Italy’s Labour Minister Maurizio Sacconi claimed that radical changes to Italy’s employment legislation to make it easier to sack employees in Italy could spark acts of terrorism. While the minister does not fear for his own safety, he is reported to be worried about those who work with him.
Is the honourable Minister Sacconi being somewhat paranoid? Not exactly. Ten years ago, one Marco Biagi was murdered by the remnants of Italy’s extreme left-wing terrorist organisation, the Red Brigades. Why was Biagi assassinated? Primarily, it seems, because he was working as a consultant to the then government on how to liberalise Italy’s inflexible employment laws.
After being scolded by the European Union, Silvio Berlusconi’s government has been virtually obliged to introduce reforms which will go even further than the legislation the late Mr Biagi was working on. Hence Sacconi’s terrorism concerns. Reforms are necessary though.
President of the Italian Chamber of Deputies Gianfranco Fini believes is concerned Sacconi may be scaremongering over the possibility of terrorism in connection with employment law reforms. Fini would like Minister Sacconi to explain just why he feels there is the threat of terrorist activity. Whether Sacconi will do so, remains to be seen.
Italy Needs a more liberal employment environment
That Italy desperately needs a more liberal employment environment is unquestionable, even if the country’s unions do not appear to be agree.
In the main, Italian companies fight shy of offering Italy’s workers permanent work contracts. Instead, employees are often taken on and offered a temporary work contract which may or may not be renewed. After a couple of renewals or so, I forget the intimate details, in theory the employee in question must be given a permanent work contract. While this situation may sound acceptable, what has been happening in Italy is that before the requisite renewals had occurred, employment contracts, instead of becoming permanent, were terminated. Italy’s young have been particularly badly hit by these terminal contracts and have been finding it very hard to plan for their futures. No bank in its right mind is going to give someone with a two-year work contract a mortgage.
Not helping matters is that Italy’s temporary work contract salaries are commonly derisory. Despite this, Italy’s workers have been living in hope. What some employers have been doing is hinting to employees that a permanent work contract is just around the corner, or else nothing is said and the employee in question works their guts out in the belief they will eventually end up being taken on permanently. This has not been happening in the majority of cases as is evidenced by an unemployment rate of 25.9% for Italians aged between 25 and 34. The EU average is 15.7%, by the way.
Throw in factors such as global economic crises, a reforming government which doesn’t, plus Italy’s stagnant economy and you have more than a few discontent young Italians. Some of these Italians have already turned to violence. Unhappy young Italians may well have discontent parents too. Italy’s families are having to eat into savings to look after the nearly two million unemployed Marios and Marias.
One way of resolving the problem of unemployment in the 25 and 34 age group is to encourage employers to hire people permanently. Only Italian companies will not for two reasons: the poor economic situation and the fear that they cannot be rid of poorly performing employees. Maintaining profit levels may be a third reason as the excess of demand in the face of supply in Italy’s job market means that there is always someone to replace employees who may have to be taken on permanently if their contracts are renewed. This means salaries can be kept low and profits can remain high.
Others may argue that the cost of employing people in Italy is far too high – which is another reason why Italy’s companies are reluctant to employ more people. Letting people go can be costly as well.
Some Italian workers (and the unions, perhaps) fear that unscrupulous bosses will use the threat of easy dismissal to make them work their socks off, or else sackings will take place for trivial reasons.
The government is seeking to allay employee and union fears by saying that safeguards will be put in place to ensure that arbitrary sackings cannot occur. Hopefully, some kind of ombudsman or employment tribunal will be set up to which employees who feel they have been unfairly dismissed can appeal.
Actually passing labour liberalisation legislation is going to be an uphill struggle for the Berlusconi government which is already facing union opposition and the threat of general strikes.
It is to be hoped that differences can be overcome and that Italy’s employment legislation can be updated to the satisfaction of all concerned without sparking incidents of terrorism.
If implemented properly, reforms to Italy’s employment market could freed it up and this just might be one factor which will help Italy’s economy back onto the road towards growth.
Time, as usual, will tell, as will sensible reforms.
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