The chemical and the pharmaceutical sector is the only industry in which reform of the 1993 Protocol – and its resulting institutional developments – have led to neither innovations nor disruptions in social dialogue activities. This is a clear sign that, despite having to act within
the limits set at the intersectoral level, the social partners in the chemical and pharmaceutical industry have benefitted from a significant amount of autonomy from the respective confederal organisations.
In 2006, three years ahead of the FARCB, the social partners signed an agreement called ‘Guidelines for company level negotiations and derogations of national provisions’. On the side of the employers the organisations involved are the National Federation of the Chemical Industry (Federchimica) and the National Pharmaceutical Industry Federation (Farmindustria), which have always shared the same negotiating table and signed the same agreements. Given the link between pharmaceuticals and the NHS, and their resulting specificities, the sector has traditionally voiced employers’ interests through the involvement of both associations. On the side of the unions, the three most representative sectoral organisations are: 1) the Italian Chemicals, Energy and Manufacturing Workers’ Federation (Filctem-Cgil); 2) the Energy, Chemicals and Allied Industries Federation (Femca-Cisl); and 3) the Energy and Manufacturing workers’ Union (Uilcem-Uil).
Despite the fact that traditional political affiliations are still important at the confederal level, within the chemical and the pharmaceutical sector, employers and trade union organisations have historically shown a distinctive level of pragmatism (Colombo and Regalia 2014). The social partners believe that it is thanks to such pragmatism that they were able to introduce some pioneering solutions, re-shaping not only industrial relations in the sector, but also the Italian bargaining system as a whole (Burroni and Pedaci 2011). As set out in the introduction to the 2006 sectoral agreement, the social partners’ objectives have been:
To modernise the national collective labour agreement and enhance company level bargaining’[in order to make these instruments] ‘more appropriate to the new needs of enterprises and workers, and to support organisational changes, to strengthen the competitiveness of companies’ [and]‘to increase employment (Burroni and Pedaci, 2011:5).
Moreover, in contrast to the 2009 confederal agreement, the guidelines negotiated within the chemical and pharmaceutical sector provided a strict regulation of opening-clauses and derogations, as well as a variety of mechanisms that preserve the hierarchy between the different bargaining levels. The empirical material used for this thesis shows that none of the social partners advocated a transformation of the two-tier bargaining system or promoted a
model of disorganised decentralisation. In doing so, they took full advantage of the autonomy provided by the institutional framework in which they are embedded. In particular, the content of the sector level agreements confirms their distinctive use of the ‘participative model’ to find a compromise between issues of competitiveness and employability. In this regard, some of the most relevant provisions are:
1. Derogations to sector level agreements are valid only in two limited cases: first, if companies face temporary economic difficulties and any deviation from the sector level agreement can save or consolidate employment; and second, even where companies are not in a critical situation, if they are, nevertheless, likely to benefit from a temporary derogation in order to attract investments and/or save and/or
consolidate and/or grow the overall business performance and levels of employment. 2. Company level derogations are allowed to modify a variety of norms regulating
working conditions. These can involve any element of fixed and variable pay – except for minimum wage rates which remain an exclusive prerogative of sector level negotiators – for example, seniority pay increases, severance payments, performance- related pay, bonuses, shift work allowances, and overtime. Moreover, according to the 2006 agreement, any deviation to sector level terms and conditions had to be approved by the National Bargaining Committee. This provision, however, was lightened in 2009 by excluding working-time flexibility from the authorisation procedures and, finally, abolished with the 2012 renewal.
3. Derogations can only be temporary and linked to the specific situation/objective for which they have been negotiated. The 2012 agreement reduces the temporal limit from 4 to 3 years and confirms the derogative break previously introduced (2006- 2009): three months before a sector level renewal derogations are seen as ‘inappropriate’.
In other words, the innovative drive characterising industrial relations in the chemical- pharmaceutical sector allowed employers to drip-feed the flexibility they needed to face increasing market competition. At the same time, it helped unions to increase their involvement in the sector’s strategic choices and to save jobs in times of economic difficulties.
However, in the chemical and pharmaceutical industry, as in other sectors, there is a discrepancy in collective bargaining coverage between the sector and the company level (Colombo and Regalia, 2014; Femca-Cisl, 2014). Although there is no official information on the percentage of bargaining coverage, the interviews with the sector level representatives – both employers’ and employees’ sides – indicate that such a coverage reaches about 70-75 percent at sector level, yet at firm level it stands below 35 percent. This gap seems to reflect the average of the latest official data for manufacturing: 80 per cent coverage for sector level bargaining (Pedersini, 2014); whereas coverage is 45 per cent (Bank of Italy figures) and 25 per cent (according to trade union sources) at company level (Burroni and Pedaci, 2011; Banca d’Italia, 2006). This lack of depth of the collective bargaining system (Clegg, 1976) is perceived by the unions in the chemical and pharmaceutical sector as a threat to the ‘participative’ approach to decentralisation. In particular, they believe that this is likely to reduce shop stewards’ bargaining power as well as their actual capability to engage with the competences that have been delegated.
