The Impact of Austerity and Labour Law Reforms: The cases of Spain

Italy and Greece.

I. Austerity measures and labour laws reforms in Spain: a new

standard?

Adoración Guamán, Raúl Lorente1

1. Austerity measures and labour laws reforms in Spain: an introduction

The economic and sovereign debt crisis is having a particularly strong impact on Spain and its labour market. In comparison with other EU countries, Spain has lost more jobs, more rapidly, than other European economies, more than 3.5 million since the beginning of the crisis. The dramatic increase of the unemployment rate has been used by the government and by the European Institutions as an argument for wide spreading the idea that labour law, including labour rights as the protection against dismissal, employment stability or the minimum wages and collective bargaining, is one of the main causes of such a dramatic loss of jobs in Spain. As it is happening in other European countries, since the beginning of the crises the Spanish Government has taken a large amount of measures including amendments to labour and social security regulations. The majority of these reforms have been done following the country-specific recommendations done by the Commission and the Council and the different National Reform Programs that are approved each year by the Spanish Government as the new system of EU economic governance establishes (Guamán, Noguera, 2015a)2.

Among other measures, the Government has approved or promoted new types of temporary labour contracts; more facilities for the employers to hire part-time workers; creation of a new open-ended contract to promote entrepreneurship with a one-year trial period; reduction of the rights of young workers employed by training contracts; creation of a new fix term contract for young workers without any other aim or justification more than being under 30 and without employment.

2. Evolution of the labour market in Spain: unemployment and temporality as trends

The evolution of Spanish labour laws since 1984 to nowadays has been marked by a clear trend towards precariousness. We could identified five stages each one started by a deep labour law reform: from 1980 to 1984; from 1984 to 1994; from 1994 to

1 Labour law and sociology associate professors at the University of Valencia2 http://ec.europa.eu/europe2020/making-it-happen/country-specific-recommendations

/index_en.htm

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1997; from 1997 to 2009; from 2009 to 2012; from 2012 till today. Thus, focusing on the last two decades there are two clearly defined periods.

The first one is linked to the way out of the previous crisis circa the late 1994, and it extends itself until 2007, with the irruption of a new systemic crisis. This period is characterized by a phase of strong economic growth and of intense job creation.

During these years, the employed population in our country increases in approximately 8.5 million people. These data are very relevant, even though it is true that this shocking increase in employment and strong economic growth has some serious unbalances that are in the foundation of the differential effect that the international capitalist crisis is having on Spain. During this first period, most of the problems that cause Spain to bear nowadays one of the worst results in employment in the whole of the EU began: an unbalanced growth model and with an oversize of certain economic sectors - particularly, the construction sector - and an underdevelopment of others - such as industry and the more advanced services linked to it.

A serious economic crisis and an even more intense employment destruction process characterize the second period, from 2007 to the late 2014. Since the very beginnings of 2008 until 2014, there is a net destruction of almost 3.7 million jobs, representing a 17.8% of total jobs in the country. Of them, 585,300 correspond to self-employed workers (16.3%) and 3,080,600 to salaried workers (18.1%), so the crisis affects both groups pretty evenly. The increase in unemployment had a renewed intensity since 2011, as a consequence of the deepening in policies of adjustment, and since 2012, by the effects of the labour reform applied through law 3/2012 that contributed to employment destruction (Rocha y Aragón 2012: p.83).

Already in 2014, the effect of the "labour policies of precariousness" undertaken since the beginning of the economic crisis and especially since 2012 until currently, have allowed for a weak employment creation, which has been basically temporary and male. Another remarkable factor is the fact that the slight reduction in unemployment that has happened during last months has been more intense amongst immigrant workers than amongst Spanish ones (2,5 percentile points against 1,4) and also amongst the most unprotected immigrant workers (from Latin America and the rest of the world) than amongst the best positioned (EU), which can give us some hints regarding the kind of recovery that has been happening.

Together with unemployment the other factor that characterizes the Spanish labour market is that of temporality. The high rate of temporality in the Spanish economy constitutes a unique feature in the European context.

The temporary employment rate (percentage of employees with a temporary contract with regard to the total of employees) risen from 15.6 per cent in 1987 to 32.3 % in 1991 (a third of the wage-earning population). This was the normal level during the following 15 years, while periods of strong economic growth in the late 80s, and the end of the 90 and the first half of 2000, have been characterized by a strong growth of temporality and by the maintenance of this in very high level. Thus, the creation of employment in Spain produced during these periods has been, therefore, very high in

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terms of volume but also linked to fix term contracts (Cordova, 1986; Standing, 1988).The average of temporary workers started its drop at the beginning of the last

economic crisis. Since 2007 the destruction of employment has been affected especially temporary workers, which were the first expelled from the labour market. This situation produced the effect of scissor marked by the reduction in the rate of temporality and the increase in the rate of unemployment

3. Economic crisis and labour law reforms: a permanent change towards a precarious employment society

A majority of the several Labour reforms undertaken in our country in the last three decades have been addressed, at least in their formal justification, to the correction or attempt to remedy these two main problems: unemployment and temporary. In order to achieve the first goal subsequent reforms have increased “flexibility” in order to reduce the so called "rigidity" of the Spanish labour market that in the point of view of some economist and employers made it more difficult the job creation3, under the assumption that there was a need for more flexible employment to be able to generate it. Among the measures towards flexible labour regulation atypical (fix-term) labour contracts occupied a relevant place. Deregulation of dismissal, encouragement of part time work by facilitating it use for employers, priority of enterprise collective agreements against sectorial ones, rise of the employer’s power to modify labour conditions at the enterprise and so on.

Since 2008, different two governments have undertaken several labour law reforms. Mostly every one of these reforms is related with austerity measures resulting from the EU, starting in mid-2009, as a result of the austerity measures and the commitments between Spain and the euro-zone. As said above, we can distinguish two phases, related to enforcement of the Country Specific Recommendations of the European Commission and the Council: the first stage, between 2009 and 2012, with an important turning point in 2011 and a second phase, from 2012 to today.

In December 2009 the socialist government approved the "Strategy for sustainable economy" with the goal to perform 20 major "modernizing" reforms in the labour, environmental, economic and financial area. The measures taken were, firstly, wage cuts in the public sector by RDL 8/2010 as: reduction of the public sector wage bill by 5 percent in annual terms, apply both to the basic remuneration and on the complementary nature and in all administrations (please note that the number of employees in the public sector represented a 13% of the workforce); suspension of the revaluation of public pensions for 2011

The adoption of RDL 8/2010 provoked three types of reaction, on the one hand, the general strike in the public service of June 8, 2010; on the other, an action of unconstitutionality against the law and, thirdly, a complaint before the Committee on

3 The alleged rigidness of the Spanish labour market has been refuted by, amongst others, the following authors (Recio (2002), Sola (2013), and Lorente, Pitxer and Sánchez (2013))

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Freedom of Association of the International Labour Organization, for violation of the rights enshrined in the Conventions on freedom of association and collective bargaining (Conventions 87, 98, 151 and 154) (Guamán, 2015.b)4.

A few months later the Socialist government undertook a mayor labour legislation reform (Decree-Law 10/2010 and Law 35/2010), affecting both flexibility and dismissal. Some months later, in august, the Parliament approved, by and agreement between the ruling socialists (PSOE) and the main opposition party (conservative PP) a Constitutional Reform. This reform introduced a debt limit in the Constitution as well as the priority for payments of interest of public debt over any expenditure. Moreover, during the same month, another labour law reform was passed, relating young employment and modifying training contracts (RDL 10/2011).

During their last months in the Government, Socialists accepted another recommendation, related to pensions. Recommendation by the Council of October 12, 2011, suggested both the delay in the retirement age and the increase of the number of years needed to claim retirement pension, together with a reform of the formula used to calculate the its amount taking into account the increase in life expectancy. This same recommendation urged the adoption and application of a global reform of the process of collective bargaining and the system of annual indexation to give companies the necessary flexibility in order to internally adapt their employment conditions to the changes in the economic environment. The Law 27/2011 of August, 1, on updating, adequacy and modernization of the social security system undertook a great deal of the reform of pensions that was demanded; for its part, the Royal Decree-law 7/2011, of June 10, of urgent measures to reform collective bargaining, opened the way for a decentralization or "descent to a company level" of collective bargaining that would be complete with the 2012 reform.

