Procedural Flexibility and Procedural Security

The section draws attention to the articulation mechanisms provided by the chemical and pharmaceutical sector to enable and constrain company level negotiations on issues of flexibility and security. Table 4.4 shows which rules of procedural flexibility are provided by the sector level agreements (1998-2012) to empower company level social partners over each of the seven flexibility and security categories elaborated within the flexicurity literature (Chapter 3). The main findings are described below.

Table 4.4: Articulation mechanisms between sector and company level

Flexibility Security

Pay 1998: CL CB on PSS can exchange

the bonus for working-time reduction 2006: Temporary Derogations on Pays

2009: Company Fund (to be instituted through CL CB) to support Solidarity Pacts

PSS given through Fonchim or Faschim (fiscal benefits)

Simplification of PSS provisions for SMEs Wage – WorkTime (CL)3 Wage (CL) Wage – Functional (CL) Wage (CL) Wage (CL) Job (CL) Job (CL) Job – Combination (CL) Combination – (CL) Income (CL)

Training 2006: Derogations on Training

plans;

Temporary derogations on training 2009: The SL Guidelines

coordinating CB decentralisation contain ‘Training’ as an item for CL CB only. Functional (CL) Functional (CL) Functional (CL) Employment (CL) Employment (CL) Employment – Job (CL)

Job Classifications 2012: Multi-skilled and multi- functional employee as a way to improve productivity and

employability: Opening clauses and temporary derogations allowed

Functional (CL) Employment (CL)

Working-time 1998: Opening clause to extend (no

more than 48) and reduce weekly working-time (32-24) in areas of crisis (specifically south of Italy) to improve productivity.

2002: Open-clauses on flexi-time and shift-work

Solidarity Pact on working-time reduction

Open-clause on working-time reduction for re-engineering jobs through training Working-Time (CL) Working-Time (CL) Working-Time (CL) WorkTime–Functional (CL) Job (CL) Job- Combination (CL) Job (CL) Job- Employment (CL) """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""" 3_{(CL): Company Level}

Opening-clause on part-time work 2009: SL Guide Lines coordinating CB decentralisation contain

‘working-time’ as an item for CL CB (up for derogation as well)

2012: Opening-clauses on: a. 28.5 holiday days for shift- workers

b. Weekly working-time c. Overtime work (which loses is character of being extraordinary) Working-time is subject derogation (not below minimum agreed and in respect of ‘individual fundamental rights’) Working-Time (CL) Working-Time (CL) Working-Time (CL) Working-Time (CL) Working-Time (CL) Working-Time (CL) Combination (CL) Job – Combination (CL) Job – Combination (CL) Job – Combination (CL) Job – Combination (CL) Job – Combination (CL) Provisions for

Atypical workers 2012: Opening clauses on circumstances, restrictions on use and quotas for temporary workers. Temporary derogations from SL provisions are allowed.

External (CL) External (CL) Employment (CL) Employment (CL) Social Benefits and Entitlements

2009: CL CB of a new area so called

‘Company Social Responsibility’ including:

1.Training

2. Employment measures such as reform of seniority entitlements 3. Welfare benefits and combination security initiatives of any kind

2012: PSS4 _{given also through}

Fonchim or Faschim (fiscal benefits)

Functional (CL) Wage (CL) Wage (CL) Employment (CL) Income – Combination (CL) Combination (CL) Measures for

Employment 1998 reduce working-time in areas of Open-clause to extend and/or structural crisis (South of Italy) 2006 More flexible clauses for deploying atypical contracts in areas of crisis (South of Italy)

Solidarity pacts

1. Reducing working hours 2. Job re-engineering through training and use of part-time work 2009 Open clauses as a means to enhance income security: 1. Bipartite CL Fund to support precarious workers

2. Derogations on working-time 3. Working-time reduction through Solidarity Pacts

2012 Further CB decentralisation

towards a variety of measures:

1. Provisions for atypical workers fully delegated to CL CB

2. Possibility to postpone SL wage increases of 6 months

CL CB can modify in peius the minimum wage for entry-level workers if hired with a permanent contract (wage cannot be lower than 80% )

Temporary derogations to SL provisions of any kind through CL

CB (CNC5 _{approval no longer} needed) Working-Time (CL) External (CL) Working-Time (CL) Functional (CL) Working-Time (CL) Working-Time (CL) External (CL) Wage (CL) Wage (CL) Flexibility (CL) Job (CL) Employment (CL) Job (CL) Job (CL) Income (CL) Job (CL) Job (CL) Job (CL) Employment – Job (CL) Job – Employment (CL) """""""""""""""""""""""""""""""""""""""""""""""""""""""""""""

4_{"PPT: Profit Share Scheme}

Table 4.4 confirms that the two-tier bargaining system found in the chemical and pharmaceutical sector in Italy does indeed shape the agenda of company level actors on issues of flexibility and security. Expectation 3 is satisfied. Effective procedural rules, such as opening-clauses and derogations, are in place to govern the relationship between the sector and the company level. As a result, all the categories addressing flexibility and security at the sector level –pay, working-time, job demarcation, training, provision for atypical workers, social benefits and entitlements, and measures for employment – are, potentially, items for company level negotiations.

