Economic crisis and the politics of public service employment relations in Italy and France

Abstract

This article analyses the impact of government austerity measures on the working conditions of public employees and public sector employment relations in Italy and France. The timing and severity of these measures have differed, given the different conditions of public finances in the two countries. The impact on employment levels, wages, working conditions and pensions has generally been more pronounced in Italy than in France. The reform of public sector employment relations institutions predated the economic crisis; in Italy the aim was to limit union prerogatives and the scope of collective bargaining, in France to strengthen social dialogue institutions. But in both cases the ultimate government power to determine terms and conditions of employment unilaterally has been clearly reaffirmed.

Keywords

Austerity employment relations France Italy public sector

Introduction

Italy and France have both been hit, albeit to different degrees, by the economic and sovereign debt crisis. Both have also recently undergone significant reforms of public sector employment relations: the ‘Brunetta reform’ of 2009 in Italy, under the Berlusconi government, and the July 2010 law on the renewal of social dialogue in the public function in France, under the Sarkozy presidency. In both countries, although again with different intensity, the public sector has been one of the main targets of fiscal consolidation policies in response to the crisis. What is the relationship between these sets of events, and how have austerity measures affected terms and conditions of employment of public employees and public sector employment relations?

The analysis will show that the relationship between the economic crisis, government austerity measures and public service employment relations reform has not been linear, either in terms of timing or of content. In both countries there has been a certain decoupling between measures affecting the institutions of public sector employment relations, that to some extent predated the crisis or had different origins, and austerity programmes in response to the crisis. But recent experience once again suggests how theoretically challenging and practically difficult it is in a democratic country to reconcile fully developed trade union rights with economic equilibrium when market constraints are structurally weak. Irrespective of differences in institutional frameworks and the severity of austerity measures, the ultimate political nature of public sector employment relations is evident in both cases, a characteristic that has no equivalent in the private sector.

The next section summarizes the main features of the administrative system and public service employment relations in Italy and France on the eve of the economic crisis. We then analyse government measures in response to the crisis, with a focus on their consequences for public employees and for public service employment relations. We close with some concluding remarks.

Administrative systems and employment relations institutions

In terms of government expenditure, Italy and France have among the largest public sectors in OECD countries (OECD, 2011: 34, Fig 1.12). However, they differ markedly in terms of public sector employment share, which is notably higher in France (approximately 20% of total employment) than in Italy (roughly 15%) (Bordogna and Pedersini, 2013; OECD, 2012a, 2012b).

In the comparative political economy and welfare state literature, both countries are often grouped together, in an ambiguous position between liberal and coordinated market economies (Hall and Soskice, 2001), and in the conservative-corporatist welfare regime (Esping-Andersen, 1990); though in Ferrera’s (1996) adaptation of the Esping-Andersen model, France is included among the Continental countries and Italy in the Southern cluster.

The similarities between the two countries are also stressed in the comparative public administration literature, despite recent divergences. Both are unitary states, despite decentralization in recent decades, more pronounced in Italy than in France. Both have highly legalistic administrative systems, with their roots in the Napoleonic state tradition (Kickert, 2007). This model was originally associated with a professional corps of public employees which, according to the Weberian ideal-type of bureaucracy, entered the administration through selection procedures subject to universalistic criteria, were expected to act impartially and serve exclusively the general interest of the nation, had a formal and protected position with employment security and received a regular salary based on seniority and on rank in the organizational hierarchy.

In line with this model, for the first three postwar decades, terms and conditions of employment in both countries were unilaterally determined by the government or public authorities through legislation and administrative acts. This was (and is) not incompatible with the rights of association and to strike, constitutionally affirmed in both countries without distinction between private and public sector employees. (There are exceptions, such as police and armed forces; and regulations on the right to strike in essential public services, part of which are provided by public employees, were adopted in Italy in 1990 and in France in 2007.) In both countries, trade unions have always had a strong presence at workplace level in public administrations, although the unionization rate is much higher in Italy than in France: in the 2000s, roughly 50 percent as against 15 percent (Visser, 2011).