Spain went into recession again in the last three-month period of 2011. According to the European Commission analysis, this situation was the result of the decay within the labour market. In this moment, and after general elections in November 2011 when the Socialist Party lost the Government, a set of reforms, linked to the economic crisis and aimed to stop the continuous unemployment rise have been approved. This set "labour policies of precarisation", have had as a common denominator the devaluation of the labour and stability factors within employment or employment conditions, together with the reduction of social protection rights.

Regarding the private sector, reform 2012 (Decree- Law 3/2012 and Law 3/2012) and the following ones have modified both hiring and internal flexibility, dismissals and collective bargaining. Its main aim has been to reduce labour cost, by reducing wages and hiring and dismissal cost for employers5. It should be noted that, against the opinion of many authors, the Constitutional Court has considered these

4 Case No 2918 (Spain) - Complaint date;  Report No 368, June 2013: 17-nov-11, http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:50002:0::NO::P50002_COMPLAINT_TEXT_ID:3128154

5 About this reform and the followings, from a critical point of view, vid. Casas, Rodríguez-Piñero, Valdés, 2012 and 2013; Guamán, Illueca, 2012; Molina, 2012; Valdés, 2013;

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reforms compatibles with the Spanish constitution (vid. Resolutions 119/2014 y 8/2015)6

Regarding the public sector, the RDL 20/2012 followed the Council's Recommendation: public deficit should stay below the reference value of 3% of the GDP in 2014, and Spanish authorities should enforce the cuts adopted in the 2012 budget and the rebalancing plans of Autonomous Communities. In order to reach these objectives the Council established the time limit of three months in order for the Spanish Government to adopt effective measures and to transmit a detailed report on the planned reorganization in order to achieve the objectives. RDL 20/2012 had three types of measures: those regarding public administrations and the reduction of expenses in their staff; those regarding social security; measures regarding employment and measures reforming the attention to dependency system. Moreover, RDL 20/2012 froze the Public Employment Offer for 2012, 2013 and 2014, imposing a staff replacement rate of zero on a general basis, and of 10% for those public services deemed essential (Molina, 2012).

Years 2013 and 2014 consolidated the reformist path towards precarisation. On April 10 2013, the Commission pointed out that the necessary corrections were of such a scope that it was essential to have "a decided action in public policies within the services and goods markets, the labour market, the financial sector and public finances". This month, Spain presented its National Reform Program of 2013 and its Stability Program for the 2012-2016 period, which included both the reform of pensions, integrating the sustainability factor, together with the revision of the 2012 labour reform and the promotion of a "Spanish Economy De-indexing law" in order to moderate wages and prices.

Several structural reforms, many of them with regards to labour matters, were passed to apply these Recommendations throughout 2013. These reforms began with RDL 4/2013 on February 22 (Law 11/2013 on July 26) which oriented itself towards employment promotion through measures fostering the reduction of social security contributions in precarious contract types, basically targeting the incorporation of young unemployed people to the labour market, as well as a series of reforms in social security matters, all of them targeting the application of the "Entrepreneurship and Young Employment Strategy", launched by the government for the three-year period 2013-2016 on February 20137. Other adopted measures with serious consequences were

6 Vid., amongst others, the following authors Molina, C. (2014); Guamán (2015.b).7 Royal Decree-Law 11/2013, of August 2, to protect part-time workers and other urgent

measures within the economic and social order (which would later become Law 1/2014 of February 28); Royal Decree-law 16/2013 of December 20 (promoting the part-time contracts, either of fixed or indefinite duration, the precarisation of training contracts, the suppression of action by the Salary Guarantee Fund); RDL 3/2014 of February 28 of urgent measures to promote employment and indefinite contracts that included what became known as the "flat rate". Royal Decree-law 8/2014, of July 4, of urgent measures for growth, competitiveness and efficiency, turned into law on the 10 of the same month, a jack of all trades law that modified a broad and different array of laws on very diverse matters. Regarding labour matters, the RDL was focused on the development of a National Young Guarantee System to use the 1.88 billions of Euros that the European Union had granted to the Spanish State. The law traced the design of the National Young Guarantee System, which had as its main objective that

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oriented towards the reduction in spending within the pension system, with RDL 5/2013 of March 15 and Law 23/2013 of December 23.

4. Regulatory changes related to extension of precariousness

Among the measures undertaken by the Government the followings are specially related to forms of precariousness aforementioned:

- Creation of a new type of contract, the “contract supporting entrepreneurs”, regulated in article 4, Law 3/2012 with a one-year trial period of and tax and social security discounts. Despite the criticism of international bodies as ILO committees and the European Committee of social rights, the Spanish Constitutional Court has consider that the reform is fully compatible with the Constitution (STC 8/2015)8

- Regarding temporary contracts, it should be stated that the 2010 reform introduced some instrument for limiting the abuse of this kind of hiring. However, reduction of temporality has been more related to the employment crisis than to this measures. Furthermore, since 2012 any measure aimed at this goal has been approve, on the contrary, new temporary contracts for young people have been created as the "first young employment contract" regulated by article 12 of Law 11/2013 or the part-time contract linked to training, regulated in article 9 of the same law9.

- Training contracts have also been on of the targets of this permanent labour law reform. Both the trainee and in the training and apprenticeship contracts have been reformed since 2012 and turned into paths towards job placement for low-wage young people, with a maximum duration of three years, and with the possibility of follow-up between the different contract types, with the opportunity to develop more than a training contract in the same company if they are oriented towards different trainings, and from RDL 4/2013 and 16/2014, with the door open to Temporary Employment Companies to formalize them10.

- Part time contracts have been also modified in order to promote its using by employers. Part-time work regulation (later modified by RDL 4/2013 and by

young unemployed people which were not integrated in the educational or training systems and were older than 16 but younger than 25 or 30 in the case of people with a degree of disability equal or higher than 33%, could receive an employment, continuous training, apprenticeship training or traineeship offer after finishing their formal education period or after becoming unemployed. As specific measures they established: a monthly bonus on the social security contribution by the company of 300 Euros, during a maximum of 6 months after an indefinite contract was established with people benefitting from the System; the modification of Law 11/2013 to include said young people collective in several incentives to hiring that were established in the law and the increase in the maximum amount of social security contribution bonuses, oriented towards financing the training costs that were linked to said contract, when hiring someone who benefitted from the Young Guarantee (Guamán, 2014;

8 About this new contract vid, among others: Hernández-Bejarano, 2014; Pérez Rey, 2014; Salcedo, 2013.

9 Cordero, 2013 and the bibliography cited in this article.10 About this topic: Monereo, 2014; Fernández, Calvo, 2013; Guamán, 2014.

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law 11/2013 and RDL 16/2014) has become, thanks to the flexibilization of complementary hours (in indefinite duration and temporary contracts) and the creation of voluntary complementary hours (in indefinite contracts) in a sort of "contract on demand" (Rodríguez-Piñero, Valdés y Casas, 2014).

- One of the most important goals of these reforms has been the promotion of internal mobility of workers and change of working conditions, including working time, wages. For this goal, the reform of 2012 have include mechanisms to amend the provisions set by collective agreements and salary opt-out clauses

- The reform has also deeply modify the dismissal procedure. For individual dismissal, both cost and procedure have been changed. Nowadays, compensation for unfair dismissal equal to 33 days of salary per each year worked up to a limit of 24 months. Moreover, the reform established the suppression of procedural salaries (or interim wages) in those cases when, facing the declaration of a dismissal as being unfair, the employer chooses to pay a compensation and not to re-admit the employee. In this way, the cost of unfair dismissal, if it does not incur in nullity, can be determined without the need to make use of a dispute resolution process and independently of the time it takes to solve it, which minimizes the interest employers will have in reaching agreements in order to avoid judicial proceedings. The cost to the employer of dismissing without a fair cause does not arise in case the employee decides to appeal, and so, the possibility of conciliating interests without resorting to judicial proceedings diminishes. Also for individual dismissal, article 52 ET establishes the possibility of terminating an employment contract due to causes not attributable to the employee, even when they are related to his own personal conditions, and due to causes related to the undertaking (objective dismissal). Among the former, we can list incapacity, lack of adaptation to technical modifications in the workplace and absenteeism, even when justified if surpassing certain limits. The latter refers to economic, technical, organizational or production causes that negatively affect the economic situation of the company. With the reform of RDL 3/2012, the definition of these causes has been greatly amplified, in particular in the case of economic ones. It is considered a cause for dismissal whenever a loss of sales is found or forecast, or the level of normal income or sales is steadily diminishing. It will be understood that the diminishing is steady if during three consecutive three-month periods the ordinary income or sales level for each third-month period is lower than what was registered for the same period during the previous year. Same grounds can be used for collective redundancy.

