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COUNTRY OVERVIEW

There is no right in Italy for employees to be represented at board level, although there is interest in the topic. Unions and employees agreed a joint opinion on the transposition of the directive, which was subsequently accepted by the government.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

There is no employee board level representation in Italy in either the public or private sector, other than in a handful of companies which have voluntarily agreed to permit it. However, there is some interest in Italy in models of corporate governance which allow greater employee involvement at board level.

The unions and employers’ associations were deeply involved in the implementation of the directive in Italy in that they negotiated a text setting out the rules for its transposition in Italy, which was subsequently adopted by the government and passed as a legislative decree. The negotiations began early in 2003 and finally resulted in a joint opinion on the transposition of the directive in March 2005. The three main union confederations, CGIL, CISL and UIL were the signatories on the union side and the associations representing industry, banking, insurance, commerce and services signed for the employers.

The negotiations on the implementation of the directive resulted in a number of articles in the trade union and specialist press in Italy on the issue of employee involvement at board level. However, there was no wider public debate on the issue.

Form of transposition

Directive was implemented through legislation in August 2005, ten months after the October 2004 deadline. The legislation itself was based on a joint opinion agreed between the unions and employers in March 2005.

The directive on employee involvement in European companies was implemented in Italy by a legislative decree dated 19 August 2005 and published in the Official Gazette on 21 September 2005. However, the text of the decree is essentially the same as a joint opinion agreed between the unions and the employers in March 2005 after two years of negotiations. The key differences between the two texts are a number of articles, such as the penalties to be imposed for any breach of the legislation, or the consequences of any misuse of procedures, where the text agreed between the unions and employers simply asks the legislator to find appropriate solutions, while the decree sets out what will happen.

The title of the legislation is Legislative Decree 19 August 2005 No. 188 “Transposition of the Directive 2001/86/EC which supplements the European Company Statute with regard to the involvement of employees” ( Decreto Legislativo 19 agosto 2005, n. 188 Attuazione della direttiva 2001/86/CE che completa lo statuto della società europea per quanto riguarda il coinvolgimento dei lavoratori).

Special negotiating body (SNB)

Selection of national members

Italian members of the SNB are chosen by the trade union representative body at the company, in conjunction with the unions. If there is no representative body, the unions remain key in deciding how SNB members are chosen.

Italian SNB members are elected or appointed by and from the trade union representative body (RSU/RSA) in conjunction with the union organisations which have signed the collective agreement covering the company. (The RSU, the more usual form of representative structure at company level, is essentially a union body, although it is largely elected by all employees: the unions nominate the candidates for the two-thirds of the members directly elected by the whole workforce, and they choose the remaining third themselves.) SNB members do not have to be employees of the company involved, although it is not clear what this means in practice (see section on external union representatives).

If there is no trade union representative body in a workplace or a company it is for the unions who are signatories to the collective agreement at national level that covers the company to decide how the workers in that workplace or company are to “participate in the election or appointment of the members of the special negotiating body” (Article 3).

External trade union representatives

External union representatives in Italy can in theory be appointed to the SNB.

The Italian legislation says that SNB members do not have to be employees of the company involved: “members may include trade union representatives independent of the fact that they are or are not employees of a participating company or establishment” (Article 3). However, the fact that they are chosen from the trade union representative body, which normally consists of company employees, means that it may be difficult for external trade union representatives in practice to be chosen.

Financing of experts

Funding limited to a single expert.

The Italian legislation on the operation of the SNB limits funding to a single expert. It does not limit the number who can be used, stating that the SNB “may request experts of its choice, for example representatives of appropriate Community-level trade union organisations, to assist it with its work” (Article 3), but it is more restrictive on funding. Here it states in the same Article that “expenses relating to the functioning of the special negotiating body … should be borne by the participating companies to enable the special negotiating body to carry out its task in an appropriate manner”, and uses as a point of reference the costs to be borne in relation to the work of the SE representative body under the fallback procedure. These include the costs of “organising and interpreting of the meetings, the expenses relating to the costs of a single expert, and the travelling and accommodation expenses of the members” (Annex 1, Part 2).

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Italian members of the SE representative body are to be chosen by the existing employee representatives or by the employees and the unions if there are no existing employee representatives.

The Italian legislation provides for a similar approach to the election of the SE representative body, known as the representative body (organo di rappresentanza) in the text, as for the SNB, although the wording is not the same. The representative body is chosen by the existing employee representatives where they are present. They can only choose from among themselves, and – in contrast to the position on the SNB – those chosen must be employees. If there are no existing employee representatives, the members of the representative body are elected or appointed by all employees, together with the trade unions which have signed the collective agreement which applies to the company concerned. The legislation goes on to say that the method of electing or appointing representative body members should be in line with national legislation and the agreements of December 1993 and July 1994, which set up the current system of Italian workplace representation – or in line with other collective agreements if they apply in the particular industry. In other words, in most cases two-third of those elected or appointed will be chosen by the whole workforce – but on the basis of union nominations – and one third will be appointed directly by the unions (Annex 1, Part 1).

Budget of representative body

The company should bear the costs of the representative body, but it is only obliged to pay for a single expert.

The company is obliged to cover the costs of the representative body to enable its members “to perform their duties in an appropriate manner and undertake any relevant training”. This includes the costs of “organising and interpreting of the meetings, the expenses relating to the costs of a single expert, and the travelling and accommodation expenses of the members” (Annex 1, Part 2).

National procedure for the allocation of board seats

The Italian legislation leaves it to the representative body to decide on how employee representatives at board level are to be chosen. There are no specific rules for those from Italy.

The legislation does not include any rules setting out how Italian board-level representatives should be chosen under and simply reproduces the wording of the directive. It states that the representative body should decide “on the way in which the SE’s employees may recommend or oppose the appointment of the members of these bodies [the company board level structure]” (Annex 1, Part 3).

Misuse of procedures and structural change

Misuse of procedures

There should be new negotiations if, after the SE has been set up, there are substantial changes which have the aim of depriving employees of their rights.

The Italian legislation requires that if there are substantial changes after the European Company has been registered “with the purpose of depriving employee of their rights to be involved”, there should be new negotiations (Article 11).

Structural change

There is no requirement in the Italian legislation to renegotiate the agreement if there has been structural change, unless this has been done to deprive employees of their rights.

Apart from the requirement to renegotiate the agreement where substantial changes have been undertaken in order to deprive employees of their rights to be involved (see section on misuse of procedures), there is nothing in the legislation that requires the agreement to be renegotiated if there are structural changes after it has been set up.

Position of trade unions and employers

The bulk of the text of the Italian legislation was negotiated between unions and employers and both sides seem satisfied with the agreed outcome.

The majority of the text of the Italian legislation, as finally passed, is identical to the agreement reached earlier between the unions and the employers. It is therefore clear that the two sides were able successfully to resolve the differences they had.

For the unions the key concerns were that some progress should be made towards increased employee participation in their companies, or “economic democracy”, (although there are differences between the three main union confederations on how this should be achieved), but that the unions should retain control of the choice of employee representatives.

Confindustria, the main employers’ body, had previously expressed scepticism about employee involvement at board level but following the negotiations with the unions was willing to agree the joint text.

Both sides wanted the directive’s implementation in Italy to be based on a negotiated agreement rather than simply be left to legislation.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

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