily accessed.

The second reason has to do with the progressively precarious nature of the employmentrelationship, which is represented by two different phenomena: the reduction in thenumber of hired employees, whose contracts are part of national collective agreements,and the increase in so-called “independent” workers.

According to ISTAT data for August 2011, «the national collective agreements now inforce concern 66.9 per cent of the entire hired workforce»4.

Against this economic background, this examination of the impact of low-paid work inItaly –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 wage-earner or as an independent self-employed worker, and lives within a household whosetotal income falls below 60 per cent of the equivalent median national income»;

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 retailbusinesses), social cooperative enterprises6 and, particularly for highly qualified jobs,professional service firms. All such people are in fact denied the right established inarticle 36 of the Italian Constitution, which provides that «Workers have the right to aremuneration commensurate to the quantity and quality of their work and in any casesuch as to ensure them and their families a free and dignified existence»7.

1 Istat, “The Poverty in Italy 2010”, Rome,July 2011, in: www.istat.it

2 Caritas Italiana Fondazione Zancan:“Poveri di diritti / Poor in rights”, Rome,October 2011

3 Istat, “Statistic Yearbook 2011”, Rome,December 2011, in: www.istat.it

4 Istat, “Collective Agreements andContractual Salaries”, Rome, August 2011,in: www.istat.it

5 Definition taken from Michèle Lelièvre -Eric Marlier - Patrick Pétour, Un nouvelindicateur européen: les travailleurspauvres, July 2004. The same definition is adopted by the European Commission(Committee for the Social Protection)

6 A Social Cooperative is a non-profitcommercial enterprise featuring a mutualaim (that is to say, it has been foundedwith an aim to provide their members withgoods, services or employmentopportunities, at more profitableconditions compared to the free market)carrying out its activities in the socialsector (e.g.: social and health care,education, employment and job placementopportunities of disadvantaged people)

7 Italian Constitution, art. 36, in:http://www.senato.it/documenti/repository/istituzione/costituzione_inglese.pdf

“In its 2010 report on poverty in Italy, the Central Institute of Statistics, ISTAT, sets thepoverty threshold at ¤ 595.48 amonth for a one personhousehold. By the same token,a poverty threshold of € 992.46is set for a two-personhousehold, € 1,319.97 for ahousehold with three members,€ 1,617.71 for a household withfour members, ¤ 1,885.67 forfive members, € 2,143.71 for sixmembers, € 2,381.90 for sevenmembers or more1. (CentralInstitute of Statistics – ISTAT)”

03

OverviewThe rise of the working poor

How was it possible for the “working poor” to become an established phenomenon in thiscountry? Why could it not have been prevented through labour laws and industrialrelations? The legal text of reference is still legislative decree 276/20038 which, based ona parliamentary enabling act9, reformed the existing employment relations by introducingnew forms, on the assumption that in difficult economic times, it is easier to create newjobs using more flexible employment contracts, which are cheaper for the employers.

Article 4 of this legislative decree introduces a «register of private employmentagencies», private companies which, following the completion of accreditationprocedures, are then authorised to carry out employment related activities based onoutsourcing, headhunting, recruitment, and outplacement.

Outsourced labour was also introduced in Italy: in practice the workers become hiredemployees of the private employment agency itself, which then sends them to work (theso-called “mission”) in a contracted company. The law provides that companies can useoutsourced labour for their regular activity, though only «in presence of technical,production or organisational reasons, established by the law, or by national or territorialcollective agreements signed by the most representative associations of employers andemployees»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 workcontracts for some specific jobs11 (see moreover, in chapter 5, some good practiceswhich have arisen from such regulation).

The entry onto the labour market of this new category employer has had a noticeableeffects on industrial relations: employees working in the same company, performingthe same tasks, and covered by the same collective national work contract, are stillsubstantially different from each other, since they refer to different employers, and havedifferent prospects in terms of job stability.