- Decree-Law 3/2012, later transformed into Law 3/2012, carried out the greatest reform of collective bargaining in three directions with the stated objective of “making collective bargaining an instrument rather than an

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obstacle to adapt employment conditions to specific circumstances in the undertaking”. Firstly, in regard to the so-called “opting out” from statutory collective agreements (art. 82.3 ET), increasing the possibilities to opt-out from such agreements at the level of the undertaking; secondly, granting the collective company agreement partial priority over the sectoral agreement (art. 84.2 ET), eliminating the authority of social partners to specify a suitable negotiation structure; lastly, a temporary limitation on the “extended validity” (“ultraactividad”) of collective agreements (art. 86.3 ET) to avoid the forced extension of their content. Later, Decree-Law 20/2013 enabled the non-enforcement of collective agreements in the sphere of Public Administrations at the unilateral will of the Administration. Decree-Law 3/2012 and the measures contained therein have been strongly criticised by the doctrine and the courts, with doubts arising on whether they abide by the Constitution or not. Similarly, the International Labour Organisation’s Committee on Freedom of Association in March 2014 settled the complaint raised by several Spanish trade unions against this regulation and against RDL 20/2012, criticising such reforms in view of ILO Conventions 98 and 154. However, as we have stated, Spanish constitutional court has consider that the aforementioned reform is perfectly compatible with the constitution11.

- Reduction in pension benefits: By the adoption of 27/2011 Act on the updating, improvement and modernisation of the social security system the socialist government upped the retirement age to 67; increase the reference period for calculating pension benefits as well as the number of years of contribution required to receive the maximum allowance. With the 23/2013 Act on regulating the sustainability factor and the revaluation index for the pension benefits of the social security system, the conservative government delinked the annual pension increases from the inflation rate and stabilised sustainability factor, which will relate benefits paid with life expectancy and with workers’ contributions within the same year12.

- Elimination of “co-responsibility” labour policies for men and women and restriction of conciliation measures13

5. Conclusions

The context of a high structural unemployment level in Spain, to which the one caused by the economic crisis is added, amounting to six million people (more than 6.5 million if we add hidden unemployment or potentially active population to it, as the INE observes) is a fertile ground for the extension of the precariousness model. The existence and pressure caused by this strong industrial reserve army of labour brings

11 Casas, Rodríguez-Piñero, Valdés Dal-Ré, 2013; 12 Suárez, 2014; Monereo, 2014; Gandía, 2014.13 Miñarro, 2013; Lousada, 2013; Herraiz, 2014; Rodríguez, 2014; Guamán, 2015.

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employment conditions and standards down, first by acting directly over the labour market and secondly, over its regulation, under the premise handled by several governments that in order to create employment, it is necessary to make it cheaper and strip its protection of it (Guamán and Lorente 2015). The need and urgency of creating employment at any cost is stressed, and this cost is none other than bringing down or degrading employment conditions. This process of degrading of the employment relationship comes under the enormous pressure that unemployment exerts in Spain since the early 80's.

All these processes acting on the objective plane come together with the subjective plane that places people in a context where "the usual" or the only thing they have known is labour precariousness. It is something to which young people are used to, even if as time goes by, it starts to be associated with the corresponding age cohort and thus ends up extending itself to higher age groups. This extension of employment precariousness socializes young workers and other social groups such as female or immigrant workers, in this context that treats employment precariousness as "the rule", in the shape of a precarious collective shared consciousness as a necessary labour context, shattering their aspirations of a decent work, which appears to them as an unattainable horizon. This perception of precariousness as the rule has a demobilizing effect which also disrupts the working class in so far as it fragments and even places it in an apparent contradiction of interests between its members, extending discourses that try to put emphasis on the alleged existence of privileges for some workers or of worker elites. All of this together with the extension of individualists values and the breaking up of class solidarity links takes us to the extension of the principle of "if I'm suffering from it, let others also suffer from it" which ironically, puts pressure towards the extension of precariousness amongst all of the working class and which brings the whole set of employment conditions down.

Beyond the problem of unemployment, a solution for precariousness is absolutely needed. As we have seen, all labour law reforms adopted following the recommendations of the EU have been aimed at the same direction: the erosion of "standard employment relationship"14 in Spain. As it has been proved, the new standart is being built in a context marked by the following trends: rise and generalisation of temporary contracts and part-time work, de-regulation of open ended contracts, destruction of permanent jobs (which would not be recovered), stabilisation of unemployment rate, modification of the collective bargaining structure and reduction of

14  For an in-depth look into the features of the standard employment relationship see Standing (1988). As it has been proved, the new standart is being built in a context marked by the following trends: rise and generalisation of temporary contracts and part-time work, de-regulation of open ended contracts, destruction of permanent jobs (which would not be recovered), stabilisation of unemployment rate, modification of the collective bargaining structure and reduction of the collective agreement’s coverage, reduction of trade union power, social legitimation and institutional weight. In particular, temporary hiring has been the spearhead of the precarization process of labour in our country, which has been much broader and has affected all employees (Prieto et al., 2009). The repetitive call to employment flexibility has resulted in Spain to an unparalleled growth of temporary employment in various business sectors linked to activities of low productivity and low level of value-added; a measure to achieve competitiveness through price and degrading conditions of both employment and work

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the collective agreement’s coverage, reduction of trade union power, social legitimation and institutional weight. In particular, temporary hiring has been the spearhead of the precarization process of labour in our country, which has been much broader and has affected all employees (Prieto et al., 2009). The repetitive call to employment flexibility has resulted in Spain to an unparalleled growth of temporary employment in various business sectors linked to activities of low productivity and low level of value-added; a measure to achieve competitiveness through price and degrading conditions of both employment and work

From the establishment is launched the proposal of a single contract as formula to reduce the high temporality in Spain (Dolado and Felgueroso, 2010) based their proposals on the paradigm insider-outsider, under alleged excessive protection of permanent workers (insiders) in our country that would be in the origin of the scarce job creation, as well as the high volume of temporary employment (outsiders) to the extent that employers would not have had no choice but to use this formula to avoid the exorbitant costs of hiring indefinitely. "This is a common phenomenon in those countries that once a labour reform was undertaken in the margin, opening the possibility for temporary hiring, without changing the levels of protection of permanent contracts" (Dolado, Felgueroso and Jansen, 2010: 58) [translation by authors].

From trade unions, some proposals are being launched, mostly aimed at derogating last labour law reforms and creating “employment plans” as well as recovering public services and rehiring public employees.

From scholars and the foundation of IU another proposal, in addition to those launched by trade unions, is arising, the “Job Guarantee” or “Employer of last resource” which is being theorized by many critical economist, labour law experts and sociologist.

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Rodríguez, M.F. (2014) “Efectos de la crisis económica sobre el trabajo de las mujeres”. Relaciones Laborales, Nº1

Salcedo, M.C. (2014) “De nuevo sobre el período de prueba tras la doctrina del Tribunal Constitucional: el necesario respeto a las normas internacionales (a propósito de la SJS nº 3 de Barcelona de 5 de noviembre de 2014)”, Revista de Derecho Social, Nº 68.

Saragossà, V. (2013): “El discurso oficial de la precariedad laboral. aproximación a las exposiciones de motivos de las reformas laborales en torno a la precariedad”, en Guamán, A.: Temporalidad y Precariedad del Trabajo Asalariado: ¿el fin de la estabilidad laboral?. Albacete: Bomarzo.

