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The wide gap between rhetoric and reality on the question of worker participation at company board level is never more pronounced than it is in Italy. According to article 46 of the country’s 1949 constitution it is recognised that employees have the right to take part in ‘the management of enterprises with the resources and within the limits laid down by the law.’ But that provision has not led to any such arrangements coming into existence in Italian firms in over half a century outside the cooperative sector.
Indeed, the law plays only a limited role in Italy on the issue of employee representation at boardroom level. The workers committees and other active shop-floor bodies were established through the negotiated process of collective bargaining and multi-union agreements with employers and not by the legislative route. Employer hostility or indifference on the one hand and conflicts between the unions on the other has ensured a very limited development of worker directors on company boards.
It was only in the early 1970s that the first legal rights to information and consultation were introduced and then only in the face of strong resistance from the companies. They made up only a small part of the much wider worker offensive that developed after the country’s so-called hot autumn in 1969.
It is true that the Italian government tried to interest trade unions and employer associations in developing a system of co-determination at board level on the model of West Germany. But this failed to make any progress. The adversarial approach to industrial relations was preferred to any attempt at the creation of industrial democracy. Indeed, the tradition of conflict and confrontation in Italy has ensured little advance for notions of employee representation on company boards. There are some voluntary participation systems in some firms such as the airline Alitalia and Zanussi, the white goods firm that is part of the Swedish-owned Electrolux, but these are very much the exception. In some public sector enterprises such as the postal services and ENI state holding company worker representatives were elected on to their respective management committees.
However, the reform of the public services and the privatisation drive of the 1990s in Italy have undermined these developments. The trade unions, which had already been sceptical of such participation, came to the conclusion that the presence of worker representatives on management boards in state-owned companies being moved to the private sector or undergoing restructuring was quite ineffective in influencing what happened.
It seems unlikely that any progress can be expected under the present centre-right Italian government. The country’s employer association has already expressed its opposition to the employee participation provisions contained in the European Company Statute. However, an advance may be coming in information and consultation rights for employees in small companies.
But on the other hand, trade unions appear to be changing their traditionally negative attitude to worker representation at company board level as they debate the introduction of the European company statute. It is true that the trade unions adopted a more cooperative approach to tripartite agreements with government and employers in the early 1990s. Moreover, Italy’s three main trade union federations are in agreement on developing a wide bargaining agreement that would include progress on the implementation of the new measure on employee representation at board level in European companies. On the other hand, the country’s leading employer association –
Confindustria – remains sceptical about any moves that provide for the direct representation of a company’s employees on to its board at national or European level.
source: Robert Taylor (2004) in ETUI and Hans Böckler Foundation, The European Company - Prospects for board-level representation
DOCUMENTS: - BRIEF OVERVIEW: Company law and existing legislative provision for employee participation in Italy (by A. Büggel).
(pdf)
 COUNTRY REPORT ITALY: Workers' participation at board level
(by Dario Ilossi)
prepared within the project "Prospects for participation and co-determination under the European Company Statute" - more about this project
download country report (pdf, 228 kb) download whole report (pdf, 1.3 MB)
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(3) Transposition process
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Second update on the status of SE-directive transposition in Italy (10 March 2005) by Marcello Ries
On 2 March the Italian social partners signed a Common Opinion on transposition of the SE directive and they recommend that this opinion be taken into account when transposing the directive into law.
The document was accordingly sent to the Minister of Welfare with a request for action. The social partners also express the wish to be consulted on the government's next initiatives. At present the government has several options for the transposition of the directive into law. The most probable course of action would appear to be that used for the EWC directive, where a collective agreement became law by means of government decree.
The three main trade union confederations CGIL, CISL and UIL reached an agreement on worker participation in the SE. They give precedence to the dual system, whereby employee representatives in the supervisory body will be appointed by the trade unions. If companies opt for a monistic board structure, the member of board representing employees can be an external expert who is able to represent employee interests while having the necessary skills and know-how to be an active board member.
