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backEUROtalk April, 2012

Italy: The Protocol for the automotive sector of December 2011

On December 22, 2011, four of the main Italian national unions and the largest Italian employers' association (Federmeccanica) for the metalworking and automotive sector signed an innovative Protocol which amends and integrates the national collective agreement (NCA) for the metalworking sector. The most popular and powerful FIOM-CGIL union strongly opposed this Protocol and refused to sign it.

The Protocol represents the latest step in the attempt to overhaul the ailing Italian automotive sector, which has been dominated over the past couple of years by a fierce battle between FIAT, the major national champion and largest employer in the country, and FIOM-CGIL, the more left-wing oriented and powerful union association in the metalworking industry.

Particularly, the Protocol sets an important watershed by recognizing for the first time the specificities of the automotive sector within the larger collective regulation for the metalworking sector, which encompasses such diverse areas as IT companies and small manufacturing enterprises. In this respect, the Protocol is coherent with the trend set by the Italian government back in August 2011 soliciting a more "custom-made" approach to address local or industry specific needs through an ad-hoc regulation, which unions and companies can implement also in derogation from statutory provisions of law and national collective agreements.

Looking at it from a different perspective, the Protocol should also be regarded as an attempt of Federmeccanica to lure FIAT back among its members, after the company had decided in 2011 to leave the powerful Employer's Association Confindustria (which Federmeccanica belongs to). FIAT's exit from Confinudustria was instrumental to the company's freedom to sign a separate collective agreement with the unions to replace the national one for the metalworking sector. The collective agreement signed by FIAT and all major national unions except FIOM-CGIL is widely known as the "Pomigliano" agreement after the name of the plant where it was originally adopted and was later extended to all the company's factories in Italy. The fact that the Protocol signed by Federmeccanica is surprisingly similar to FIAT's Pomigliano agreement clearly shows who is currently setting the trend of industrial relations in the Italian automotive industry.

Taking a closer look at the Protocol signed by Federmeccanica, the driving factors that the parties have had clearly in their minds are productivity and efficiency through flexibility, which are unanimously considered the real critical features of Italian manufacturing industry by and large. The Protocol is essentially aimed at boosting productivity and flexibility in the regulation of work shifts and overtime.

More in details, the Protocol grants to all companies in the automotive business which already apply the NCA for the metalworking sector, the possibility to adopt the Protocol with immediate effect, replacing the corresponding provisions of the NCA, with the sole obligation to serve 20 days of notice to local unions, internal work councils and the employees.

The Protocol's highlights can be summarized as follows:

- it introduces a time scheme of 6 days per week including Saturdays, with 18 shifts per week, and the rotation of employees on all 3 shifts of 8 hours per day;

- in case the 18th shift (starting at 10pm on Saturday night through 6am on Sunday) is not worked at company's discretion, the employee's salary shall be deducted from festivities and paid time off;

- overtime is no longer calculated on a daily but on weekly basis;

- the limitations of 2 hours of overtime per day and 8 hours per week have been cancelled, while keeping the annual individual limit of 250 hours for companies with less than 200 employees, 260 hours for companies performing maintenance, installation and assembly activities and 200 hours for all other companies;

- the so-called "reserved quota" of overtime that employees can be unilaterally requested to work without the consent of the works councils is now increased from 40/48 hours per year to 120 hours per year in case of adoption of a weekly time scheme of 18 shifts and to 80 hours per year in case of 10 to 15 shifts per week; overtime must be notified to the employee at least 3 days in advance;

- in exchange for the above increased flexibility, the Protocol also provides that employees working overtime are paid more, especially if working the 3rd shift (usually 10 pm/6am);

- finally, employees working the 18th shift shall receive an additional bonus equal to 27 euros gross per shift.

In spite of its good intentions, the Protocol appears irredeemably flawed by the fact that it was not signed by all most representative unions at national level, which casts a serious doubt on its enforceability vis-à-vis those employees who are members of the opposing FIOM-CGIL association.

Source: Baker & McKenzie - GAI

For more information or to contact Baker & McKenzie, please click here.

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