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Italy – Monti’s labour reforms hit raw nerve with unions

19 March 2012

Italian Prime Minister Mario Monti said labour market reform will be completed this week, arguing at a press conference that the new reforms “are very important structural reforms for Italy, for growth and jobs.” This comes after he last week sparked a hot debate, having announced on national Television that permanent jobs will no longer exist in the future, urging young Italians to get used to these prospects.

Unions and employers do not seem so happy about the labour reforms although Mr Monti seemed confident last week when he said he was sure that “unions will change their peculiar views” on the labour market reforms. But he also admitted that there will be tensions in the talks with the unions.

The Prime Minister is expected to meet with union representatives on Tuesday hoping to gain their support on the reforms by the end of the week, although there has been much resistance regarding his plans to increase the flexibility of the labour market.

Mr Monti has only been in his current post since November last year and has been arguing that his labour reforms will increase growth and help bring down the 9.2% unemployment rate. His plans include making a hire and fire culture more prevalent in Italy by amending Article 18 of the labour statute, which was adopted in 1970 and makes it more difficult to dismiss workers as employers are liable to re-instate those “wrongfully dismissed” while also having to pay any lost salary.

“The future of the country is at stake with this Article,” Mr Monti said on the weekend after a meeting with the head of the European Commission, Jose Manuel Barroso, who also said that labour reform in Italy was “essential” and had to be “bold and global.”

The labour reforms will also focus on increasing the number of apprentice schemes in a bid to decrease the high joblessness rate amongst young people. But opponents say that the reforms will actually drive unemployment up.  

“There is still some way to go,” said Susanna Camusso, head of Italy's biggest union, the left-leaning CGIL, which has been in favour of retaining Article 18. The leader of Italy's main business lobby Confindustria, Emma Marcegaglia, has also argued that the planned reforms are a big concern for employers who are "extremely worried" about the increase in cost of hiring employees on short-term contracts.

Despite all this criticisms, Mr Monti has indicated that he was prepared to go to Parliament without the support of the trade unions this month. 

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