The trajectories of the two countries diverged in the 1980s, and even more in the 1990s. In Italy, after a controversial change in 1983, a major reform was approved in 1993, broadly inspired by the new public management (NPM) doctrine. This abolished the public law status of more than 80 percent of public employees (the main exceptions were police and armed forces), moved their jurisdiction from administrative to civil law, and made collective bargaining the main method to regulate terms and conditions of all the ‘privatized’ employees, managerial staff included, and the exclusive method with regard to wage issues. The role of collective bargaining, especially at decentralized level, was further strengthened by a second wave of reform in 1997–1999, the so-called ‘second privatization’. This extended the contractualization of the employment relationship also to top state managers, previously excluded, enlarged the scope of negotiable issues, especially at decentralized level, and relaxed the centralized controls on collective negotiations by the government and the Court of Auditors (Bordogna and Neri, 2011; Ongaro, 2011). However, the implementation of these changes had unexpected and perverse effects, with a much higher wage drift at decentralized level than in the private sector and encroachment on managerial prerogatives on work organization and employment issues by trade unions and workplace representatives (Dell’Aringa and Della Rocca, 2007). This paved the way for a new wave of reform on the eve of the most acute phase of the economic crisis.

In France, a law was adopted in 1983 introducing forms of joint regulation between representative trade unions and the government, and was subsequently amended several times. But the right of collective bargaining was assigned a very weak status: the law merely prescribed that unions could undertake ‘negotiations prior to the determination of pay movements’ (des négociations préalables à la determination de l’évolution des remunerations) and discuss issues related to working conditions and work organization (débattre… des questions relatives aux conditions et à l’organisation du travail). The ultimate power of unilateral decision, especially on wage issues, remained firmly in the hands of the government. This power was preserved even after the July 2010 reform, which strengthened to some extent union prerogatives and enlarged the scope of negotiable matters (Bordogna and Neri, 2011; Bordogna and Pedersini, 2013).

When the crisis arrived, Italy and France differed not only in terms of objective economic conditions, but also of public service employment relations institutions. In Italy, following the NPM approach, they resembled the private sector model. In France, they largely maintained the distinctiveness typical of the Weberian administrative tradition, albeit in new forms (Pollitt et al., 2007) and despite a partial move towards NPM-inspired measures after the approval of the law on the Révision Générale des Politiques Publiques (RGPP) in 2007 (Gautié, 2012: 95).

Austerity measures and their effects

In each country the response to the crisis has been influenced by the conditions of its economy and public finances, within the constraints of the EU Stability and Growth Pact, reinforced by the Euro Plus Pact (2011) and Fiscal Compact (2012).

Italy, with a public debt always above 100 percent of GDP since the advent of the euro, is particularly exposed to any external shock affecting interest rates. This is why at the beginning of the crisis Italy did not, and could not, react with a substantial fiscal stimulus, apart from automatic stabilizers, as other EU countries did (OECD, 2010: 106–110; 2011: 140). This is also why, in the following years, severe measures have been adopted to cut expenditure and increase revenue, despite their potential negative effects on GDP. France, with a lower sovereign debt and higher credit ratings, had initially greater room for fiscal expansion (Gautié, 2012). But in December 2010, France had to adopt fiscal consolidation measures – among the most severe in the postwar period – to reduce a budget deficit that rose well above 7 percent in 2009, remarkably higher than in Italy (OECD, 2011: 109). At the end of 2012, moreover, deteriorating economic prospects brought a downgrading of the French public debt. These macroeconomic trends, summarized in Table 1, framed the austerity measures adopted by each country.

Table 1.

Macroeconomic indicators 2001–2012.