Another innovation is the greater flexibility introduced in managing the working hoursof part-time employees: the employers have fewer restraints when it comes to askingthe workers to work overtime, and can include flexibility clauses in the contracts. Sucha legal framework puts the workers in a weaker position, forcing them to accept non-decent working conditions.

The legislative decree also regulates independent work or self-employed jobs, with theaim 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 becominglong lasting, and causes a permanent precarious state.

This situation is confirmed by the trends highlighted in the introduction of this pilotstudy, with reference to statistical information published by INPS and ISTAT, which bothrefer to a continuous decrease in the number of permanent hired workers, and to asteady increase in independent workers.

As far as independent workers are concerned, they represent a group including variouskinds of contractual agreements. ISTAT reports there were 5,700,000 independentworkers in 2010, while according to the records of the INPS (Italian National Institute forSocial Security) the total number of registered workers has diminished (-82,650), eventhough, despite the decrease in the number of hired workers (-97,215), there has beena strong increase in the number of independent workers (+24,613)12. The increase inindependent activities should not be regarded as evidence of a vital and strong economybased on self-entrepreneurial trends, but rather shows that workers are getting poorer,

8 Legislative decree 10 September 2003, n.276 "Implementation of delegatedregulations on topics related toemployment and labour market”, withreference 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 ofinformation 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 1areas, construction within factories, anyother case established by national orterritorial collective agreements signed bythe most representative associations ofemployers and employees

12 Inps, “Annual Report 2010”, Rome, May2011, in: www.inps.it

04

and that they are forced to “formally become independent workers”, although in practicethey 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 socialprotection at all, and the employer does not pay any welfare contribution, but onlycollects a 20 per cent tax payment deducting it from the gross wage agreed. With a viewto stimulating an easier transition towards more stable and protected employment –anevent which rarely occurs– regulations have been introduced to limit the maximumgross 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 thereare favourable employment prospects and a good relationship, the employer will thenmost 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 couldsimply be because the employer wants to reduce labour costs, in view of guaranteeinghigher profits and/or competitiveness for the company– the only choice left available forthe 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 abideby the organisational restraints imposed by the “employer”. Workloads and tasksentrusted to these workers are very similar to those assigned to the permanent hiredworkers: they can not perform their skills with more than one employer, but they don’tenjoy 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 willrarely happen that such an independent worker –a non-hired worker who is in practicesubject 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 natureof his/her work relationship, knowing that, in case he/she would succeed, their workingconditions would most probably become unbearable afterwards.

The case of project contracts provides even clearer evidence of how the concept offlexibility, previously introduced with the aim of facilitating entry into the labour market,does not match with stable employment. Flexible work becomes synonymous withprecarious work, undermining the positive actions which could be taken in theframework of industrial relations and social dialogue.

By activating a project contract, the employer is not bound to apply the hourly wagerates established by the national collective agreements, thus saving money on socialand tax charges, which are lower than the parallel charges for regular work contracts,while the worker formally keeps their status as independent worker. The projectcontract:• 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 anactivity complete with start and end details;

• cannot establish for the worker either a pre-arranged timetable, or a total hourlyworkload, or an obligation to coordinate with the company organisation, unless thisoccurs within the limits of the project activity;

• can be extended only once.

Such limitations have been introduced with an aim to make project contracts realopportunities to enter the labour market: after the only extension allowed, they shouldideally be transformed into standard permanent contracts.

What actually happens is that project workers are often employed in structural tasksrelated to regular company operations, thus being assigned a defined number of hours

05

13 Legislative decree 6 September 2001, n. 368"Implementation of Directive 1999/70/ECconcerning the framework agreement onfixed-term work established by UNICE, byCEEP and by CES" – Law 24 December2007 n. 247 “Regulations for theimplementation of the protocol of 23 July2007 on social security, work andcompetitiveness aimed at fostering equity– Law 6 August 2008, n. 133 "Conversion inlaw, with amendments, of the law-decree25 June 2008, n. 112, including urgentprovisions for the economic development,simplification, competitiveness, stabilizationof public finance and taxation adjustment"

14 Large Retail Surfaces

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 projectentrusted to the worker, often only in theory and on paper.