Sola, J. (2013): “El legado histórico franquista y el mercado de trabajo en España”, XI Congreso Español de Sociología, http://www.fes-web.org/congresos/11/ponencias/334/

Suárez, B., (2014) El sistema público de pensiones: crisis, reforma y sostenibilidad, Lex Nova-Thomson Reuters, Valladolid, 2014

Valdés, F., (2013) “La reforma laboral de 2012 (Notas sobre su texto -sistemática interna y calidad técnica- y su contexto -la falta de correspondencia entre el objetivo proclamado y los objetivos realmente perseguidos-)”, Relaciones laborales: Revista crítica de teoría y práctica, Nº2

II. From polarisation to precarisation of Italian labour market in times

of austerity

Antonio Loffredo1

1. - The “never ending reform” of Italian Labour Law

1 Labour Law Professor, University of Siena.

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The present essay aims to underline the connection among legal interventions in Labour Law, with particular attention to those at state level in the last decade, the fragmentation of businesses and the creation of bigger inequalities among employees, whose importance has been clearly felt in the years of the austerity policies2. Moreover, the workforce polarisation and the existence of at least two different labour markets3, one for workers having specialisations required by enterprises and another for those less skilled, is by now an evident reality, as it has been underlined by many OECD outlooks about Italian employment4. It is not unreasonable to assume that this trend has received a strong support even from the current legal framework and, particularly, from the most relevant Italian Labour Law reforms in the last twelve years: the “Biagi Reform” (Legislative Decree 276/2003), the “Collegato lavoro” (Act 183/2010), the “Fornero Reform” (Act 92/2012) and the “Jobs act” of the government in charge (2014-15).

The legal framework concerning Labour Law from 2003 until today has initially allowed and then even fostered a certain polarisation of economic and legal protections provided for the different kinds of employees, also based on the professional skills of workers5. This polarisation has resulted in significant differences in protections, especially for those workers who were hired in the new millennium, through some phenomena, among which it is worth citing because of their importance: a) the fragmentation of the enterprises and the creation of mono specialised businesses after the outsourcing reforms of 2003; b) the regulation of some contractual typologies in a more precarious way, acceptable almost exclusively by unskilled workers having a low bargaining power, or to some social clusters or categories towards which they are traditionally directed; c) the increase of “subjective causes” to conclude some contractual typologies characterised by less legal and wage protections, mostly used by enterprises operating in labour intensive sectors; d) the use of training in the employment contract mostly in an occupational key through the reduction of workers protections, which has resulted in the debasement of the professional incidence inside the apprenticeship and, finally, e) the unfair dismissals reform.

2. Outsourcing and enterprises’ fragmentation

Starting from the effects of new rules about outsourcing6 on Italian labour market, it is simple to note how this situation is different in comparison to that regarding Labour Law in the past century, in which the cases of decentralised production were few. Act 1369/1960 was a symbol of that labour law, forbidding the employer to contract the execution of mere work performances and punishing this phenomenon with the establishment of an employment relationship with the real

2 It’s important to stress, however, that the economic crisis has always been a travel companion of Labour Law, PALOMEQUE C., “Un compañero de viaje histórico del Derecho del trabajo: la crisis económica”, in Revista de Política Social, 1984, n. 134.

3 On the “social” role of labour market SOLOW, R., Il mercato del lavoro come istituzione sociale, il Mulino, Bologna, 1994.

4 Since 2004 OECD, Employment Outlook, Oecd, Paris.5 LOFFREDO A., Diritto alla formazione. Realtà e retorica, Cacucci, Bari, 2012, p. 111 ff.6 SPEZIALE V., “Il datore di lavoro nell’impresa integrata”, in Giornale di diritto del lavoro e

relazioni industriali, 2010, p. 5.

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employer-user and not with the formal employer. For this purpose, the legislator had introduced two principles: the joint liability between the formal employer and the real employer-user for credits claimed by workers and the principle of equal treatment between client’s and contractor’s workers. Article 85 of Legislative Decree 276/2003 abrogated the latter principle and it is resulting in the devastating effect of creating two markets having different economic and legal conditions. The first one is for clients, with basically stable and more protected workers; the other one is for contractors, which are under the economic authority of clients, often operating in labour intensive sectors and with low skills. The workers of these sectors are often hired with precarious contracts, the duration of which can coincide with the duration of the contracts between clients and contractors7. In this way the labour market has been polarised and it is happening the perverse effect according to which a commercial contract concluded between two enterprises influences directly the initial duration or, still worse, the termination of the employment contract between the contractor and the employee, bypassing the dismissals regulation.

This kind of outsourcing manages to guarantee even a general decrease in the transaction costs through the sharing of them with other enterprises towards which strong collaborative relations are established: indeed the new formulas of outsourcing allow the principal undertaking to maintain a substantial control and to exercise factually its powers on the decentralised parties8, although they have autonomy in management and in responsibility, keeping its own specialisation in a certain activity.

Therefore, if Act 1369/1960 could be considered the symbol of a certain Labour Law aimed to protect the workers, Legislative Decree 276/2003, which has completely abrogated Act 1369/1960, is the real paradigm of a law in which the organisational needs of the enterprises have prevailed strongly on the protection of workers.

Even the transfer of undertakings reform can be read in the same perspective. The modification of Article 2112 of Italian Civil Code, also carried forward by Article 32 of Legislative Decree 276/2003, has specified the notion of “part of undertaking”, stating that a functional independent division is “an organised economic activity, identified by the transferor and the transferee at the moment of the transfer”. This part of the regulation results in a serious risk of abuses, allowing to use this regulatory scheme both to break the enterprises in small-sized firms and to cut some “dry branches” of undertakings without having to follow the collective dismissals regulation9.

Finally, the introduction of both temporary agency work and staff leasing in 2003, as well as the Renzi Government reform of 2014 (the first step of the “Jobs Act”) that has liberalised the temporary agency work without bindings, allow enterprises to fragment their productive organisations and their legal status too10.

Probably, the principle of the economic dependence between two enterprises could be a useful tool to establish labour relationships formally belonging to contractors with clients and to try to reduce the proliferation of substantial subordinate enterprises, inside of which workers, considered as second-class workers, are mostly employed

7 SCARPELLI F., “Esternalizzazioni e diritto del lavoro: il lavoratore non è una merce”, in Il Diritto delle Relazioni Industriali, 1999, p. 353.

8 DE SIMONE G., Titolarità dei rapporti di lavoro e regole di trasparenza. Interposizione, imprese di gruppo, lavoro interinale, F. Angeli, Milano, 1995.

9 GALLINO, L., L’impresa irresponsabile, Einaudi, Torino, 2005.10 CORAZZA L., “Contractual integration” e rapporti di lavoro, Cedam, Padova, 2004.

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because of their low skills but who have, instead, the same dignity and who deserve the same respect from the legal system.

3. Atypical contracts and disadvantaged groups in the labour market

The “everlasting labour market reform” begun in the ’80s has modified the rationale of Italian Labour Law11 and has devastating effects mostly toward workers that are on its periphery, especially young people, immigrants and women.

Since 2003, Italian legislator created an enormous number of contracts (in a given moment 43 different employment contracts did exist simultaneously); however, there is a recent Legislative Decree (of June 2015) about contractual typologies that concerns the whole area of precariousness and tends to a formal reduction of the number of the contracts but, on the other hand, to further flexible rules in favour of enterprises12, in order to accomplish the European Union austerity policies.

Concerning that, it is worth to outline a peculiarity of Italian Labour Law, namely the idea according to which self-employed workers would not need the legislator’s balancing activity, because they would not be in a situation of contractual imbalance in a legal and economic sense. Thus, Labour Law has chosen to give a direct protection to employees in a prevalent and exclusive way. This approach has certainly fostered the birth of many “false self-employed”, who have represented for a long period one of the favourite way for the Italian entrepreneurs to avoid Labour Law rules and protections.

