Bloomberg News

Italian Labor Talks Now Focused on Jobless Benefits, Unions Say

February 15, 2012

(For more on Europe’s debt crisis, see {EXT4 <GO>}.)

Feb. 15 (Bloomberg) -- Negotiations aimed at overhauling Italian labor laws are currently focusing on expanding unemployment benefits, and talks on firing rules will be put off until other issues are worked out, union leaders said.

“The government ensured us that the overhaul will include tools to extend protection to all those who are fired,” Raffaele Bonanni, head of the CISL union, said after meeting with Labor Minister Elsa Fornero in Rome today.

Many Italian workers receive limited or no unemployment benefits when they lose their jobs, while employees of larger companies, who enjoy the most job security to begin with, can often get support from special funds set up to subsidize temporary layoffs.

“Flexibility can only be achieved if it’s matched by forms of social protection to be applied to all -- that’s the real black hole at the present,” said Susanna Camusso, head of CGIL, the country’s largest labor group.

Prime Minister Mario Monti has pledged to complete an overhaul of the country’s labor laws by the end of March as part of his efforts to spur growth by making the economy more competitive. Monti has pledged measures to reduce an 8.6 percent jobless rate by giving companies more incentives to hire.

Article 18

Union leaders said today that the discussion of firing rules on Article 18 of the labor code, the thorniest part of the talks, will come at the end of negotiations when other issues have been resolved. The talks will be wrapped up by early March, Emma Marcegaglia, head of employers’ lobby Confindustria, said at a news conference in Rome today.

Article 18 bans firing without just cause and forces employers to rehire and compensate workers deemed unjustly released. Employers say it discourages hiring because it makes it hard to reduce staff during tough economic times, while unions oppose any attempt to weaken the law.

“We know that in the end the government wants to intervene on this issue,” Bonanni said. “I hope that the social partners will be up to that challenge, otherwise the government will act on its own.”

--Editors: Jeffrey Donovan, Andrew Davis

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.ne


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