From an industrial relations point view, the fact that the regulations established in projectcontracts are not correctly implemented greatly weakens the position of these workers(the same features already discussed above for freelance professionals also apply to projectworkers), who are often little aware of their rights, and of the option to report to the tradeunions in order to find proper support.

Legislative decree 276/2003 does not mention fixed-term contracts, regulated bydifferent laws13, which have also been recently changed, with a view to making thesecontracts more flexible and more readily available for the employers. But in this casetoo, the changes introduced, far from making entry to the labour market easier, haveultimately led to greater precariousness for the workers, who don’t have any prospectof stable employment, as they are forced to move from one contract to another, andhave become weaker players on the industrial relations scene.

Last but not least, illegal work represents a form of “poor work”, totally hidden from anyofficial evidence, thus eluding all tax and social charges due. The impact of illegal workcannot be detected from official statistics, but for 2010, ISTAT estimates it accounts for17.3 per cent over the total workforce, a figure mostly involving migrant citizens withoutresidence permits.

The contractual framework Decent work (not) for all

In order to better appreciate the impact of the working poor phenomenon, together withits main features, it is necessary to go beyond the distinction between protected hiredemployees and non-protected non-hired workers. Nowadays the Italian workforce canbe broken down into Standard Hired Workers, Non-Standard Hired Workers, and Non-Hired Workers.

Standard Hired Workers are those employees who have a full-time and permanent workcontract; 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 thenational reference collective contracts:

The figures in the above table refer to gross amounts (i.e. inclusive of income taxes: 23 percent for incomes up to 15.000 euro, and 27 per cent for incomes between 15.000 and 28.000euro), 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 disposableincome.

Sector Minimum Gross Values Maximum Gross Values

A €/hour A.1 €/month B €/hour B.1 €/month per full-time per full-time

contract contract

Retail Trade L.R.S.14 7.40 1,184.00 12.60 2,016.00 Services / Cleaning 6.58 1,052.80 9.70 1,552.00Construction 8.60 1,376.00 10.80 1,728.00Social Cooperation 6.75 1,080.00 9.95 1,592.00Caregivers (not living together) 4.22 675.50 7.40 1,184.00

Source: National Collective Work Contracts

“Illegal work represents a formof “poor work”, totally hiddenfrom any official evidence, thuseluding all tax and socialcharges due. The impact ofillegal work cannot be detectedfrom official statistics, butfor 2010, ISTAT estimates itaccounts for 17.3 per cent over the total workforce, afigure mostly involving migrantcitizens without residencepermits.”

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It then becomes clear that the gap reported by ISTAT goes from a minimum of 595.48 eurosfor single member households, to a maximum of 2,381.90 euros for families with seven ormore members.

By comparing such data, it then becomes fairly clear that the workers earning the monthlygross amounts reported on the table above in the left column A.1 are poor (a caregiver witha 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 permonth 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 columnB.1 enjoy a higher level of protection, though they mainly correspond to the higher levelsand 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 incomereferred 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 nationalcollective agreement sets standard wages which would place them above the ISTATthreshold, even when they are hired in the lower ranks. On the other hand, the constructionsector 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-timeemployment contract.

Furthermore, the construction sector often reports problems connected to workers’ healthand safety, both for the illegal workers, who are excluded from any kind of protection, andfor those who are regularly employed, but also for the independent workers. By favouringthe bid that offers the lowest price, the Tender Contract Code15 drives the companies tocompete 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 levelof 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 thanthe 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), butalso later. In fact, the worker, because of his membership status, is asked to recapitalisethe company in case of losses, or when –and this doesn’t happen rarely in times ofcrisis- cooperative enterprises are paid late by their (public or private) customers.