Workers involved in this phenomenon are often the most disadvantaged groups of the labour market, namely those employed with coordinated and continuative collaboration contracts, in many occasions confused with employees13 because of the broad and distorted use of them done by enterprises, which have entrusted these “parasubordinate workers” with many functions previously assigned to employees, obtaining evident benefits concerning wages, social security and legal regulation. When the abuse of this regulation scheme has appeared evident, it started a debate concerning which kind of legislative action should be more suitable to contain the phenomenon. Legislative Decree 276/2003 has modified the normative situation establishing the “project work” 14 which, even if it was inserted in the right direction of extending some protections provided for employee to parasubordinate workers, has been an ineffective regulation both for the generality of the definition of the “project”, which does not prevent simple avoidances, and for the limited extent of protections. Furthermore, the mentioned Legislative Decree of June 2015 about contractual typologies developed by the Government in charge aims even to erase these very few protections and bindings

11 It’s possible to talk of a “permanent” Labour Law reform not only in times of austerity also in other countries of the European Union, PALOMEQUE C., “La versión 2001 de la reforma laboral permanente”, in Revista de Derecho Social, 2001, n. 15, p. 9.

12 See the monographic number of Quaderni di Lavoro Welfare, n. 15, 2015.13 REVELLI M., La sinistra sociale, Bollati Boringhieri, Torino, 1997, p. 85, talks of

“subordination of the autonomous work”.14 PALLINI M., (a cura di) Il lavoro a progetto in Italia e in Europa, il Mulino, Bologna, 2006

and SANTORO PASSARELLI G.-PELLACANI G. (a cura di), Subordinazione e lavoro a progetto, Utet, Torino, 2009.

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introduced with the project work and to bring back the whole category of parasubordinate workers to the coordinated and continuative collaborations area15.

3.1 Part-time and precarious jobs not just for womenA part-time contract, if chosen voluntarily, can represent an effective instrument

of flexibility for all the parties involved, since it allows the employee to have a better conciliation of work and personal life. However, in times of austerity, also part-time contract has become a precarious contract. From its very first introduction it was mainly used for two categories of workers: young people still living in the parents’ household and hence not in need a full salary, and women, that often require to work and look after the house and children. In recent years however, the dramatic decrease of full-time jobs offers and the consequent reduction of the actual employees’ power of choice have determined a sharp increase in the use of part-time contracts amongst adult men as well.

The most significant aspects of the legal regulation of part-time contracts, that have been enforced more and more frequently by the employers, are the possibility of extending work hours above the agreed hours — but still below full-time (“supplementary work”) — and changing the hour distribution throughout the week. The former has been extensively reformed in many occasions, from 2003 to the, yet mentioned, recent Legislative Decree of the government in charge16, and the changes were mostly beneficial to the enterprises. Legislative Decree 276/2003 has significantly amended the “flexible” and “elastic” clauses: the first ones refer to the possibility of changing the temporal allocation of work performance, while the elastic ones concern the possible increase of the maximum duration. Such clauses, whose eligibility had been banned by the Constitutional Court during the previous regulation, must be agreed by both parties and require the explicit consent of the employee; however, in the absence of collective agreements regulating the subject, the employer and employee may also adopt those clauses17, whose concrete activation is subject to only two requirements: a notice period from the employer and the worker’s right to a defined compensation.

Therefore, the increase of part-time contracts, not only amongst women and young people doesn’t come as a surprise, as it allows the employer to have a broad management of part-time workers, who are actually employed for a number of hours that quite frequently are very close to those worked by their full-time colleagues.

3.2 Professional training as an instrument for occupational policiesDuring the ’80s and ’90s, Italy saw a wide spread use of professional training

contracts, the key factor of their success can be easily explained by their ability to allow flexibility on labour costs18. Professional training contracts, the use of which was also supported by a government’s policy of incentives, were an instrument of labour policy that made easier the transition from temporary to permanent employment, mostly for

15 PERULLI A., “Lavoro subordinato e lavoro autonomo”, in Quaderni di Lavoro Welfare, n. 15, 2015, p. 16.

16 ZOPPOLI L., “Il legislatore limitato”, in Quaderni di Lavoro Welfare, n. 15, 2015, p. 13.17 See in DE LUCA TAMAJO R., RUSCIANO M., ZOPPOLI L. (a cura di), Mercato del lavoro.

Riforma e vincoli di sistema, Editoriale Scientifica, Napoli, 2004, the essays by ZOPPOLI A., ALESSI C., BAVARO V.

18 ZOPPOLI L., “I contratti di formazione e lavoro da strumento pseudo-formativo a tecnica “debole” di governo della precarietà”, in Studi in onore di Pietro Rescigno, Giuffrè, Milano, 1998, p. 825.

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young people. So, they were used mainly with an occupational function, which had also the effect of demeaning the “professionalize” function of training, making it an effective tool to undermine some of the workers’ rights19.

As of now, the apprenticeship is the only professional training contract left in our labour market. It underwent various stages of reforms: first the radical reform of Legislative Decree 276/2003, it then suffered various “adjustments” firstly in the Refunded Act in 2011, then in a new reform in 2012, in 2014 and, finally, in the complete reform of labour market included in the mentioned Legislative Decree about precarious contracts prepared by Renzi’s government, which will steer employment contracts towards an even more flexible forms.

All Italian governments of the third millennium have focused on the issue of extending the use of apprenticeship and, since the 2003 reform, have developed contracts forms increasingly more beneficial to the needs of businesses. The Legislative Decree of last June could have been an opportunity not only for a real simplification of the number of the existing work contracts but also to make said contracts’ function clearer, allocating a specific function to each one of them and avoiding unnecessary “competitions” between contracts. Unfortunately, the Legislative Decree does not follow this direction and, in regard to the apprenticeship, it formally reiterates the contract’s double function: professional training, on one hand, and employment, on the other. Nevertheless, the legislative regulation clarifies that the latter is the most relevant function, as shown by the rules pointing out on business incentives rather than on training.

However, after the so-called Jobs Act of Renzi’s government, the apprenticeship suffers the “competition” from other types of contracts that are much more affordable for businesses. The main advantages of hiring with an apprenticeship contract have always been the exclusion of the apprentice from appearing in the company’s numbers of employees and the free dismissal at the end of the training period. Nonetheless, the recent reform of Art. 18 of Statuto dei Lavoratori (see par. 4) and the complete liberalisation of the fixed term contracts directly through the company or through agencies, make both these regulatory incentives less and less attractive for entrepreneurs. Moreover, the incentives on social security contributions have always been the most attractive point for businesses in hiring apprentices but, at the moment, they cannot compete with the incentives provided for the “increasing safeguards contract” (so-called contratto a tutele crescenti) introduced by the Jobs Act (Legislative Decree 23/2015), which completely cancel any social security contribution by the employer during the first three years of the contract.

Due to a supposed lower productivity of the worker that must undergo a training period, businesses can pay an apprentice up to two levels less than the other workers. This reduced salary is confirmed by the Legislative Decree of June 2015 but becomes absolutely unacceptable because of the complete cancellation of the obligations to pay the employee during external (public) training, on one hand, and to pay up to 10% of the wage for the hours of training performed within the company, on the other hand. This provision constitutes a real insult to the dignity of apprentices, who must pay for professional training out of their own pockets, even when the training is inside the

19 NAPOLI M., “Disciplina del mercato del lavoro ed esigenze formative”, in AA.VV., Sistema formativo, impresa e occupazione, Esi, Napoli, 1998, p. 51; LOFFREDO A., Diritto alla formazione. Realtà e retorica, cit., p. 183.

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enterprise and often “looks like normal work” because it’s difficult to control its real execution.

The only possible way to give sense to the apprentice work contract could be through the enhancement of the training, as it is the only aspect in which there is no “competition” with other labour contracts, which would give a sign of a real change in employment policies towards quality employment and not austerity and low-cost workforce.

4. The breakdown of stability principle in workplacesThe fixed term contract has come to relevance in the Italian legal system only in

2001 — before then it had been used exclusively in the cases provided by law, which was when the employer needed a worker which task was not permanently necessary for the enterprise. Therefore, the rate of temporary employment in Italy had rarely exceeded 8%, far from many countries of the European Union.

The 2001 reform (Legislative Decree 368/2001) was the first Act of the Berlusconi government in Labour Law, which clearly demonstrates its determination to break down job stability. The decree, which amended the fixed term contracts and introduced a general clause that would allow a temporary contract whenever there are “technical, productive, organisational or substitutive reasons” 20, caused a remarkable increase in the number of temporary workers, whose dedication to the company is strongly guaranteed by their hope to obtain a permanent contract, more than any legal obligation could.

