Italy: Policies for employment and flexicurity

Cesare Damiano
Minister of Labour and
Social Protection

Since the government took office, it has acted, after consulting the social partners, against precarious employment and in favour of indefinite-term employment and quality of employment.

In a context in which the precarious employment rate had risen above 50 per cent for the first time, in 2005, and the unemployment rate had fallen from 11.2 to 6.8 percent between 1995 and 2006, our action was aimed to raise stable employment and improve job quality through the following provisions in the 2007 Finance Act:

• a stabilization process for around 20,000 “project workers” in call centres, granting them open-ended contracts and reclassifying them as employees over the five last years for pension purposes;
• permanent tax reductions for enterprises hiring open-ended contract workers, in order to lower the cost of open-ended employment compared to fixed-term employment, especially for women workers and workers in southern Italian Regions;
• permanent appointment of civil servants after three years of service;
• measures to combat and bring to the surface “black economy” work, in part by strengthening labour inspection;
• improvement of health and safety at work;
• setting up complementary pension schemes with the transfer of the separation allowance to a pension fund unless otherwise requested by the employee;
• raising social contributions for workers with continuous, coordinated collaboration contracts from 18 to 23 per cent, so as to improve their pension levels and extend health insurance and maternity benefit to them for the first time.

Before this, a set of laws on occupational safety was issued (the so-called Bersani Decree) which: allows labour inspectors to request the suspension of activities on a construction site when at least 20 per cent of workers are found to be irregular; introduces a “unified certificate of regular contributions”, mandatory for creating job orders and applying for tax reductions; introduces a mandatory identification document; and requests the communication of workers’ hiring information one day before they begin work. As a result of this provision, new jobs have been created in the construction sector, many of them with open-ended contracts.

Other reforms promoted by the government, with the collaboration of the social partners, aim to raise productivity and competitiveness, modernize the public administration, reshape the labour market and reshape the social welfare system. For this latter purpose, the social partners are now being consulted on how to modernize social welfare in the light of new needs and opportunities.

Within the limits of financial capacity, we intend to put young people at the centre of attention, since they are very likely to bear the burden of welfare costs for their elders. The priority is to protect employment and support workers, especially as regards social welfare, employment opportunities and lifelong learning.

From an international point of view, I outlined our labour policy during my speech to the 2006 International Labour Conference, where I expressed the full support of the Italian Government for the objective of decent work for all. “Flexicurity”, understood as a means by which to reconcile flexible work organization for enterprises with protection of fundamental rights at work for workers, has been at the centre of our speeches at the Council or the European Union and of the Italian position on major issues. As a contribution to this debate, we have called for flexicurity to be associated with an effective system of social welfare rights in order to prevent new forms of precariousness from arising and workers’ rights being consistently downgraded by unfair competition.

While discussing the European Commission’s Green Paper on modernising labour law to meet the challenges of the 21st century with social partners, we underscored the fact that, in order to meet local needs, a model of flexicurity should be autonomously negotiated and decided upon by the social partners. At the same time, this model should be backed by suitable legislation at EU level and the job transition process should be supported at national level. To this end, a set of common standards should be defined at EU level on certain aspects of working conditions, in part by resuming negotiations on specific directives (temporary employment, the European Works Council, and working time).

Another important step has been our initiative which led nine EU Labour Ministers to issue the Declaration on Enhancing Social Europe. This document has revived the debate on the social dimension of Europe, from an institutional point of view as well, including strategy on issues like employment, job quality and social welfare. It might help in revising the EU Social Agenda.