Thus, by delegating specific issues of flexibility and security directly to companies and allowing for temporary derogations to sectoral provisions, the sector level social partners have enlarged both the breadth and scope of company level negotiations. As a result, trade- offs between flexibility and security are also expected to occur at company level, where, within the constraints set by the sector, social actors can find their own ways towards flexibility and security strategies.

Derogation clauses have been recognised and normalised by sector level agreements since 2006. While social partners in other industries consider this arrangement to be a potential threat to the multi-employer bargaining system, in chemicals and pharmaceuticals derogations are seen as a functional tool to address unemployment. Table 4.4 shows that procedural flexibility, both in the form of opening clauses and derogations, enables all forms of flexibility and security to be negotiated at the company level. Such rules, therefore, open up company level bargaining to a greater variety – certainly more than at the sector level – of flexibility and security trade-offs. ‘Solidarity Pacts’ are one of the most common combinations of flexibility and security encouraged at the company level. This proves that derogations have been mainly conceived by social actors as a temporary measure to cope with the effects of company restructuring and times of crisis. Most of these provisions, negotiated at the sector level between 2006 and 2012, are specifically linked to the category of measures for employment. Such a result seems to suggest that company level negotiations may enhance flexibility more substantially than security, leading to unbalanced flexibility and security trade-offs (see Chapter 2). However, the analysis of sector level data only does not allow this conclusion to be drawn.

4.6 Conclusion

The first aim of this chapter was to shed light on the outcomes of collective bargaining over flexibility and security within the Italian chemical and pharmaceutical industry. The second objective was to prepare the ground for the cross-country comparison of sector level collective bargaining in Italy, Denmark, and the UK, through which the first research questions (RQ1a/b) will be addressed.

The main points being made are, first, that social partners in the chemical and pharmaceutical sector act within a system of centrally controlled decentralisation. They are embedded in a two-tier bargaining system according to which sector level competences are demarcated by confederal agreements, while it is at the sector level that modes and scope of company level negotiations are set in place.

Second, it has been demonstrated that the sector level social partners have taken advantage of the institutional resources made available by the interconfederal agreements. Their autonomy and pragmatism has allowed them to deploy collective bargaining as a means of enhancing competitiveness and overcoming statutory inefficiencies. They also set in place a mutually supportive relationship, characterised by a relatively high level of trust, which is known as the ‘chemicals and pharmaceuticals’ special relationship’. Their proactiveness, has nonetheless, interfered with the demarcation provided by the interconfederal agreements and blurred the boundaries between bargaining competences. As a result, there has been an increasing uncertainty over the actual applicability of some of the sectoral provisions at the company level.

Third, both as a result of their constant interaction and their ability to engage with collective bargaining in a strategic way – such as during the economic transition in the 90s – the social partners have developed similar understandings around issues of flexibility and security. These, have influenced the sector level agreements. Yet, the effects of legal regulations on the labour market mean, first, that, issues of security are more prominent than issues of flexibility and second, internal forms of flexibility are more prominent than external forms.

Fourth, the analysis of both documentary and interview data has also demonstrated that collective bargaining in the chemical and pharmaceutical industry leads to different flexibility and security trade-offs. These are the following:

• Training addresses functional flexibility and job security, functional flexibility and employment security, external flexibility and employment security;

• Job classification addresses functional flexibility and income security, functional flexibility and job security, functional flexibility and employment security;

• Working-time addresses working-time flexibility and combination security;

• Social benefits and entitlements address internal forms of flexibility (especially working-time flexibility) and either combination or income security, and wage flexibility and combination security;

• Measures for employment addresses external flexibility and employment security.

Fifth, it was demonstrated that sector level agreements both enable and constrain company level bargaining on issues of flexibility and security. As a result of coordinating mechanisms such as competences’ demarcation – for example the 2009 new chapter on ‘company social responsibility’ – and competences’ delegation through opening-clauses and derogations, all the relevant categories addressing flexibly and security can be included in the bargaining agenda.

Finally, given the controlling mechanisms established by the sector to govern the relationship between sector and company level bargaining, trade-offs between flexibility and security are also expected to occur at company level. The circumstances in which firms are allowed to deploy opening-clauses and derogations – for example, temporary economic difficulties, ‘solidarity pacts’, attracting investments and saving costs – seem to suggest that company level actors may be more exposed to demands for flexibility than sector level actors.

These conclusions have been drawn from a top-down analysis which allows a focus on the role of both national and sectoral bargaining institutions in addressing issues of flexibility and security. It shows that such institutions provide company level actors with a series of opportunities and resources. Nevertheless, it is not possible to explain to what extent and in what ways these opportunities have been taken up. In order to achieve this, it is fundamental

to complement the top-down perspective with a bottom-up one and to investigate how actors and institutions, in practice, behave at the company level.