The protocol regarding welfare of 23 July 2007 and Law 247/07

1. The protocol regarding welfare of 23 July 2007 and Law 247/07 By Giorgio Santini Confederal secretary of CISL Brussels, 29 February 2008

2. The protocol of 23 July 2007 and Law 247/07an important concertative agreement On 23 July 2007, the Italian Government, CGIL CISL UIL and employers’ Associations signed an agreement of intent concerning “pensions, work and competitiveness”. The agreement was signed after months of negotiations on the anniversary of another important Agreement of 23 July 1993 regarding wage and employment policies, the system of collective bargaining and policies concerning work. The contents of the agreement were approved through a certified consultation between workers, pensioners, young people and temporary workers. There were 5.115.054 voters of which 81,62% were in favour. The protocol was transposed into Law N° 247 by the Italian Parliament on 23 December 2007. There were few modifications to the original text of July. The Law contains various delegations which the Government must carry out within the next 12 months and in conjunction with the social partners.

3. Protocol of 23 July 2007 and Law 247/2007:The political importance for Cisl • Law 30 and decree 276(the so-called Legge Biagi) have not been repealed or radically changed. Certain points have simply been improved. • The general reform of the Italian system of social shock absorbers has become part of the Government agenda after a debate lasting decades. • The concrete measures foryoung people foreseen in the protocol demonstrate that the confederal trade union organizations do not exclusively protect the elder generation of workers (ideological problem between the position of insiders/outsiders in the labour market). • The growth in female employment(in Italy, female employment levels reach only 46.9%), as a way of satisfying the Lisbon objectives, has become a primary aim, and in its turn has become a central theme of “conciliation” and of quality of female employment. • The protocol follows the policies of stabilization and incentives to create open-ended contracts contained in the budget law of 2007.

4. Protocol of 23 July 2007 and Law 247/2007: the part regarding social security • Resolution of the problem of the “scalone” (immediate three-year increase of the retirement age) • Modification of the criteria concerning retirement pensions; • Derogations for types of work which are particularly arduous; • The possibility for productivity bonuses defined by second level bargaining to be considered in pension payments; • An increase in minimum pensions, safeguarding social security contributions; • The setting up of a periodic meeting between Government – trade union organizations for the re- evaluation of pensions; • The indexation of pensions has changed. With the current agreement, pensions increase precisely at the same level as the cost of living for pensions which are between 3 and 5 times higher than the minimum pension; • Commitment to resolve the question regarding the impossibility to earn a salary and at the same time draw a pension • Extension of the totalization of periods of contributions; • Revision of modalities and criteria to modify the coefficients, safeguarding social equity; • Increase in semi-subordinate contributions

5. Law 247/2007:labour interventions There have been interventions to change certain types of non-standard contracts in order to limit risks (greater protection, a more important role of collective bargaining, encouragement towards more stable contracts) • A reform of social shock absorbers is foreseen in two steps: • immediate interventions to improve unemployment benefits • interventions (enabling act) in order to guarantee universal protection • Four enabling acts are foreseen • (in conjunction with the social partners) regarding: • reorganization of employment incentives • improvement of employment services • reorganization of apprenticeships • reorganization of norms concerning female work Incentives are being promoted regarding bargaining at second level (company and territorial)

6. The measures regarding fixed-term contracts • Limits to the renewability of fixed-term contracts. Whenever a working agreement between employer and employee regarding the same duties exceeds 36 months including extensions and renewals, independent of the period of interruption, the employer-employee relationship will automatically be considered open-ended. One further fixed-term contract can be stipulated at the Provincial Labour Office, with the help of a trade union representative, for a period to be agreed upon by both parties. A transition phase of 15 months is foreseen. • Limits in the use of fixed-term contracts. • The role of collective bargaining is widened in matters regarding the maximum number of fixed-term contracts permitted per sector and enterprise. • Rights of precedence. • Workers that have worked on one or more fixed-term contracts in the same company for a period of at least 6 months have first rights to be hired on a contract for one year. The workers hired for seasonal work have priority for one year over new workers hired by the same employer on fixed-term contracts covering the same seasonal activities.

7. Part-time work - Incentives to create “ long” part-time and part-time work for health reasons: • there will be incentives regarding part-time contracts with a high number of daily working hours and the transformation (also temporary) of full-time work into part-time work when requested by male or female workers for health reasons (In Italy, only 4% of men and 25% of women work part-time). • - Flexible and elastic clauses: • the possibility for an employer to increase the number of working hours (elastic clauses), and modify the working timetable (flexible clauses) must be now decided exclusively through collective bargaining. Notification has been increased from two to five days. • - First rights to a return to full-time regimes: • the workers that previously transformed their work from full time to part time will have first rights to full-time hiring. • - Priority in transformation into part-time for health problems and medical assistance: • when there are oncological pathologies which regard marriage partner, children or parents; • when a worker assists a person they live with who has a serious 100 per cent disability; • when there is a child under the age of 13 or who is handicapped.

8. On–call work / Discontinuous work has been repealed;the collective agreements in the tourist and show-business sectors can foresee specific employer-employee relationships for discontinuous work, during the weekend, on national holidays, during school holidays. The workers willing to carry out discontinuous work for a defined period of time will receive a specific “willingness” indemnity . Staff leasing and on-call work Two types of contract introduced in the Legge Biagi of 2002/2003 have been repealed or limited to certain sectors following a “political” debate in Parliament. Open-ended staff leasing has been repealed; the Protocol foresaw the constitution of a negotiating table with the social partners concerning open-ended staff leasing contracts, leaving unaltered (or favouring through incentives to be established) the possibility for job agencies to hire workers on open-ended contracts. This matter regards only about 4000 workers at national level.