	2001	2007	2008	2009	2010	2011	2012
GDP growth (%)
Italy	1.9	1.7	−1.2	−5.5	1.7	0.4	−2.4
France	1.8	2.3	−0.1	−3.1	1.7	2.0	0.0
Public deficit (% of GDP)
Italy	3.1	1.6	2.7	5.5	4.5	3.8	3.0
France	1.5	2.7	3.3	7.5	7.1	5.3	4.8
Public debt (%GDP)
Italy	108.3	103.3	106.1	116.4	119.3	120.8	127.0
France	56.9	64.2	68.2	79.2	82.4	85.8	90.2
Public expenditure (%GDP)
Italy	47.7	47.6	48.6	51.9	50.4	49.9	50.6
France	51.7	52.6	53.3	56.8	56.6	55.9	56.6

Source: Eurostat (2013).

Italy

Almost every year since the onset of the crisis has seen extraordinary financial manoeuvres in addition to the usual budget law. Three major austerity packages were approved under the Berlusconi government: in summer 2008, in late spring 2010 and – comprising two interventions – in July and August 2011. Between the July and August measures the crisis of the Italian sovereign debt escalated and the European Central Bank, in a letter at the beginning of August, pressed the government ‘to take immediate and bold measures to ensuring the sustainability of public finances’. In particular, the July 2011 package should be frontloaded by at least one year, to reach a balanced budget in 2013. The government was also encouraged ‘to consider significantly reducing the cost of public employees, by strengthening turnover rules and, if necessary, by reducing wages’ – although measures in this direction had already been adopted in 2008 and 2010. After the collapse of the government in November 2011, further measures were decided by the Monti cabinet at the end of 2011 and in 2012, and confirmed in broad substance in the first months of the Letta coalition government which took office in April 2013. Partly independently, but partly intertwined with these measures, other pieces of legislation were approved, more directly addressing the institutional framework of public service employment relations (notably the ‘Brunetta reform’ mentioned above).

Most measures affecting public personnel have been of the ‘cheese-slicing’ type (Pollitt, 2010), that is across-the-board cuts or freezes aimed at reducing the main components of the total public sector pay bill. We can distinguish between provisions targeting wages and salaries, and those aimed at reducing employment levels. Other measures, with indirect but important effects on sections of public employees, consisted in substantial cuts in financial transfers from central government to regions, provinces and municipalities, amounting to 0.36, 0.49 and 0.47 percent of GDP over the 2011–2013 period (OECD, 2011: 143); specific saving programmes also affected the health sector. A wide-ranging reform of the pension system was approved by the Monti government in December 2011. Finally, in accordance with the Europlus Pact and the Fiscal Compact, the principle of structural balance of the public budget has been introduced in the constitutional law of the Republic in April 2012, to take effect from January 2014.

Wages and salaries

Measures controlling public sector wage increases were first adopted in 2008, strengthened in 2010–2011 and extended in 2013. They affected all factors potentially influencing pay levels: national and local negotiations, individual increases and career progression. As already mentioned, the wage increases of the bargaining rounds between 1998 and 2007 had been unexpectedly high. The new legislation imposed very moderate increases for the 2008–2009 bargaining round in national industry-level negotiations, only half the level agreed in 2004–2005 and 2006–2007, and even revoked existing agreements if they exceeded the inflation target planned in the state budget law of the period (ARAN, 2011, 2012). Moreover, the 2010–2012 national wage round for both managerial and non-managerial staff was simply cancelled by a decree law of May 2010, with no possibility of recovery in the following rounds. Subsequent legislation allowed extension of this freeze to 2013 and 2014 by simple administrative decision, effectively cancelling two entire national wage rounds for almost all public employees.

Other measures affected decentralized negotiations, the main source of wage drift in the previous years. These were not frozen, but, according to the legislation approved in summer 2008, were subject to stricter financial constraints than in the past, including a ceiling on the cost of local wage agreements based on that in the year 2004, minus 10 percent. The only other possibility open to local negotiators was to use a limited proportion of efficiency savings, after certification at central level.