In some cases workers are deliberately employed on a lower contract level: often theseare foreign workers (who often do not even have enough information to realise it), andthose workers employed in companies mostly dealing with public or private customerson tender contract systems. When a tender contract expires, and the new contract isgranted to another company, the workers are absorbed by the new company: they riskbeing paid less however due to shorter working hours (this happens because in orderto 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 onstandard employment contracts: their working conditions are protected by the industrialrelations system, but the strength of the trade unions has decreased over time.

Non-Standard Hired Workers are those employees who have a part-time or a fixed-termemployment contract, and outsourced workers, who are hired by private employmentagencies, and then sent to work in the contracted companies; they are mostly youngworkers, under 35, and women, for whom there is a greater demand than men in thespecific sectors where these kinds of agreements are more used.

15 Legislative decree 12 April 2006, no. 163

16 Legislative decree 9 April 2008, no. 81,modified by legislative decree 3 August2009, no. 106

“In some cases workers aredeliberately employed on alower contract level: often theseare foreign workers (who oftendo not even have enoughinformation to realise it), andthose workers employed incompanies mostly dealing withpublic or private customers ontender contract systems. Whena tender contract expires, andthe new contract is granted toanother company, the workersare absorbed by the newcompany: they risk being paidless however due to shorterworking hours (this happensbecause in order to win thetender contract, companies willtry to reduce the number ofhours of work), or because thelength-of-service benefit paid to the worker by the previouscompany, will not be continuedby the new one.”

07

These contractual arrangements are widespread in the service sector, where they nowinvolve 22 per cent of the workforce, but they account for an even higher share in thetourism 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 hourlywage as full-time workers, they have lower working hours. A part-time worker hired atan 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 foremployment;

• 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 retailtrade, cleaning, and social and health care, there are workers commuting up to halfa workday in order to reach their workplace and work a one-hour shift. Such situationsprevent the worker from finding other jobs allowing him/her to reach higher levels ofincome;

• part-time workers are required to be highly flexible, since they receive shift worknotices 48 hours beforehand, and they might be asked to deliver their shifts in differentlocations –this happens often in the large retail trade which recruits their workforcethrough private employment agencies;

• fixed-term work contract employees, whether part-time or full-time, run the risk ofdiscontinuous work.

Non-Hired Workers include occasional work consultants, freelance professionals, andproject workers. They are mostly young people with a high educational level, but alsoforeign citizens working in the construction sector, who in practice are subject to a hiredemployment-like contract, masked as a formally independent job. These workers arelow 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 evenfor highly qualified skills);

• the income finally available is further decreased, by up to 50 per cent, because the workermust take care of paying in full taxes and social charges on the amount paid by theemployer (this applies to the self-employed worker with his/her own VAT number, whileproject 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 unionconfederations have establishedspecific unions for these newcategories of workers (FeLSA20 CISL, NIdL21 CGIL,UIL-Tem.p@22), and they havedevised some good practiceswhich take into account thechanges that have occurred in the labour market, and whichpromote the right of both Non-Standard Hired Workersand Non-Hired Workers toaccess a consolidated system of industrial relations.”

08

Industrial Relations

The three-tier workforce model we have described above also affects the structure ofindustrial relations.

Standard Hired Workers are still the most protected, because they can rely on a stable setof 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 crisishas weakened the margins for collective bargaining at the local company level).

Non-Standard Hired Workers are less likely to benefit from this consolidated industrialrelations system: for instance, given their working conditions, they are not able to fullyavail themselves of the right to trade union membership, which is guaranteed by theItalian 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 unionmembership 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 morelikely to be postponed until after the work contract has expired.

Non-Hired Workers do not access, as such, the industrial relations system: bargaininghere 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 industrialrelations 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 andorganisational grounds, in reaching, organising, representing and protecting workers whoare physically «scattered all around»19, and who are culturally far away from the tradeunion, partly because they are foreigners (above all the care givers), but also because theyhave 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 haveestablished 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 theright of both Non-Standard Hired Workers and Non-Hired Workers to access aconsolidated system of industrial relations.

The fact that Non-Standard or Non-Hired Workers are excluded from the consolidatedindustrial relations system often also affects the “human resource managementsystem” established at sectoral or company levels.

