In the mouth of the wolf

By Luca Failla

09 January 2013 at 16:53 BST

Italy's chaotic political environment is crippling much-needed reforms to employment law. Companies and their advisers are hoping for a quick resolution in the forthcoming elections

Italian workers face tough times

Italian workers face tough times

When Mario Monti resigned as Italy’s prime minister just before Christmas -- and just after the 2013 Stability Law and this year’s budget had passed -- he left the country entering the new year without a government. From a social-economic point of view one could easily conclude that 2013 will not be a bright year for Italy.
 Particularly worrying is the threat that reforms drafted in 2012 may remain as unfinished works, dead letters resulting from the current lack of government. This is especially true in the case of the recent labour market proposals, technically referred to as Law 92/2012 – or the ‘Fornero reforms’, named after the labour minister, which came into force last July.
With that legislation, the Monti government committed itself to drafting more detailed measures. For example, there are provisions for a regional consultation with the aim of drafting guidelines for the reform of apprenticeships and vocational training by 18 January 2013. One presumes that in the absence of a government, this is now unlikely to occur.

Welfare to employment

Therefore, with no regional legislative guidelines, national regulations will apply, meaning the rules governing apprenticeships will be stuck in the same legal position that they have been in since the late 1990s, when the country was in very different situation socially and economically. This is no way to foster the progress of the Italian labour market.
 Another important aspect of the July labour reforms is a measure to improve the system designed to move people from welfare to employment.  And again, it is doubtful that these reforms aimed at increasing employment will be implemented as anticipated.
On 6 December, Mr Monti’s labour minister, Elsa Fornero, issued a statement flagging up a forthcoming ministerial decree to lay groundwork for the creation of a more dynamic and inclusive labour market, with specific emphasis on young and older workers. For example, she highlighted a programme using fiscal incentives to encourage companies to move older workers from full to part time and to offer apprenticeships to younger workers to stimulate the overall employment market.
Two days after the announcement, Mr Monti resigned, leaving Italy without a government until the next general election – forecast for 24-25 February.

Demand and supply

There is a notable absence of legislative measures covering the identification and certification of formal legal education and training, and informal learning gained through apprenticeships or on-the-job training. This absence, which without a government may be indefinitely prolonged, is likely to frustrate the legislators who were pursuing reforms to create more transparency and responsiveness between demand and supply in the Italian labour force.
The Fornero reforms also gave the Italian government the power to adopt by 18 April one or more legislative decrees promoting an ‘organic and systematic way’ of informing and consulting workers. Within this timeframe it was also envisaged that regulations fostering ‘forms of employee involvement in a company’ -- such as participation in company profits and capital – would be activated through collective company contracts.
With a challenging economic climate both nationally and internationally, Italy’s future is uncertain. With luck, the political transition, which unfolds in the coming weeks, will happen quickly. More importantly, it is hoped that a fresh administration taking Italy forward into 2013 will not cancel or stifle recent progress made in reforming the country’s labour market. The foundations laid are not only long overdue – they are only the beginning of an evolving modernisation.

Crisis of youth

Italian unemployment figures for November 2012 stood at slightly more than 11 per cent, with youth unemployment looking truly grim at 37 per cent. Italians have an interesting way of saying good luck – In Bocca al Lupo, which means ‘in the mouth of the wolf’. The reply is always Crepi – or ‘May the wolf die’.
Italy currently appears to be in the mouth of the wolf. Let’s hope that the new administration can kill it quickly.


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