Milan Employment Pact - Italy

Source: European Industrial Relations Observatory

Negotiations on the establishment of an "employment pact" for the city of Milan ended on 2 February 2000 with the conclusion of a final agreement on the initiative, which has been named Milano Lavoro. As had occurred with the preliminary agreement of July 1999, there was a split on the trade union side. The agreement has been signed by the Cisl and Uil union confederations only, while Cgil refused to accept it, since it considers that the forms of work flexibility introduced by the pact clash with existing legislative and collectively agreed regulations, as well as being detrimental to workers' rights. The pact, which has been promoted by the city council of Milan, has been also signed by the representatives of the other local authorities (the province of Milan and the Lombardy region), by the territorial structures of Cisl and Uil, as well as by two independent unions (Cisal and Ugl), and, on the employers' side, by: Assolombarda, the employers' organisation for the province of Milan affiliated to Confindustria; Api Milano, the local organisation of small and medium enterprises; Cispel, the confederation of local public service firms; trade and crafts associations (Unione del Commercio, Confcommercio, Confartigianato, Claai, and Cna); and cooperative associations (Confcooperative, Lega delle Cooperative and Agci).

Through this deal, the parties intend to conduct an important experiment in social concertation at territorial level, aimed at fostering employment growth (and the reduction of irregular, clandestine work) in favour of the weaker sections of the labour force, by introducing specific forms of work flexibility to promote the employment of these groups. The main elements of the agreement are:

1. access to the forms of flexibility defined by the agreement will be possible only for the implementation of specific and innovative projects which will be presented by the employers and then approved by a special tripartite commission;
2. the projects implemented under the pact's provisions will involve, in particular, non-EU immigrant workers who are unemployed or underemployed, socially, psychologically or physically disadvantaged people, and workers aged over 40 who are unemployed as a consequence of company restructuring;
3. the individual projects will be approved, verified and monitored by a special tripartite "concertation commission", made up of representatives of the city council, the province of Milan, and the social partner organisations which have signed the pact. The social partners will have joint representation on the commission. The first task of the commission will be to approve unanimously a regulation which, besides laying down procedures for its operation, will set the criteria for drawing up the projects;
4. with a view to promote the matching of labour supply and demand for the activities developed under the pact, a "Milano Lavoro single office" will be established. It will assist firms and workers in the recruitment process, facilitate access to the funding channels which are available for the projects, provide training services and career guidance, by monitoring the skills needed for the implementation of the various projects and by designing individual training paths to meet such needs, and oversee the effectiveness of training initiatives, in terms of job placement and the stabilisation of employment;
5. the kinds of employment contract which may be used for workers involved in the projects are fixed-term contracts, work/training contracts, traineeships, "employment grants" and "coordinated" freelance work. In particular, the possibility of recruiting people on fixed-term contracts are widened for the disadvantaged groups which have been identified as the priority beneficiaries of the employment creation projects, as well as for firms with up to five employees and people who already had "coordinated" freelance contracts with a firm; and
6. the main stated objectives of the pact are to fight precarious employment and favour the stabilisation of the jobs created. For this reason, investments in training and the eventual transformation of fixed-term employment into indefinite duration contracts are of great importance in assessing the projects.

The agreement is experimental and has a four-year duration. However, the parties may decide on a different duration during the agreement's term.

The signatories of the agreement have declared themselves satisfied with the deal. The city council representatives affirmed that, taking into account projects which have been already presented, the creation of some 1,000 new jobs may be expected during the first implementation phases of the pact. Cgil harshly criticised the agreement, since it believes that the possibility of implementing work flexibility, notably fixed-term contracts, on the grounds of subjective criteria will introduce forms of discrimination which risk creating labour market segmentation based on different levels of employment protection. Cgil maintains, moreover, that such discrimination would contravene EU regulations, as well as Italian law and existing collective agreements. In order to resist the implementation of the pact, Cgil has threatened extensive use of industrial action, and its general secretary, Sergio Cofferati, has affirmed that the "split" between unions which took place in Milan could have important consequences at the national level. Cisl and Uil, by contrast, stressed that the agreement will improve the prospects of being recruited for people who have great difficulty in finding a job, by creating a system of permanent concertation at territorial level for employment creation and the "regularisation" of irregular employment.

The concertation committee began its work towards the end of March 2000, when the first projects were submitted by employers. By the beginning of December 2000, the committee had met 19 times, approving projects for the creation of a total of 981 jobs. Company requests concerned 627 immigrant workers, 342 workers aged over 40, and 12 persons suffering from psycho-physical and social disadvantages. The projects envisaged short training courses paid for by the employer for 521 workers, while the other 460 workers should attend preliminary training courses financed by the European Social Fund or the provincial and regional vocational training programmes.

The employers' associations coordinated and promoted either their own projects or those organised by their members: the Association of Small Firms (Associazione Piccole Imprese, Api) submitted schemes - especially in the metalworking sector - for the creation of 105 new jobs; the crafts and small firms organisations applied to hire 200 workers; the cooperative associations asked for 80 auxiliary workers in social-welfare services; and Assolombarda, the employers' association for the province of Milan affiliated to Confindustria, promoted projects by its members for the creation of 140 jobs.

After the first few months of 2001, the total number of new jobs envisaged by the projects approved has risen to 1,040. Compared with the figures projected in the approved initiatives, at present 128 new workers have actually been hired, while another 68 are on training courses. The majority of employment contracts have been of open-ended type, while around one-quarter of them have been fixed term.

With a view to implementing the pact, a "Milan Labour Office (Sportello Milano Lavoro)" was opened in July 2000 in order to improve the match between labour demand and supply. The office runs a database containing the CVs of persons wishing to be involved in the projects set up under the pact. Personal details are collected by means of interviews, during which information is also given about the career guidance services and training courses available. At the beginning of March 2001, the database contained 1,200 CVs. Moreover, the office screens applicants for the various projects and, after a meeting to discuss the jobs, type of contract and training on offer, sends candidates to firms or training centres for them to make the final selection.

In the course of 2000, the implementation of a project submitted by Manpower (the multinational temporary work agency) highlighted possible forms of collaboration between the Milan Labour Office and temporary work agencies, based on access to the office's database. The latter, in fact, is an important source of information, because it is compiled in close collaboration with the local associations and institutions that act as points of reference for the pact's priority target audiences, for instance immigrants.

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