Collective Bargaining

A IMF paper examines whether there is a competitiveness challenge in Italy and evaluates the framework of wage bargaining. Wages are set at the sectoral level and extended nationally. However, according to the IMF, they do not respond well to firm-specific productivity, regional disparities, or skill mismatches. Nominally rigid wages have also implied adjustment through lower profits and employment. The paper is a classical example of the IMF-reasoning that decentralisation of bargaining leads to higher employment rates.

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Following strikes last month (see our February newsletter) teachers went on two more strikes in March after failing to reach a deal with the government on higher wages. Teachers want their salaries - around 920 euro monthly for junior teachers and 1,200 euro monthly on average - to be in line with those of other public workers. After the resignation of Prime Minister Miro Cerar, the public-sector trade unions demanding higher pay are divided. The trade union of teachers will probably suspend its strike plans and wait for a new government while the group of 16 public sector unions wants the outgoing government to finish the talks.

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The government reformed the re-employment assistance system to prevent companies from abusing the system. Before the reforms, the system would compensate worker who, after being declared redundant, found a new but lower paying job to 90% of their previous earnings for a four-year period. In the new system the re-employment fund will only pay up to 50% of the salary and furthermore it will only be granted to employees aged 45 and over who have been victim of a collective redundancy or bankruptcy or who have been part of a retention plan.

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The spring round of collective bargaining started on 7 March with the negotiations for the approximately 8,000 employees of the paper industry. The electrical and electronics industry (50,000 employees) followed on 12 March. The wage negotiations in the chemical industry (45,000 employees) will start on 5 April 2018. Part of the demands of the workers in the domestic industry are an increase in minimum wages or minimum salaries, increase of actual wages and or actual salaries with special consideration of the recipients of low incomes and a legal claim to leisure option. Negotiators state that the industry is doing well and now is the time for workers to be properly involved in the success.

Read on: in German (1) … in German (2) …

The statistical office published its latest data on the labour market evolution. Labour market participation is still low and the unemployment stays at a very high level (14.7% by the end of 2017). Compared to the third quarter 2017, employment decreased in the fourth quarter by 118 300. The highest part (86%) was due to the seasonal character of the jobs in agriculture, forestry and fishery and in households producing goods and services. Unemployment increased, compared to 2016, with 1.6%.

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According to the country’s statistical office almost 14% of the workers gets paid the minimum wage or even less. Last October 51,600 workers earned 380 euro or less, of them 119,000 worked part-time. This is a strong decrease compared with the previous year when more than 20% of the Lithuanian workers earned the minimum wage or bellow. The decrease is said to be due to the country's new Labour Code, that allows paying the minimum wage only for unskilled jobs.

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After a complaint by an individual public-sector worker, the Ombudsman ruled that public sector workers are unfairly excluded from pension increases that private workers do get when they continue working during retirement. When people chose to work longer and do not apply for pension when they are entitled to, their pension will be increased by a percentage for every additional year they stay in employment. Public sector workers are denied the right to work when they have reached the retirement age; they cannot apply for this pension increase program.

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The primary school teachers continue with their strike actions for a higher salary and a lower work load. In March they organised the fourth primary school teacher strike in the past five months. The education minister stated last year that there was no extra money available. The incoming government promised primary school teachers 500 million euro to reduce workload and 270 million euro to increase salaries. The government committed in March an additional 236 million euro to reducing workload in primary education.

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Trade unions at the supermarket giant Carrefour have called a strike and warned of supermarket closures and possible goods shortages after the group announced the future loss of thousands of jobs. The unions Force Ouvrière (FO) and CFDT called the strike for 31 March, in an attempt to influence the plans for the Carrefour supermarkets, warehouses and offices. According to the unions the plans are due to ‘shareholders’ attacks on jobs and rental-management, and the ‘hold up’ on profit-sharing’.

Read on: in English … Union press release: in French …

Unions want to shorten the standard working week that at the moment is 42.5 hours a week. Inspired by the experiences in Germany and France, they want to cut the present working hours by half an hour a day without lowering salaries. The unions are optimistic about their demands since the unemployment rate in the country is the lowest in the European Union and firms lack employees.

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