The salary of each employee was not permitted to exceed the level of 2010 in the 2011–2012 period, later extended to 2013 and 2014, with the partial exception of the variable component linked to merit or performance. This also blocked increments linked to career promotion. Similar rules were adopted for those personnel still under the public law regime: increments based on seniority or career progression were frozen for three to four years, with no possibility of recovery at the end of the period and with effects also on future pension payments. Finally, the end-of-service allowance for all public employees was significantly reduced from January 2011, with effects in the years to come.

Further measures introduced in 2010 affected higher salaries, with 5 percent cuts for those with a gross salary between €90 and 150 thousand a year, and 10 percent for any salary exceeding €150 thousand; but these measures were repealed by the Constitutional Court at the end of 2012, on the grounds that they implied a discrimination between public and private sector employees.

Overall, the restrictions on pay increases have proved effective (ARAN, 2011, 2012). Wage and salary increases for the 3.4 million public employees, managerial staff included (with the partial exception of judges) were significantly lower in 2008–2009 compared to 2000–2007, effectively frozen since 2010, and are expected to remain close to zero until the end of 2014. The wide gap in wage increases compared to the private sector in 2000–2007 was first significantly reduced and then reversed (ARAN, 2011: Table 3). In 2011, per capita wage levels, including the effect of decentralized negotiations, were actually 0.2 percent lower than in 2010, while the inflation rate was 2.8 percent and private sector pay rose by 2.1 percent (2.7% in manufacturing) (ARAN, 2012: Table 1). These trends further intensified in 2012 (ARAN, 2013: Table 1).

Staff turnover and employment levels

A second set of measures affected the filling of vacancies, managerial staff included. Legislation in 2008, reinforced in the following years, restricted replacements in the year 2009 to 10 percent of employees retiring in the previous year; this percentage was increased to 20 percent for the years 2010 and 2011, and 50 percent in 2012, with some variation across sub-sectors (for instance, universities). Expenditure on temporary staff was cut to half of the 2009 level. Special measures applied to some sub-sectors. In schools, the reduction of the total number of staff was partly compensated by policies aimed at stabilizing the number of temporary employees; conversely, employment levels in local and regional authorities were also affected by severe cuts in financial transfers from central government, as well as by the rules of the Patto di Stabilità Interno (domestic stability pact), introduced in 1998 and tightened in recent years.

Table 2 shows the effects on employment levels. At the end of 2011, the total number of public employees was 5.2 percent lower than in 2007; permanent employees decreased by 4.3 percent and temporary employees by 26.2 percent (the decrease was actually greater, because the 2011 statistics include some public entities not previously surveyed). This is the first substantial decrease since the privatization of the state railways and the postal service in the late 1980s and the 1990s. This trend is likely to continue, with an expected decline in overall employment of about 10 percent in 2014 compared to 2008. More selective cuts regarding state administrations, albeit quantitatively limited, should follow as a consequence of detailed spending review procedures approved in summer 2012. Other expenditure was also cut, such as for external consultancies and personnel training.

Table 2.

Public sector employment (000s) and wage bill, Italy, 2007–2011.

	2007	2008	2009	2010	2011
Public Sector employment	3584	3579	3503	3437	3397
Permanent employees^a	3429	3437	3376	3315	3283
Temporary employees^b	154	142	127	122	114
% of total employment	15.3	15.5	15.3	15.0	14.8
Public sector wage bill (€billion)	157.81	167.85	169.09	166.77	163.59
% of GDP	10.15	10.66	11.13	10.74	10.36

Including school teachers with one-year contract and some groups of non-permanent employees of police corps and armed forces.

Temporary contracts include fixed-term, trainee and agency contracts, and ‘socially useful’ work. The latter two groups are not strictly dependent employees of the public administration.

Source: MEF (2012).

The restrictions on replacements may have qualitative effects on the organization and provision of public services, in a double sense. First, the constraints, in conjunction with the cuts in temporary contracts, may affect the age and skill composition of the workforce (Vaughan-Whitehead, 2012). Second, staff shortages may induce some public administrations to externalize activities and personnel, with possible deterioration of the quality of services provided to citizens.