9. Within 12 months, the Government will, subject to agreement with the regions and the social partners, adopt one or more legislative decrees, following certain directive criteria and principles: the strengthening of the role of collective bargaining; the identification of national quality standards regarding vocational training in matters concerning professional profiles and training programmes, certification of competences, the validation individual training projects and the recognition of the vocational training capabilities of enterprises in order to facilitate the territorial mobility of apprentices through the identification of the minimum requirements to be able to participate in training activities; with reference to the professional apprenticeships, mechanisms will be introduced in order to guarantee the identification of essential levels of performance. These mechanisms will be set up uniformly and immediately on the entire national territory; adoption of measures to ensure the correct utilization of contracts for apprentices. Apprenticeship

10. Within 12 months, the Government will adopt one or more legislative decrees, following certain directive criteria and principles: the strengthening of information and monitoring systems for a more efficient use of data; Improvements in collaboration between public services and private agencies, foreseeing the definition of criteria to authorize subjects which operate in the labour market and the definition of essential performance levels in public employment services; programming and planning of measures regarding the the promotion of active aging for workers and enterprises; promotion of service pact as a management instrument adopted by the public employment services for interventions of active labour market policy; revision and simplification of administrative procedures. Employment services

11. Social shock absorbers • Immediate interventions: • an increase in the period of unemployment benefit to 8 months for workers below the age of 50 and to 12 months for workers above 50; • increase in indemnity to a total of 60% of the final salary for the first six months, to 50% for the 7th and 8th month and to 40% for any months to follow; • increase in the quantity and length of the unemployment benefit for unemployment situations with limited applicability, from the current 30% to 35% for the first 120 days and to 40% for the following days up to a maximum of 180 days; • free payment of contributions the entire period without work; • adjustment of unemployment benefit will be exactly equivalent to inflation rates (previously the figure was at 80%). • Reform in phases:(within 12 months of the conclusion of the procedures of the enabling act) • gradual harmonization of unemployment procedures and the creation of a single treatment, irrespective of qualifications, sector, size of the enterprise and type of work contract; • free payment of contributions calculated according to salary; • extension and harmonization of ordinary and extraordinary wages guarantee funds; • extending and improving the role of bilateral bodies; • involvement of enterprises in reinstatement processes; • connection with active labour market policies, favouring the stabilization and employment of weaker people and the improvement of employment services.

12. Re-organization of norms regarding female work • Within 12 months, the Government will adopt one or more legislative decrees, following certain directive criteria and principles: • incentives for the creation of flexible working hours are foreseen which will be linked to the need for conciliation and also to favour an increase in female employment levels; • revision of the norm regarding parental leave, with particular reference to the extension of the period of leave and the increase in relative indemnity; • strengthening of interventions at various governmental levels in matters regarding services for children and elderly people which are not self-sufficient; • directing the intervention linked to the programming of the use of European Community Funds, giving priority to female employment; • strengthening of the guarantees to be applied to ensure equal rights; • strengthening of the actions to be undertaken to encourage the development of female entrepreneurship; • interventions which will facilitate access and re-entry into the labour market for women, also through vocational training.

13. Young people Tax relief for graduates It is possible to consider the number of years required to graduate in matters regarding pension payments. The conditions are advantageous and can be paid in instalments over a period of ten years. The organization of social security contributions will be completed for the various categories (gradual increase in payments of semi-subordinate workers, to discourage the use of this form of work which is often used exclusively because the costs are low and also to reinforce the future pensions of young semi-subordinate workers). - Institution of a fund for semi-subordinate workers in order to offer credit of up to 600 euros per month for 12 months to cover any periods of inactivity; -institution of a fund formicro-credit to promote and develop innovative activities of young people and women, re-instituting the “prestito d’onore”, a type of loan which can be paid back later when the subject enters the labour market ; - monetary increase of research grants at Universities.

14. Measures to support supplementary bargaining: changing the current regime of de-contribution • The current norm regarding the de-contribution of productivity premiums has been substituted with a system of tax relief which will be financed with 650 million euros for each year from 2008 to 2010. The norm is as follows: • enterprises will receive tax relief regarding contributions of 25% of the payments eligible to benefit; • workers will receive relief equivalent to the social security contributions that they must pay on that part of their salary which can obtain this benefit; • the limit to individual premiums from second level bargaining, covered by this benefit will be equivalent to 5% of the annual remuneration (compared to the current limit of 3%). • Through a decree, the modalities regarding the benefit will be established, with particular attention being paid to the identification of priority criteria. • Introduction of tax relief for sums concerning second level remuneration. • The additional contributions regarding overtimehave been abolished.

15. Some final considerations: Protocol of 23 July and the debate regarding flexicurity The measures regarding the labour market contained in the Protocol of 23 July signed by the Government and the social partners and largely approved by the workers appear to be an important starting point. They give some insight into the Italian approach to flexicurity. The measures foreseen in the protocol, in fact, once realized, will create a labour market in which enterprises will be assured the necessary flexibility in employer-employee relationships, but at the same time the workers involved will be guaranteed adequate protection, and, more in general, all workers will be guaranteed protection in the labour market, strengthening employment services and extending and improving the use of social shock absorbers. Cisl is of the opinion that the Protocol will have to be supported over the next few years by an form of adequate funding and by constant controls and implementation of the results obtained.