Legislative Decree 368/2001 is undoubtedly a “wrong” transposition of Directive 1999/7021, which was a European collective agreement signed by social parties aimed at preventing the abuse of temporary contracts. Nevertheless, this reform didn’t meet completely the expectations of the employers since it had some problems related to the activity of the judges22, that punished the abuse of the fixed term contracts even in that, so flexible, regulation23; basically for that reason, the government of Matteo Renzi converted the fixed term contracts into a sort of long trial period, which allows free temporary employment for the first three years of the contract with no reasons needed, likely breaking the rules of EU Directive 1999/70 and the principles and rules concerning unfair dismissals.

This new trend in Italian Labour Law, which wants to achieve a complete breakdown of stability within the workplace, as a right and as a symbol, was a clear consequence of austerity policies and is leaving Italian labour market from a situation of polarisation to another of extended precarisation24 and, so, did not leave the rules of unfair dismissals untouched.

20 CARINCI M.T., Il giustificato motivo oggettivo nel rapporto di lavoro subordinato, Cedam, Padova, 2005.

21 ZAPPALÀ, L., “Riforma del contratto a termine e obblighi comunitari: come si attua una direttiva travisandola”, in Diritto del mercato del lavoro, 2001, p. 633.

22 The first judgement of the Corte di Cassazione on that regulation was n. 7468, 21/5/2002, in Rivista Giuridica del Lavoro e della Previdenza Sociale, 2003, II, p. 49.

23 SPEZIALE V., “La riforma del contratto a tempo determinate”, in Diritto delle Relazioni Industriali, 2003, p. 225.

24 LASSANDARI A., “L’ordinamento perduto”, in Lavoro e Diritto, 2015, p. 63.

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The Italian system in this field grants workers a protection mainly based on the size of the company25: the protection against unfair dismissals may be “real” or compensated by a monetary reparation. The so-called “real” protection applies to large and medium enterprises and it is guaranteed by the “well known” Article 18 of Act 300/1970 (commonly known as Statuto dei Lavoratori): it determined the reinstatement in the job as if the employment relationship had never been interrupted. The constitutional articles that the Constitutional Court has considered as the basis of Article 18 have been the Articles 4 (the right to work) and 35 (protection of labour in all its forms and applications). In addition to the reinstatement, the worker was entitled a compensation, the cost of which was calculated in the unpaid wages the workers did not receive, beginning from the date of the dismissal until the actual reinstatement, including all social security contributions. In small businesses, unlawful dismissals are punished with a lower protection, where the employer can choose between “re-hiring” the worker (i.e. the dismissal is effective and should begin a new employment relationship) or a compensation determined in the judgment that may vary between 2 and 6 months of salary. In this area, where “real protection” does not apply, it’s common to find a more precarious labour market with fewer protections, where workers are afraid about claiming their rights and trade unions have increasing difficulties to enter. Article 18, beyond its specific applications, had an enormous importance in the political and academic debate as it represents a multiplier of rights: that is, without stability employments the workers don’t claim their rights. For this basic reason, the Constitutional Court’s judgment 174/197226, has acknowledged that only when there is a “real” protection against unfair dismissals workers can feel free to exercise their rights and therefore has provided two different deadlines for the prescription of rights, during or at the conclusion of the employment relationship.

There have been several attempts to reform the area of “real stability” and the most notable was carried forward by the government Berlusconi in 2002, which aimed to allow a suspension of the application of the rule for a certain period of time and in some areas of the country, especially in the southern regions of Italy where the rate of unemployment is remarkably higher. The trade union response was overwhelming: on March 23, 2002 one single union, the CGIL, organised a memorable strike that brought on the streets of Rome more than 3 million people in defence of Article 18 and of the right of all workers to see their relationship guaranteed by a system that allows to live as a free citizen in the workplace.

Another response to this offence against Article 18 was the referendum in 2003, which aimed to extend the “real” protection to workers employed in companies with less than 15 employees. The referendum did not reach the necessary quorum to make it valid but collected more than 10 million votes in favour, a political outcome that seemed to discourage any government from retrying a reform with the same purpose.

Recognising these obstacles, as it has been seen previously, Berlusconi’s government sought other ways to achieve the same goal: by signing a series of acts that applied a large scale liberalisation of many employment contracts (fixed term and part-time contracts, apprenticeship, “work project” and more) and especially the abuse of contracts and subcontracts, Berlusconi’s policy has dramatically reduced the cases in which “real” protection applies, broadening the precarious market and creating a

25 It applies to enterprises employing more than 15 workers.26 In www.cortecostituzionale.it

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“reserve army” of workers. The choice of using the strength of weak ties27 has made the system more and more precarious, especially for new contracts, as it avoided to directly modify the protection against unfair dismissals whilst reducing its effectiveness.

Once the goal of creating a labour market where only few workers can effectively use their rights fully and a vast majority move between unemployment and precarious labour relationships, the objective of the austerity policies was the reduction of protection against unlawful dismissal and, specifically, to remove almost completely the real stability. In the political and academic debate, Art. 18 has been always considered the example of an anomaly of Italian Labour Law; however, it is rarely stressed that the real Italian anomaly issue on dismissals is the ridiculous compensation provided to workers unlawfully dismissed in companies with less than 15 employees and, not least, the absence of a general system of economic protection in case of unemployment. Maybe, the Italian problem has never been the “real” protection, in spite of what the employers associations and the guidelines of the European employment policies use to repeat, but the area where no real stability is applied, since Italian economy is based on small enterprises.

Recognising the impossibility for the Berlusconi governments to formally amend Art. 18, and despite having widely reduced its effectiveness, the European Union has “strongly supported” the appointment of Mario Monti, a former Competition Commissioner in the EU, as Prime Minister of Italy, in order to accomplish the austerity policies28. His government of technocrats made a vast Labour Law reform that, among other things, altered Art. 18 reducing the possibility of the “real” protection to very few cases and facilitated the use of the objective dismissal by the employer limiting the judge intervention.

None of these measures, which had cut down the cases eligible of coactive reinstatement, seemed to be sufficient enough to meet the demands from the EU and the first law reform contained in the so-called Jobs Act of the Renzi government proceeded to completely eliminate the sanction of reinstatement except for discriminatory dismissals. In all the other cases, it has recently introduced (Legislative Decree 23/2015) only a very low economic sanction, fixed by law and based on the seniority of the employee unlawfully dismissed (the so-called “increasing safeguard contract”, contratto a tutele crescenti).

This decision appears to be the final stage of a long journey that begun in 2003 and has led the Italian legal system to be one of the most flexible of all Europe both for hiring or dismissing. It’s very important to highlight how this process panned out because, once recognised the impossibility of making the reforms it required, the European Union itself has intervened directly through a replacement of Italian democratic institutions to achieve an objective that European guidelines on employment had been requiring for more than a decade. Thanks to policies that diminished the area of “real” stability and had pushed Italian labour market to a new level of precariousness, it is clear that the EU’s request to modify the rule that was a symbol of workers’ rights in Labour Law had nothing to do with objectives of employment policies and it was

27 MARIUCCI L., “La forza di un pensiero debole. Una critica del Libro bianco del lavoro”, in MARIUCCI L. (a cura di), Le fonti del diritto del lavoro. Quindici anni dopo, Giappichelli, Torino, 2003, p. 255.

28 As it was clearly shown by the “secret” letter sent the 29 th of September of 2011 (and published by the Corriere della sera the 5th of October of the same year) by Mario Draghi and Jean Claude Trichet to the President Berlusconi.

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only driven by the “austerity obsession” to recover the loot of a robbery29: the license to fire freely.

4. Trade unions in a polarised labour marketThe increasing expansion of precarious jobs and polarisation of Italian labour

market determined a severe decline in terms of membership and representativeness for trade unions; the most representative among them tried to give a (late and not too effective) response to those problems through the creation of ad hoc structures for atypical workers, looking for their integration with the “standard workers”, in order to create a common consciousness: the three major federations for atypical workers are Nidil (Cgil), Felsa (Cisl) and Uiltem.p@ (Uil). “Autonomous” trade unions (Cobas, Usb, Confsal, Cisal and so on) have “naturally” included atypical workers in their actions, with more radical positions, finding good responses by them; however, the peculiar legal framework of Italian industrial relations make their lives especially complicated, and even more under the effects of the EU austerity policies.