Finally, the pension system was reformed for both private and public sector employees. The standard retirement age for female public employees was raised from 61 to 66 in 2012, in line with that of their male colleagues, following a 2008 ruling by the European Court of Justice and a recommendation by the EU Commission. The standard pension age for all employees (public and private, males and females) has been linked to changes in life expectancy, with an initial adjustment in 2013 in order to reach at least 67 by January 2021. The value of pensions was reduced by lowering the protection from inflation, and by shifting all private and public employees from an earnings-related to a contributions-related system, including the cohorts of elder workers previously excluded (Jessoula and Pavolini, 2012).

France

The impact of the crisis has been milder in France than in Italy and in many other EU countries, partly because of the lower openness of the domestic economy (European Commission, 2011). Moreover, healthier public finances (see Table 1) allowed an initial financial stimulus package of over €10 billion, which helped offset the consequences of the negative global economic trends. The stimulus package, apart from measures to sustain the financial sector, mainly involved investment in public enterprises (postal services, energy, railways), defence, strategic technologies (including substantial aid to car manufacturers) and health and social services, in partnership with local authorities (OECD, 2009: 22, Table 2). Despite such measures, which amounted to less than 1 percent of GDP, growth has remained low; current analyses stress the weak competitiveness of the domestic economy as a key factor in explaining this poor performance, rather than deficient demand (IMF, 2012; Kierzenkowski, 2009).

The unfavourable economic cycle together with increased public expenditure for anti-crisis measures raised the public deficit and debt, so that fiscal consolidation has acquired relevance, particularly in the context of the EU macroeconomic initiatives. Three areas of intervention have had the most significant impact on public employees: the 2010 reform of the pension system, the limits imposed on staff replacements and wage restraint.

Pension reform

In 2010, the retirement age for all public and private employees was increased. Notably, the system for public employees was aligned with that of the private sector, reducing a number of additional benefits they previously enjoyed. In particular, employee contributions will be progressively increased until 2020, to finance the expected growth in retirements and early departures; the early retirement scheme for employees with at least three children and 15 years of effective work will be phased out; the minimum guaranteed pension for public administration will be put in line with the private sector rules (Ministère de la Réforme de l’État, 2012: 33–36).

Staff replacement and employment levels

One of the priorities has been to contain public sector personnel costs. According to government budgetary guidelines for 2009–2011, the main means to this end has been limiting replacements to one official for every two leaving through retirement (Ministère de la Réforme de l’État, 2012: 31). This measure was introduced in the framework of the RGPP law, mentioned above, which was initiated by the Fillon government in June 2007 and reinforced in 2009. The law covered only workers in central government (Gautié, 2012: 94–96), but similar rules on turnover were introduced in the health sector (IDA, IGF, IGAS, 2012: 34). According to the report on the implementation of the RGPP, the expected reduction in staff was 150,000 workers between 2008 and 2012, some 7 percent of the central government workforce, with significant differences across ministries (CMPP, 2011: 2; Gautié, 2012: 96). The government claims that this measure enabled savings amounting to €2.3 million between 2010 and 2011. Half of the savings have been used to fund some personnel policies, such as promotions and increases in allowances (Ministère de la Réforme de l’État, 2012: 31). A parliamentary report of October 2011 highlighted that the financial impact was lower than expected, with fewer retirements than envisaged and higher expenditure on other personnel policies (MEC, 2011).

Wages and salaries

Another measure was the restriction on wage increases by constraints on the ‘index point’ (point d’indice), which represents the general instrument to adjust wages and salaries across the whole French public administration. Normally this is adjusted annually in line with inflation, but in 2010–2011 in particular, the index was frozen and the only basic wage increases were limited to the lower end of the scale. Pay rises could still be obtained through increases for specific categories, such as police and education, and individual career advancement (Ministère de la Réforme de l’État, 2012: 470–474).