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 anindustrial relations point of view, is in the weakest position.

Far from making proper use of the flexible contract options available to make it easierfor new workers to enter the labour market, the trend is to use these contract schemespurely to cut costs and to protect the competitive position of the company. Alternativepolicies aimed at supporting these contracts with continuous training plans in order toinvest in the professional development of the workforce, with their positive outcomes oncompany 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 howto reach these workers in order to organise, represent them and defend their rights, itmust also be to promote cultural change, focused on enhancing investment in theworkforce in terms of knowledge and professional growth.

18 Excerpt from an interview with ClaudioTecchio, stakeholder

19 Excerpt from an interview with TizianaTripodi, stakeholder

20 FeLSA: Federazione LavoratoriSomministrati Atipici e Autonomi /Federation of Outsourced Atypical (Non-Standard Hired Workers) andAutonomous (Independent Workers)

21 NIdL: Nuove Identità di Lavoro / NewIdentities of Labour

22 Categoria Nazionale LavoratoriTemporanei Atipici e Autonomi / NationalCategory Temporary Workers Atypical andAutonomous

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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 arecorrectly applied. There was a successful example of this in 2011, when the workers ofa large private enterprise in the logistics and transport business were able to convertover 400 project contracts into full-time permanent employment contracts. The processbegan in 2009, when the trade unions «had asked the company to give the workers jobstability, after having assessed that the project contract used did not meet therequirements concerning tasks, pre-arranged work timetables, and lack of workers’autonomy in the implementation of the activity». Although this was the outcome ofsometimes conflicting industrial relations, it can be considered an example of “goodpractice” 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 theapplication of the agreement was extended nationwide, since the company is present allover the country.

In other cases, job stability has been secured thanks to non-conflictual industrial relationsand 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 Piemonterregion 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 agenciesthemselves; in the Campania region, the regional government was also involved, withfinancial support for the private employment agencies.

Both cases refer to positive practices, implementing corporate social responsibilitypolicies. The private employment agencies agree to carry part of the risk connected tothe workers’ outplacement: a limited risk when the workers’ skills are high. For this goodpractice to become more widespread, therefore, it is important to invest in continuoustraining for the workers.

Consultation at the local level. This is a form of bargaining that has long been a part ofsocial dialogue in Italy, where the trade unions play a major role in defining the costlevels of various fees and services, together with the quality standards of essentialservices, protecting both the citizen as the service end-user, and the employee workingin 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: theregional government of Piemonte, municipalities, a consortia of municipalities deliveringsocial care services to the local population, social cooperative enterprises, an associationgrouping several volunteer organisations, and the trade unions. All organisationsengaged in the debate over the regulations and the service standards to be implementedin a retirement home, looking for the proper balance between available resources andquality standards»24. Thanks to this approach, it has been possible to work out a platformfor providing appropriate services.

This experience as a good practice in terms of social dialogue. The trade union doesn’tsimply interact with its “natural counterpart”, that is the employer, it also relates withthe institutions bearing the political and financial responsibility for delivering essentialservices to the citizens.

Owing to public expenditure cuts, in the current economic climate, the tender contractsystem in the service delivery chain favours the lowest bids, which are then awarded thecontract. This situation leads to a high risk of lower quality, and a parallel risk ofworsening working conditions for the employees involved in the delivery of such services.The participation of the trade unions at the negotiating table as concerned supportersof 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 RiccardoNegrino, 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” involvedin non-decent work and in low income settings:

• foreign citizens, working in caregiving occupations, or in the construction sector, oftenillegally;

• young workers (under 35), who cannot access standard work contracts, and who arethen forced to enter the labour market through the flexible mechanisms establishedby the law (non-standard contracts, or independent work contracts masking hiredemployment-like contracts), and who are not able to move on to more stable andbetter paid situations;

• women, working in general business support services (cleaning) and in the social andhealth care sector, with low hourly wages, limited timetables, and a high demand forflexibility on the part of the employer.