Derogation clauses are a very delicate matter. We [Uilcem-Uil] have been harshly criticised for it and, partially, this is understandable. The level of union representation at the company level is relatively low. If the relationship between employers and employees at the company level is not good; if there is no trust, companies could seriously take advantage of the situation to worsen employees’ conditions.
Sectoral Secretary Uilcem-Uil, February, 2013
Companies implement changes within very strict time limits. Shop stewards complain that their requests are most of the times ignored, and want us [sector level representatives] to intervene - which we often do - to re-open the discussion, so that management can re-consider their conditions.
Sectoral secretary Filctem-Cgil, December, 2012 In addition, the proactiveness of sector level social partners in re-defining bargaining competences and widening the extent of decentralisation might have had a double-edged effect. On the one hand, it has certainly helped to reinforce the role of collective bargaining in the sector and fostered a climate of collaborative industrial relations. On the other hand, by competing with the confederal level on a normative ground, the boundaries between bargaining competences have become more blurred. As a result, the conflict of interests
between the confederal and the sectoral level has increased and ideological distances within unions have widened – especially within Cgil.
‘Contrary to the indications of Cgil, in this sector [chemical and pharmaceutical] we
[Filctem-Cgil] are keen to strengthen the role of company level negotiations. The last renewal was a particularly difficult experience in Cgil, there was a clear incompatibility between the objectives of the general secretary [of the sector] and the objectives of the confederal secretary, especially, with regard to the extent of applicability of the derogation clause on young employees’ [unlimited, according to the 2012 agreement]. ‘We cannot forget that our provisions [sector level] are universally binding and, if tomorrow there is a problem, the judge will need to decide which norm applies [confederal or sectoral]. If an issue of normative ambiguity is raised [between the confederal and the sectoral normative] it will represent a defeat for both levels.
Sectoral secretary Filctem-Cgil, December, 2012 Finally, with regard to their relationship, the sector level social partners describe it as a mutual interdependency, suggesting that such a relationship developed around two particular sector features. The first one is social dialogue on health and safety issues which represents a cornerstone of the chemical and pharmaceutical sector all across Europe. In contrast, the second feature can only be understood within the economic and political context in which the Italian chemical and pharmaceutical sector lies. Starting from the late 80s the chemical industry – to a larger extent than the pharmaceutical industry– has gone through the privatisation of state-owned companies and resources. The rising prices of raw materials and the contraction of the domestic market has led to a reconsideration of product portfolios. Thus, in order to focus on greater innovative content and added-value, many important business functions have been externalised and outsourced. In some cases, manufacturing plants have been closed altogether causing massive unemployment in the sector. By engaging in collective bargaining, the social partners not only set the conditions necessary to deal with the economic transition of the 90s, but also offered companies the economic and normative stability to face more recent challenges. Indeed, the Italian tendency to overly regulate both economic and labour fields – and its resulting bureaucracy – have required actors to find their own ways to sustain companies in a highly competitive global market, where efficiency and productivity levels are constantly subject to benchmarking operations. As a result, the social partners in the chemical and pharmaceutical sector have developed what it is described as a
For the past year we have tried to elaborate and explain why our sector is characterised by such a good relationship, able to survive many different and difficult historical moments. We would like [to think] that this special relationship has become a patrimony for our industry.
Sectoral secretary Filctem-Cgil,December, 2012.
There is a very good relationship between us [employers and employees’ representatives]. It has always been the same for many years and we want it to be the same. We are actively working on keeping it alive by creating a school of industrial relations through which to train our HR people and shop stewards. We rely on each other’s credibility. We need to, because this allows us to do many things
Central Director of Industrial Relations Federchimica, March 2013. A summary of the distinguishing features of the chemical and pharmaceutical sector is
provided below.
Table 4.2: Collective Bargaining Arrangements in the Chemical and Pharmaceutical Sector
Italy Chemical and Pharmaceutical Sector
Collective Bargaining Decentralisation
Organised decentralisation Open & Derogation clauses
Articulation Mechanisms Delegation (primarily):
1. Sector-level Agreements
2. Potential overlapping between confederal and sector level
3. High cooperation between sector and company-level actors
Union density
1. Sector-level: 70% (no official data exist)
2. Company-level: 35% (no official data exist)
Employers-Union Relationship Cooperative – low level of ideological/political conflict – pragmatic Autonomy of Sector-Level Actors
from the Confederal-Level
Medium Autonomy