This document summarizes research on collective bargaining and measures to promote productivity and corporate welfare growth in Italy. It finds that while decentralized bargaining at the company/territorial level was intended to link wages and productivity, this second level of bargaining remains limited. Recent government incentives have increased tax benefits for firms that offer services like education, elder care, and gym memberships to employees. However, only a small percentage of firms utilize these corporate welfare programs or profit sharing with workers. The policies risk exacerbating productivity differences between northern and southern Italian regions if not accompanied by broader industrial development policies. The researchers recommend improving appeals of welfare/participation policies and integrating decentralized bargaining policies with local development strategies.

1. DECENTRALIZED BARGAINING AND MEASURES FOR PRODUCTIVITY
AND CORPORATE WELFARE GROWTH IN ITALY
INDUSTRIAL RELATIONS IN EUROPE CONFERENCE (IREC) 2018
Sustainable labor markets:
social welfare and protec6on, working condi6ons, job quality and work-life balance
KU LEUVEN – CENTRE FOR SOCIOLOGICAL RESEARCH & INSTITUTE FOR LABOUR LAW
10-12 SEPTEMBER 2018, KU Leuven – College De Valk, Tiensestraat 41 - 3000 LEUVEN, BELGIUM
- Empirical evidence from administraSve data -
Achille Palio+a & Massimo Resce

2. Ac?vi?es carried out under the Na?onal Opera?onal Programme
for the implementa?on of the European Social Fund (ESF) “SPAO”

3. 1. Collec?ve bargaining and labor produc?vity in Italy
2. Measures for dissemina?on of two-?er bargaining
3. Conclusions: some policy recommenda?ons
Bibliography
INDEX
The INAPP cannot be held responsible for errors or any consequences
arising from the use of informa6on contained in this paper.
The views and opinions expressed are solely those of the authors and do
not necessarily reflect those of the Ins6tute.

4. COLLECTIVE BARGAINING AND LABOUR PRODUCTIVITY IN ITALY
Features of collective bargaining in Italy
4
The Italian model of collecSve bargaining involves two levels
First level Second level
NaSonal CollecSve Labor Bargaining
(CCNL)
Decentralized bargaining
(Company or territorial level agreements)
minimum wage
link between pay and prices
others issues:
- working Sme;
- work organizaSon;
- disciplinary disposiSons;
- etc.
performance related pay (PRP)
other issues:
- corporate welfare;
- company parScipaSon;
- rent-sharing formulas;
- benefits;
- work life balance;
- etc.

5. 5
A large number of countries adopted in the 1990s two-Ser
bargaining structures or extended the scope of the exisSng
ones.
Although the history and design of these structures differ
considerably from country to country, a common factor
behind these developments was the search for an organized
or controlled decentralizaSon of collecSve bargaining, in
which the so-called social partners, rather than moving from
fully centralized to fully decentralized structures, opted for
an intermediate soluSon.
In Italy the «Protocol» of 23 July 1993 expressly opened to
forms of «decentralized bargaining».
One of the aims was to sSmulate producSvity growth in the
second level of bargaining, by linking wages dynamics to
producSvity.
This padern sSll today is hard to catch on.
According to many, the lack of rooSng and the
malfuncSoning of this second level of bargaining is one of
the reasons for the lack of growth in labour producSvity in
Italy.
The Protocol of 23 July 1993 and the two-tier bargaining
COLLECTIVE BARGAINING AND LABOUR PRODUCTIVITY IN ITALY

6. The Italian labour productivity slowdown
6
The problem of produc?vity growth is a structural aspect of our economy.
In fact, since the post-war years up to the '70s, produc?vity growth in Italy has been more sustained than the European
average, whereas from the 1990s to the present day it has collapsed compared to other European States.
ES11 - Defini?on
The entry into the euro area was progressive and did not occur for all countries at the same 6me. Therefore the
first 11 countries entered between 1999 and 2002 were taken into considera6on as Euro-System: Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
COLLECTIVE BARGAINING AND LABOUR PRODUCTIVITY IN ITALY

7. MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING
The opportunities offered by two-tier bargaining
7
Decentralized bargaining remains the level where condiSons for a beder company-workers
relaSonship can be made, which indirectly could result in increased labor producSvity.
Corporate Welfare
Work-life balance
Benefits
Par?cipa?on
The soluSons that can be developed in the second
level are many: from corporate welfare, to company
parScipaSon, to rent-sharing formulas, to
producSvity bonuses on accessory wages, to
performance-related pay, etc.
In recent years, the
Government has put in
p l a c e a p a c k a g e o f
incenSves aimed at rooSng
the two-Ser bargaining in
the firms, providing for a
tax benefits regime for an
ever-wider basket of
services (scholarships for
the children of employees,
assistance to elderly
relaSves, baby-sifng or
gym voucher, etc.).
Produc?vity

8. The new incentive measures for decentralized bargaining
8MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING
Taxa?on
period
Amount limit for tax benefits Income limits
2016 2,000/2,500* € 2015 income not exceeding 50,000 €
2017 3,000/4,000* €
2016 income not exceeding 80,000 €
*:companies that involve workers in the organiza6on of work
PRP 5 goals
produc?vity profitability efficiency quality innova?on
workers par?cipa?on corporate welfare
Other goals
2016/2017
Since 2008 the Italian law has expected forms of variable wage tax reducSon.
StarSng from 2016, aher an experimental phase, the measure was reacSvated
making important changes compared to the past.