The efforts of the unions are likely to be cancelled by a legislator who does not hide his lack of sympathy for them; the crisis of representativeness that trade unions are facing is, certainly, a consequence of the difficult economic period that we are living but, at the same time, of the absence of legislation regulating the exercise of the rights contained in the Constitution. Specifically, the constitutional model of collective bargaining (described in Article 39) and the exercise of the right to strike (Article 40) have not been developed by Italian legislation. The reasons are multiple but one of them worth pointing out was the trade union’s “fear” for any public intervention in their organizations. However, this fear has a simple explanation, originating in the early fifties, given that they just came out of the violent repression of twenty years of fascism.

In the past century, this peculiar situation did not create great problems to trade unions’ activity thanks to their strong representativeness; instead, the breakdown of trade unions’ unity of the last decade, promoted by almost all Italian governments of this period and combined with the effects of the austerity policies, is now leading to cases of absolute confusion. This new political and social landscape makes impossible to keep on accepting a system without legal rules to verify the representativeness1 of trade unions because the major unions can even loose the right to have a representation in the company if the employer refuses to sign a collective agreement with that union. That’s exactly what happened in the conflict in Fiat that began after it acquired control of Chrysler. We should remember that Chrysler came from a troubled past and has been repeatedly on the brink of bankruptcy in recent decades. Being marginalized by the U.S. market, it was not surprising that when Barack Obama decided in 2009, after their bankruptcy, to bail out General Motors and Chrysler, no American business stepped forward to fix and re-launch the Chrysler. An attempt was made by Germany’s Daimler but, after losing several million dollars, it was forced to give up in 2007.

When Fiat acquired control of Chrysler, it circulated the illusion that an Italian company had begun a “conquest of America”. A few years on, it is clear that the situation should be seen in the opposite sense, because the strategies used by Fiat in

29 ROMAGNOLI, U., “Prólogo”, in BAYLOS GRAU A.-PÉREZ REY J., El despido o la violencia del poder privado, Trotta, Madrid, 2009, p. 13.

1 D’ANTONA M., “Diritto del lavoro di fine secolo: una crisi d’identità?”, in Rivista Giuridica del Lavoro e della previdenza sociale, 1998, p. 319.

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Italy are not taken from Italian industrial relations tradition but, on the contrary, they derive directly from the U.S. The problem is that the importance of this company has spread the conflict to other enterprises and sectors all over the country2.

Fiat, using an authoritarian and undemocratic approach, decided to exit from the structure model of collective bargaining of Italian industrial relations system regulated by the Protocollo of July 1993 and, simultaneously, exit from the model of union representation in the company. The most significant step of Fiat’s business strategy was to exit from the employer’s association with which it was affiliated (Federmeccanica/Confindustria). Therefore, as there are no obligations from legal sources for an employer regarding whether and with whom to bargain collectively, Fiat has been released from contractual obligations, and started a new era of collective agreements stipulated only with a few of the most representative unions, creating major conflict within the trade unions as well as sparking significant academic debate.

A paradoxical consequence of existing Italian legislation involves FIOM members. Though they represent the majority of the workers in the company, the members can lose the right to union representation unless FIOM signs the deal, because Article 19 of Statuto dei lavoratori guarantees this right only to trade unions that have signed a collective agreement applied within the company at any level1. Anyway, after the ruling of the Constitutional Court 231/2013, according to Article 19 of Statuto dei lavoratori, the most representative trade unions have the right to participate in the negotiations for the conclusion of collective agreements and the right to have the peculiar prerogatives provided for in Title III of the Statuto dei lavoratori2.

4.1 Atypical jobs and atypical strikesIn this complicated social, political and legal situation, made even more difficult

by austerity policies, the workers are suffering attacks on their individual rights, including the right to strike.

The only statutory regulation about striking in Italy, until 1990, when Act 146 on conflict in essential services was approved, had been Article 40 of the Constitution, which states merely that “the right to strike has to be exercised according to the laws that regulate it”. The succinct formulation of Article 40, which asked for the intervention of the law combined with the silence of Italian legislative bodies on the matter, resulted in their being replaced by social partners, case law and doctrine. So, we could say that the theory of the right to strike has been shaped through the dialogue between doctrine and case law, while collective agreements have focused on setting procedural requirements like no-strike clauses1 and cooling-off periods.

Thanks to this cooperation between scholars, judges and social parties, since the sixties, the right to strike has been regarded as an absolute, fundamental right of the worker, to be exercised in a collective way, for contractual or non-contractual reasons, including in the case of political and solidarity strikes. Specifically, “economic-

2 ALES E., “Dal caso Fiat al caso Italia. Il diritto del lavoro “di prossimità”, le sue scaturigini e i suoi limiti costituzionali, in Working paper C.S.D.L.E. Massimo D’Antona, 201/2014

1 GHERA A., “L’art. 19 dello Statuto, una norma da cambiare?”, in Il contributo di Mario Rusciano all’evoluzione teorica del diritto del lavoro, Giappichelli, Torino, 2013, p. 155.

2 ZOPPOLI A., “Art. 19 dello Statuto dei lavoratori, democrazia sindacale e realismo della Consulta nella sentenza n. 231/2013”, in Working paper C.S.D.L.E. Massimo D’Antona, 134/2011

1 ZOPPOLI A., La titolarità sindacale del diritto di sciopero, Jovene, Napoli, 2006.

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political” strikes, which are economic in their contents and political in their subject matter, fall within the exclusive competence of political power (for example, the general strike of last December against the reform of unfair dismissals), and have been regarded as a right by the Constitutional Court.

There is a clear connection between Article 39 (freedom of association) and Article 40 (right to strike) of the Constitution, as Article 40 provides an important tool to make the freedom of association effective; nevertheless, the right to strike has no connection to the presence of the trade union in the company because the right to participate in a strike is an individual right regardless of membership in the union that has claimed the right1. At the same time, it’s obvious that the absence of a trade union inside a company, as it happened to Fiom in Fiat conflict, makes much more difficult for them to organize collective actions2.

So, looking at the case law of our Constitutional Court, it can be said that in Italy, in the private sector, there are no legally binding procedural restrictions on collective action, and there are no real limitations on the objectives and contents of the strike. The exercise of the right to strike has the sole effect on the employment relationship of a proportionate loss of pay; any other employer’s action against workers on strike is explicitly prohibited, including dismissals, which must be considered unfair, even if they are a consequence of an illegal strike in essential services. Article 28 of Statuto dei lavoratori provides these rules, stating that in case of an action of the employer against strikers, trade unions may ask the labour judge for a summary injunction against the employer.

As we can see, lacking any statutory definition of rules on striking, judicial control has played a crucial role in defining the current regulatory framework of the right to strike; but, for the same reason, and perhaps under the influence of the European Court of Justice, in the future, we might see changes of direction in jurisprudence in our definition and exercise of rules on striking.

The different approaches of Italian judges and the European Court of Justice on this point are clearly shown in the regulation of the conflict between the right to strike and market freedoms. A historical decision of the Corte di Cassazione of 1980, regarding the legality of “atypical” strikes (which are collective actions like intermittent strikes or strikes by groups, and so on), stated that in our constitutional framework does not exist a notion of “typical” strike and that the notion of strike is to be found in what is understood as such in practice in the common meaning in society. The first consequence of this decision was that “atypical” strikes fell within the scope of Article 40 of the Constitution and could not be declared illegal.

The second consequence, which is particularly interesting when compared with the judgments of the European Court of Justice on strike, was that any damage that the strike may do to the business’s production had to be considered legal. This judgment doesn’t mean that in Italy the employer’s economic freedom is not protected against industrial action because the Corte di Cassazione specified that the exercise of the right to strike should not infringe upon the right of the employers to resume productive activities once the strike is over (business productivity protected by Article 41 of Constitution). The difference between the restriction inferred by Italian courts on the basis of Art. 41 of Constitution and that inferred by European judges, for example in

1 LOFFREDO A. (a cura di), La titolarità del diritto di sciopero, Cacucci, Bari, 2008.2 LISO F., “La Fiom e la rappresentanza in azienda”, in Il contributo di Mario Rusciano

all’evoluzione teorica del diritto del lavoro, Giappichelli, Torino, 2013, p. 166.