DOCUMENTS:
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Update on the status of SE-directive transposition in Italy (January 2005) by Marcello Ries
During the week preceding Christmas 2004, the social partner delegations met to finalise a draft agreement on transposition of the SE directive.
The meeting was successful. The resulting agreement must still be subject to internal discussion and approved by all the social partner organisations. Thus it is not an official document and not available to the public. For this reason it is impossible to give a detailed overview of its contents. However, some important points are clear:
1. There will be no opt-out.
2. There is a preference for a dualistic model, with employee representation on a supervisory board.
3. There is agreement between the three major trade union confederations that employee representatives on the supervisory board (or, where that is impossible, the administrative board) shall not be elected, but jointly appointed by the trade unions.
4. Also, provisions for experts, etc., were defined in detail (in more detail than in the CBA transposing the EWC directive).
5. The social partners did not lay down any sanctions, as this is not their role (although they did recommend some).
This agreement constitutes major progress towards transposition. However, while the way forward is simple on paper, it is quite complicated in reality.
The CBA will (probably) be signed and registered by mid-February (by the end of January, according to optimists). At this point, it can be submitted to the government, which will probably enshrine it in law by decree. At this point the government will inform the European Commission and the directive will be considered officially transposed.
In any case, in Italian jurisprudence collective bargaining agreements have juridical value, as the erga omnes principle is normally applied. This means that the CBA is legally binding from the moment it enters into force, even if there is no government decree – a temporary solution that allows the government time to tackle (and possibly resolve) the contradiction between the SE regulation and directive and the recent reform of company law (the so-called Vietti reform – see Country Report on Italy). In this case, however, sanctions would not apply.
As a matter of fact Italy finds it itself in a paradoxical situation. The government must “reform the Vietti reform” if it wants to transpose the directive. On top of that, while technically all the necessary conditions are in place for transposition of the SE directive, the SE regulation still needs to be adopted.
Or will Italy find itself in a situation in which employee participation in the SE is defined, but it is impossible to establish an SE under Italian law? For some time – particularly with general elections coming up – this will probably be the case.
Download full report (pdf)
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State of the art: August 2004
The principles laid down in the directive are rather innovative in relation to the Italian legal system. While employee representation is well defined also with regard to information rights (for example, in laws 223 of 1991, 428 of 1990 and 626 of 1994), the concept of “participation” has hitherto been defined only in collective bargaining agreements or jointly established regulations. The most substantive change as regards the Italian system will be provisions regarding the composition of management or supervisory boards, in which the presence of employee representatives is envisaged.
Existing Italian company legislation excludes any form of employee participation in the governing body of a company. The administrative board, elected/appointed by the shareholders, mainly following internal regulations, governs the company. The correctness of financial management and company information must be guaranteed by a committee of auditors, whose sole aim is to audit the financial information of the company as a whole, and in the interest of the company as a whole. The auditors do not act on behalf of one group of shareholders (or stakeholders), but on behalf of their collectivity.
These legal provisions leave room for grey areas concerning corporate governance. Recently, the government has taken action to develop more stringent legislation and to fill these gaps and, at the same time, has come up with proposals concerning the introduction of employee participation rights.
Also because of the financial scandals involving major Italian companies, reform of company legislation has been accelerated, whereas the introduction of a “participatory” system is lagging behind.
According to the government, one reason for this “dual speed” approach is the difficulties experienced by the social partners in reaching a joint opinion on the matter. The government says it intends to respect the “Pact for development and employment of December 1998”, according to which it will follow the “joint opinions” of the social partners with regard to transposition of EU social directives, as was the case with the transposition of Directive 945/45 EC on European Works Councils. At present the social partners have not reached a joint opinion on Directive 2001/86 EC, so the government is proceeding with transposition of the SE regulation [1], while the SE directive remains “on hold”.
In February 2002 the government encouraged the social partners to begin negotiations, which should lead to transposition of the SE directive. The government specifically called for a “joint opinion” from the social partners which could be transposed into law, following the general agreement on social dialogue of December 1998.