The research has also identified the critical issues which currently prevent the definitionof 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 ofindustrial relations, but also human resource management. This is the result of acultural 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 aconsolidated system of industrial relations. On the other hand, a fast growing groupof workers who, thanks to more lenient legislation and to a substantial acceptance ofsuch 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 moredifficult to reach, to organise and to represent;

• the need for the trade unions to promote a proactive process of change at the culturallevel, 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 canplay an active role in securing job stability for workers in precarious employment. Asregards social dialogue, through their participation in local consultations the tradeunions can help both citizens as service end-users, and employees working in theservice delivery chain.

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Recommendations

At this time of serious crisis, institutions, political forces, the social partners, and civilsociety 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 toovercome the excessive use of flexible work contracts, and make standard hired workcontracts 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 thatstructural reforms can take place: the institutions, together with the social and politicalforces 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 thecitizens, which are jointly paid for by general taxation, with the participation of thecustomer (similar to the contribution paid by the patient through the “sanitary tickets”system). Consultation helps to define an appropriate balance, which must besustainable for all partiess involved, and must guarantee decent work to a widergroup of employees.

b) Improve the tender contract procedures to move away from the prevailing criterionfavouring the lowest bid, especially for those cases where this practice puts at riskthe overall quality of the services delivered to the citizen, together with the workingconditions of the employees, as often happens in the construction business, or in thesocial and health care sector. These issues must be dealt within the tender contractspecifications, and both the organisations publishing the calls for tenders from oneside, and the companies delivering the services from the other side, must abideresponsibly to such specifications.

c) Increase inspection checks aimed at disclosing illegal work (especially on constructionsites); situations where workers are not fully granted their rights (with special referenceto protection and social security issues); and cases where non-hired workers are inpractice on a hired employment-like contract, though masked as an independent job(freelance professionals with one single client, project workers forced to abide by adefinite workload and to a timetable). Increasing controls in the construction sectorwould bring illegal work to light and have undoubted advantages in terms of improvingboth safety and work conditions

To the employers:

a) Invest in bilateral organisations: these are the places where debate and confrontationtake place between the representatives of both the workers and the employers, withthe overall goal of governing the labour market through activities like: the promotionof regular and quality employment; helping match demand and supply in the labourmarket; organising training activities; devising plans for continuous training incompanies.

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b) Standardise good practice regarding the transition to stable employment contracts.While it is true that in times of crisis and globalisation, flexible employment contractsmay 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 currentstructural crisis.

To the trade unions:

a) Provide more information to Non-Hired Workers and to Non-Standard Hired Workerson the protection of their rights, even if they are excluded from the current consolidatedsystem of industrial relations.

b) Increase the organisational drive already started among those sections of the tradeunion 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).

Authors: Paolo Pozzo, MarinaMarchisio, 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©SOLIDARMarch 2012

This publication has been produced with theassistance of the European Union. The contentof this publication is the sole responsibility ofSOLIDAR and can in no way be taken to reflectthe views of the European Union.

About the project“Making Industrial Relations workfor Decent Work” is a one-yearproject which looks to intensify thecooperation and mutual learning ofrelevant actors - employers, unions,NGOs, think tanks and workers – toidentify the role as well as the toolsand models needed for effectiveindustrial relations, with the ultimateaim of combating precarious employ -ment and realising decent workingconditions and quality jobs for all.

This briefing, coordinated by SOLIDAR,was produced by SOLIDAR memberISCOS in Italy. www.iscos.cisl.it

All “Making Industrial Relations workfor Decent Work” pilot studies areavailable on www.solidar.org

SOLIDAR is a European network of 56NGOs active in over 90 countriesworking to advance social justice in Europe and worldwide. SOLIDARvoices the concerns of its memberorganisations to the EU and inter -national institutions across the policysectors social affairs, internationalcooperation and lifelong learning.

Supported by DG Employment, Social Affairs and Inclusion.

decent workdecent life