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Laval and Viking cases, which in some way we can say that they opened the austerity era in Europe, is that the former concerns a pathological stage of a company’s life cycle, protecting its survival and its ability to remain on the market once the industrial dispute is over, whereas the latter concerns the physiological condition of a company life cycle, pertaining to the protection of its business and its freedom to operate on the market. According to the European Court, this interest may not be restricted either by a collective agreement, whose function is precisely to limit the exercise of the economic freedom of the employer, or by a strike.

A paradigmatic example of what could happen to the right of strike in this new legal and political landscape is, once again, the Fiat conflict. Specifically, we should mention the so-called “liability clause” of some collective agreements, signed by Fiat with only two of the three most representative unions, that seems to have the intention to deny the right to strike to workers. Point 1 of the clause states that the breach of a single part of the collective agreement by the trade unions release the company from all the obligations contained in that agreement and in national collective bargaining. Point 2 states that even individual actions that violate the collective agreement, in whole or in a part, have the same effect as point 1.

This clause, in Fiat’s intentions, serves to limit conflict because it expressly individualises sanctions for breaching part of the agreement; in these cases, according to Fiat’s interpretation of the clause, the company can consider itself released from its obligation to comply with every other clause of the collective agreement, at the plant and national levels. The purpose of this clause is to avoid strikes on subjects regulated in the agreement, because the company knows that many workers and the major union disagree with its contents.

In my opinion, both clauses cannot reach the objective because, from the collective perspective (point 1), the clause should be considered as a simple “no strike clause” with the only difference that it has a predetermined sanction; if we use this interpretation, it would create little problem, as the collective parties can freely choose the type of sanction to apply in case of the breach of a collective agreement, that will bind only the signatory parties. On the other hand, in its individual aspect (point 2), it should be considered superfluous, because it is obvious that the contents of the collective agreement form part of the individual contract. If, however, it is intended to prevent the exercise of the right to strike of workers as individuals, we are facing a clear violation of Article 40 of Constitution, which recognises a fundamental right for workers that cannot be denied by the legislator, and, even less so, by a collective agreement or an individual contract.

Completely different rules are in effect if the strike is in essential services. The Act on strikes in essential services in 1990, amended in 2000, has no equivalent in Europe and is aimed at balancing the right to collective action and the exercise of constitutional human rights. An exhaustive list of rights that have to be balanced with striking is in Article 1 of Act 146/90 such as the right to life, healthcare, security, justice, freedom of movement, social security, freedom of communication, and education; in the subsequent paragraph, there is a non-exhaustive list of the services considered essential to guarantee those rights.

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This Law deals with conflict in general1, and not only with strikes, because these rules have to be applied in any case of conflict in essential services, independently of the legal status of the provider and of the employment relationship of workers involved. In all these cases, unlike in any other conflict, the strikers have to take into account that it’s necessary to find a way, mainly through collective bargaining, to allow the exercise of strikes without jeopardizing the fundamental rights of people. This characteristic of the Law makes that all the workers that perform their work in a sector included in the essential services are legally bound by the limitations to strike; so, as many accessory works in the essential services are performed by subcontractors firms, it happens often that precarious workers suffer great legal restrictions to their right to strike.

The first requirement for unions that are going to call on a strike in essential services is to comply with procedures for preventing and cooling the conflict. Then, if this procedure does not have a positive outcome, the trade union has to give written notice of the strike to the provider at least 10 days in advance, indicating the duration and reasons for the strike, so that the service users can be informed. The most important requirement is the guarantee that core functions will be maintained during the strike; so we can say that a legal strike in essential services can never lead to a complete stoppage of the service during the conflict. The core functions to be guaranteed during the strike are generally defined by collective bargaining, which has the task of specifying the functions that have to be considered indispensable for guaranteeing the core functionality of the constitutional right concerned.

Therefore, the substantive and procedural requirements set down by the legislation with respect to essential services are likely to make it extremely difficult for trade unions to call workers on a legal strike in these sectors, and even more in the sectors with big presence of precarious workers, who are more fearful in taking collective actions.

5. A new paradigm: the Labour market lawThe difficult situation that we are living in would suggest the approval of a

“promotional” legislation in order to facilitate the relationship between trade unions and the different categories of workers in the enterprises; even more, there is a urgent need for a legislative intervention with the purpose of defining at least rules on how to measure the representativeness of trade unions, developing Article 39 of the Constitution. Both objectives seem to be out of the political agenda of Italian governments of the last decade, who prefer to take advantage of this situation of crisis of representativeness of trade unions and, sometimes, have found the way to even strengthen the breakdown of trade unions’ unity.

In the austerity era, Italian Labour Law seems to have resolved the tension between the principles of a system focused mostly on “employment” purposes and one that protects the weaker parties of a contract, by favouring the former. The opinion that wants to switch Labour Law into a “Labour market law”, based on a supposed influence of the law on occupational dynamics, has generated social and generational tensions by widening the already existing gap between workers1: “strong” and “weak” employees,

1 ROMAGNOLI U., BALLESTRERO M.V. (a cura di), Norme sull’esercizio del diritto di sciopero nei servizi pubblici essenziali, in Commentario della Costituzione, fondato da Branca e continuato da Pizzorusso, Roma-Bologna: il Foro italiano-Zanichelli, 1994.

1 ROMAGNOLI U., “Diritto del lavoro e quadro economico: nessi di origine e profili evolutivi”, in

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men and women, adults and young. Italian legislation on Labour Law made the choice to create a multitude of contractual types, functional to business interests, and produced a multitude of social figures, which ultimately affected their individual behaviour, life expectancy and social perception.

Since 2003 Italian Labour Law has facilitated this phenomenon with the increasing use of “subjective causes”, especially for disadvantaged groups of workers in the labour market. The use of this legal technique is instrumental to the creation of various types of employment contracts aimed at occupying a widening percentage of workers with fewer rights and lowest salaries. Moreover, increasing the “subjective causes” designed for weaker groups can be sometimes considered a form of indirect discrimination2.

Job insecurity is widespread among young people and the same lack of stability has “infected” their own lives, as highlighted by the increasingly low birth rates; couples often have children only after obtaining the stability in their employment, a milestone that is achieved much later, and with less protections, in comparison to their parents’ generation.

The social and employment condition of young people in Italy it worsen when other variables such as geographic and gender are taken into account; in fact, while the general unemployment rate is 12,7% in 2015, youth unemployment is almost 40%, whilst female unemployment is at the 14.1% mark. Employment rates also find great differences between the northern and southern regions of the country and between men and women. In cases of young women, or people living in the Southern Italy, the effects of the “strength of weak ties” are extremely visible, with employers opting for precarious contracts with reduced rights rather than a standard contract that allows the termination of the employment without being subject to the (few lasting) rules for unfair dismissals. With the recent reform of the dismissals, the Renzi government completed this project of precarisation of Italian labour market3, achieving the objectives of EU austerity policies and sent a clear message to employers: they no longer have excuses for not hiring but, at the same time, they have all the excuses that they can desire to dismiss an employee.

Giornale di Diritto del lavoro e delle Relazioni Industriali, 2013, p. 589.2 SANTOS FERNÀNDEZ M.D., Maternità e conclusione del rapporto di lavoro a termine: profili

discriminatori, in Lavoro e Diritto, 2008, p. 689.3 ROMAGNOLI U., “Controcorrente”, in Lavoro e Diritto, 2015, p. 3.

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III. Juridifying Commodification of Labour Law: The Paradigmatic

‘Path Departure’ of Greek Labour Law during the economic crisis

Ioannis Katsaroumpas1

Abstract. Seven decades after Karl Polanyi published Great Transformation

(1944), the destructive for labour law wave of recent Greek labour law reforms taken in the context of EU/IMF-imposed austerity measures (2010-2014) provides another historical indication that de-commodification of labour was not an irreversible process. Upon examining individual and collective labour law reforms, the article suggests that developments must be seen as realising a process of ‘‘hyper-commodification’’ by juridification of Greece’s pre-crisis ‘partial de-commodification’ model which attacks (dilutes) the protective doctrinal foundations of Greek labour law.

1 DPhil (PhD) Candidate in Labour Law. Department of Law, University of Oxford

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