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In the early months of 2002, various Italian internet and other 'new economy' businesses reacted to the crisis in the sector by threatening job losses or closures. As a consequence, workers approached the trade unions and resorted to innovative forms of action and communication. Are we therefore witnessing the birth of industrial relations in a sector to date largely based on the individual employment relationship?
The widespread collapse of share prices and the bursting of the speculative bubble that arose around internet businesses at the end of the 1990s have thrown the 'new economy', a sector with a driving role in economic development, into crisis. It may be that this is a 'crisis of growth', and that new technologies will continue to spread and change the organisation of economic activities. However, whatever the case may be, in Italy as elsewhere in Europe a curious phenomenon can be seen: the same businesses that only a few months previously prompted talk of a skill shortage now find themselves having to make redundant highly-skilled workers, many of them only recently hired, or having to make substantial wage cuts (SE0202107F).
The first case that attracted media attention in Italy was the job losses announced by Matrix, the company which runs Italy's largest web portal (IT0202101N). The Matrix workers defended themselves with traditional means, such as joining a trade union and strike action, as well as innovative ones like creation of a dedicated website and media initiatives. As a consequence, the job losses were suspended and restricted to those workers who voluntarily accepted the severance bonus (equal to seven months' wages, or EUR 4,500) offered by the company and their end-of-service allowance (Trattamento di fine rapporto, Tfr - a portion of a worker's pay set aside by the employer and then paid as a lump sum at the end of the employment relationship) matured to date. Recourse to 'social shock absorbers' (such as mobility lists) - the schemes which cushion the effects of redundancies and restructuring in some sectors (IT9802319F) - was not possible because, according to the National Institute for Social Insurance (Istituto nazionale di previdenza sociale, Inps), they do not apply to 'dot.com' businesses. A number of unions, however, contested this decision by Inps.
The Blu crisis
In early 2002, the case of Matrix has been joined by others in the new economy. The most striking of them is that of Blu, the fourth-largest national mobile telephony operator. Founded in 1999, the company has acquired a significant share of the market by pursuing an aggressive and innovative commercial policy. It now has more than 2,000 employees in various branches and 2 million subscribers, and accounts for around 10% of new mobile phone activations. Despite the company's relatively good positioning in the industry, its main shareholders (Autostrade, Benetton, British Telecom and Mediaset) have decided to disinvest and sell off the company. Because of the state of the market, a single purchaser has been impossible to find, and the company may be broken up and sold, or it may be liquidated. Jobs are therefore at risk. Already, around 100 work/training contract s and numerous temporary agency contracts have not been confirmed. The 750 work/training contracts at the company's call centres in Florence and Palermo, which expire in 2002, are also threatened, as well as the 800 or so employees on open-ended contracts. Because the company is less than three years old, its workers are not eligible for mobility allowances.
The trade unions represented at Blu are Slc-Cgil, Fistel-Cisl and Uilte-Uil- the communication workers' federations affiliated to the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil). They requested and obtained meetings with company management and with the Minister of Communications, at which they argued that breaking up the company would be a serious error, with harmful consequences for the sector as a whole, and asked for talks to be held so that 'this situation can be halted and reversed'. Because this request was not granted, the unions called a nationwide company strike on 1 March 2002, along with a demonstration in Rome attended by more than 1,500 people, joined by representatives of various political parties and some of the municipalities where Blu has branches.
At the same time, a group of Blu workers created a website dedicated to their situation. The strike and the Rome demonstration attracted media interest, two questions were asked in parliament, and the Cgil general secretary, Sergio Cofferati, pledged his union's support for the workers during a visit to Palermo. While the Minister of Communications has declared that he cannot intervene, the partners have refinanced the company so that it can continue in business for a few more weeks while awaiting developments.
Other critical cases
Besides Matrix and Blu, other cases of new economy companies in difficulties have been reported in the first months of 2002. Freedomland, a Milan-based company which has tried to launch internet television (access to the web via a set-top box) in Italy, has announced, after serious corporate and legal problems, its intention to make redundant more than one-third of its 60 employees: negotiations between the unions and the company are currently in progress.
The Ipse consortium (600 employees), which runs call centres and possesses a universal mobile telephone services (UMTS, or 'third-generation' mobile telecommunications) licence, intends to close its Rome call centre which employees 100 or so fixed-term workers, and the company's future is in jeopardy because of the losses accumulated by its main shareholder - the Spanish-based Telefónica- in the Argentinian economic crisis. The two Italian subsidiaries of the UK-based multinational Marconi, which operates in network infrastructures and mobile telephony, have announced around 800 redundancies out of a total workforce of 3,200. This is the Italian 'contribution' to the group's global workforce reductions (14,000 redundancies world-wide) made necessary by severe indebtedness. The unions maintain that the crisis is 'conjunctural' in nature and reject the redundancies, declaring themselves instead ready to bargain to use the ordinary wages guarantee fund (one of the 'social shock absorbers') to ride out the crisis, as well as training and retraining courses, with internal employee mobility. In this case, too, a strike has been announced.
Commentary
When the first signs of the crisis of the new economy became apparent, the most observant commentators pointed out that would give increased weight to trade unions and industrial relations in a sector in which the predominant practice was individual management of the employment relationship (TN0108201S). Current events in Italy confirm these predictions and suggest that they should be developed further. A first point of interest is the recourse to the unions made by young and well-educated workers, highly skilled and culturally far away from unions' normal working class traditions. This type of phenomenon was already discernible in the pre-internet information and communications technology (ICT) sector, for example in the restructuring of IBM's Italian subsidiary during the early 1990s. A second interesting point is the use of new technologies and professional expertise as instruments of collective action suited to the information society, exemplified by the creation of websites by mobilised workers. A third notable point is the ability to the unions to respond to demands by these workers, even if their attitude to the trade union organisations is not entirely uncritical.
A problem to be addressed by the actors is the fragmentation of representation characteristic of the sector in Italy. The new collective agreement for telecommunications workers signed in 2000 (IT0007158F), which should have covered the new economy, has not been extended to all companies in the sector. Furthermore, considering the cases mentioned above, workers at Matrix and Freedomland are organised by the commerce sector unions, those at Blu and Ipse by the telecommunications unions, and those at Marconi by the metalworking unions. On the employers' side, the situation is even worse: the sector's various industry associations (Federcomin and Assinform) do not concern themselves with industrial relations, so that employers lack representation.
Although there are numerous problems to be tackled, it may be that the current crisis will create the conditions for unitary representation to develop on both sides. The rationalisation of industrial relations is necessary, amongst other matters because it may thus be possible to define fair criteria for access by new economy businesses to the 'social shock absorbers'. (Gabriele Ballarino, University of Milan)