The trade unions, whose approach in this matter has always been unified and proactive, after defining their joint position invited the employers’ organizations to open discussions on this matter. In February 2003, the industry confederation Confindustria accepted. This roundtable is presently engaged in discussions.
At the same time, the trade unions held informal talks with Confcommercio (the confederation of commerce, in particular wholesalers and retailers), ABI (the national association of banks) and ANIA (the national association of insurance companies) with the aim of setting up a roundtable leading to an interconfederal agreement (or “joint opinion”), signed by all the representative organisations of industry, trade and finance on one side and of employees on the other. Such an agreement could be validated by the government and consequently become a legally binding text for implementation of the directive. As described above, a similar approach was established in 1998 quite successfully and was followed for the implementation of the EWC directive. In that case, the parties reached a collective bargaining agreement which was legally binding on all its signatories as early as 1996 and was transposed into law in 2002, thus setting an example of a positive modus operandi.
However, in recent months, other issues have had priority on the government’s and the social partners’ agendas, and the general relationship between government, employers’ organisations and trade unions has deteriorated, so that little or no progress has been made.
In June 2004, during a seminar [2] organized by CESOS [3] and CISL on the subject of employee participation in the SE, the representatives of the three trade union confederations CGIL, CISL and UIL reiterated their desire to reach a joint opinion with the representative organizations of industry (Confindustria), banking (ABI), insurance (ANIA) and commerce (Confcommercio) by October 2004. This joint opinion will then be submitted to the government as a basis for the law transposing directive 2001/86 EC.
Thus the way towards transposition appears to be clear. [4] However, it appears that the social partners have different views and that there is still a long way to go before a joint opinion is reached. There appears to be unanimity on one point. On the question “what form of participation do we want?”, the representatives of the social partner organizations all agreed that they did not want a “German model”. The trade union confederations CGIL, CISL and UIL have already reached a joint position, and invited the employers’ organizations to present their proposals so that a fruitful debate can begin.
In consideration of the consensus among social partners and government that a law will be discussed following the definition of a joint opinion, debate in parliament on the transposition of Directive 2001/86 EC cannot be expected before November 2004. It is not on the agenda for the September session, when Parliament convenes after the traditional August holidays to debate, among other items, the “acquis communautaire”, which in general terms is the sum of all EU legislation to be transposed into Italian legislation.
by Marcello Ries
Download full report (pdf)
Footnotes:
[1] This is the government’s vision. The social partners take a different position according to which the government has so far failed to come up with a proposal which they could discuss with view to reaching a joint opinion. [back to text]
[2] “La società europea, la partecipazione dei lavoratori e la governance delle imprese”, Rome, 14–15 June 2004. [back to text]
[3] Centro di Studi Economici, Sociali e Sindacali, a research institute of CISL. [back to text]
[4] While there has always been a consensus that the social partners should formulate a joint opinion as a basis for the transposition law, there have been different views on how such an opinion should be reached. See note 1. [back to text]
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DOCUMENTS. - BOOK REVIEW: Bordogna L. and Guarriello F. (2003), Aver Voce in Capitolo. Società Europea e Partecipazione dei Lavoratori nell’Impresa, Roma: Ed. Lavoro
Will Italy succeed on the road to transposition of the SE Directive?
by Valeria Pulignano (University of Warwick)
At the beginning of February 2002 Cesos (Centro Studi Economici e Sindacali) organised a workshop in collaboration with CISL, one of the three main Italian trade union confederations. The workshop was a first attempt to encourage the social partners in Italy to reflect on the contents of the European Directive on the constitution of the European Company Statute (SE – 01/86) and on its implications for the Italian industrial relations system. Discussions took place amidst significant general interest in, on the one hand, the regulation of employee involvement at European and company levels, and on the other, significant social and political instability at the national level. more
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(5) Other relevant information (Info-Box)
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