9. Applications distribution
9
82%
18%
Firm level Territorial level
Applica?ons
23,063
Recipients/Beneficiaries
Average Total
215 4,948,813
Value of the bonus
Total Average
6,354,528,956 € 1,284 €
Firm level 18,897
Territorial level 4,166
MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING

10. Applications distribution
10
3,045
2,031
3,345
2,648
3,498
4,330
No answer
Up to 15
employees
From 16 to 49
From 50 to 99
From 100 to
249
250 and over
Firms’ size
562
1,757
823
371 294
359
No answer
Up to 15
employees
From 16 to 49
From 50 to 99
From 100 to
249
250 and over
Firms’ size
Firm level
Territorial level
2,341
91
9,893
288
6,284
No answer
Agriculture
Industry strictly
speaking
Construc?on
Services
Sector of economic ac?vity
MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING
406
55
895
445
2,365
No answer
Agriculture
Industry strictly
speaking
Construc?on
Services
Sector of economic ac?vity
8,146
6,157
3,103
1,491
North-West
North-East
Centre
South and
Islands
Geographical district
989
2,331
639
207
North-West
North-East
Centre
South and
Islands
Geographical district

11. Welfare measures and Workers’ proFit sharing
11
3,6 0,8
95,7
Workers’ profit-sharing
13,13
6,00
80,87
Welfare measures
no answer
Yes
No
MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING
Only 13% acSvated corporate welfare measures.
Access to welfare services sSll seems to represent a
problem.
When considering corporate welfare programs, firms' size
sSll makes the difference.
Access modaliSes could be solved by creaSng a network
among the interested firms.
This could be easier between firms of the same industrial
district or by joining private groups specialized in a sector,
which have already set up and offer on the market a
plamorm of services at an acceptable price.
In all these cases, however, such services plamorms would
be sustainable only with high scale volumes.
Even less are the pracSces of Workers’ profit-sharing:
almost 4%
Unlike corporate welfare, the theme of profit-sharing
does not occupy a relevant posiSon in the public opinion
and in that of the experts of the sector.
This is very well reflected in the data, where it does not
even reach 1% among firms that registered local-level
agreements.
The lack of interest toward this aspect certainly
consStutes a missed opportunity.
It sSll an important theme that could really develop in the
upcoming future.

12. First effects of politics: the risk of a territorial dualism
12
The impact of this policy sSll remains to be assessed but it is clear from the first deposits that there is a
greater acSvaSon by the regions of the Center-North compared to those of the South.
This condiSon could accentuaSng the territorial dualism, which characterizes the growth of producSvity in
the Italian regions, if the system is not integrated by other policies that take into account the regional
differences.
Labour produc?vity in the manufacturing sector
Corporate bargaining incidence by Region
MEASURES FOR DISSEMINATION OF TWO-TIER BARGAINING

13. Key Findings
13
Pros (+) Cons (-)
AdenSon of the policy maker on the importance
of decentralized bargaining.
Second-level bargaining is not broadly used.
Bargaining at firm or territorial level remains
limited.
IncenSve policy for the diffusion of decentralized
bargaining.
The use of corporate welfare programs is limited
even if the growth trend is posiSve. On the other
hand, workers' parScipaSon pracSces are sSll very
marginal.
Tax wedge reducSon.
In theory, two-Ser wage bargaining structures
could reconcile macroeconomic stability with a
closer link between producSvity and pay. This did
not happen in fact.
It is sSll early to evaluate this policy but if it should
work, it could generate polarizaSons of
producSvity gains between territories and
between types of companies (by size and sector).
CONCLUSIONS: SOME POLICY RECOMMENDATIONS

14. Some policy recommendations
14CONCLUSIONS: SOME POLICY RECOMMENDATIONS
The industrial relaSons system
should guarantee programmed
levels of producSvity gains.
The industrial relaSons system
should ensure closer coordinaSon
between the two levels of
bargaining to ensure the
responsiveness of wages to local
economic condiSons.
Policies for the disseminaSon of
corporate welfare programs and
workers' parScipaSon pracSces
should improve their appeal.
Policies for the diffusion of
decentralized bargaining and
producSvity growth should be
integrated with broader industrial
and local development policies.
Policies Industrial rela?ons

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18. Achille Paliotta – a.paliotta@inapp.org | Massimo Resce – m.resce@inapp.org