As Table 3 shows, overall employment levels have remained stable between 2007 and 2010 (indeed increasing by 0.3%), with considerable variations across the three components of public administration. While central government saw a significant reduction (5.2%), local authorities and the health sector showed an upward trend (6.3 and 3.5%, respectively). In the same period, non titulaires, that is workers without a standard public employment contract, increased by 7.8 percent (while they decreased in Italy), so that there has been no substantial restraint on overall employment growth. Moreover, in March 2011 an agreement was signed between the government and all the main unions to regularize the status of non titulaires and to regulate more strictly the use of temporary contracts, in order to stop the trend towards precarization and to end abuses in the use of fixed-term contracts. This will probably contribute to stable employment levels in the next few years (Gautié, 2012).

Table 3.

Public sector employment (000s), France, 2007–2010.

	2007	2008	2009	2010
Total	5211	5211	5234	5229
% of total employment	19.3	19.4	19.6	19.5
FPE^a	2434	2356	2332	2307
FPT^b	1704	1770	1807	1811
FPH^c	1073	1085	1096	1110
of which:
Non titulaires	832	861	893	898
Militaires	345	335	327	322

Fonction publique de l’Etat.

Fonction publique territoriale.

Fonction publique hospitalière.

Source: Rapport annuel sur l’état de la fonction publique. Edition 2012.

Table 4 indicates that the slowdown in public expenditure on government employees has been limited, and mainly concentrated in 2011. There is in fact a steady upward trend, in contrast to a significant squeeze in Italy. However, the overall increases in compensations of public employees since 2000 are similar, with a rise of 37.8 percent in France and 36.4 percent in Italy (Ministère de la Réforme de l’État, 2012).

Table 4.

France and Italy. Compensation of general government employees, 2000–2011.

		2000	2006	2007	2008	2009	2010	2011
€ billion	France	191.3	233.2	240.9	247.0	254.2	259.4	263.7
€ billion	Italy	124.3	163.2	164.1	169.7	171.1	172.1	169.5
% change over previous year	France		2.7	3.3	2.5	2.9	2.1	1.6
% change over previous year	Italy		4.3	0.5	3.4	0.8	0.6	−1.5
% of GDP	France	13.3	13.0	12.8	12.8	13.5	13.4	13.2
% of GDP	Italy	10.4	10.9	10.6	10.8	11.3	11.1	10.7

Source: Eurostat, Government revenue, expenditure and main aggregates, 18 February 2013.

Austerity measures and public service employment relations

In neither country did austerity measures directly affect the institutional framework of public sector employment relations. The reforms adopted in 2009 (Italy) and 2010 (France) had endogenous reasons, rooted in previous employment relations developments in each country. Nonetheless, there have been interactions between government responses to the crisis and the reform process.

Italy

In Italy, the 2009 reform was intended to correct the unexpected effects of the ‘second privatization’, caused partly by a problem of design and partly by a failure of implementation (Zoppoli, 2008). In both cases, a fundamental reason was the lack of alignment between the large autonomy recognized for collective negotiations, especially at decentralized level, and the institutional mechanisms necessary to strengthen the responsibility of the actors, preventing collusive behaviour between the parties (Bordogna, 2008; Rexed et al., 2007).

Although unrelated to the economic crisis, the 2009 Brunetta reform, by envisaging a retrenchment of collective bargaining and union prerogatives in the public sector, provided synergies with government responses to the crisis in its first phase. This legislation did not remove the basic principles of the 1993 reform – the privatization and contractualization of the employment relationship of public employees – but the role of collective bargaining was reduced and embedded within a stricter web of rules and constraints. Employment relations and personnel practices were to some extent re-juridified, to the detriment of the autonomy of collective negotiations and partly also of managerial discretion. The two-level bargaining system was preserved, but a more hierarchical relationship between the two levels was re-established, limiting the autonomy and scope of the lower level. The scope of negotiations was reduced, especially at decentralized level, with the explicit exclusion of matters related to the organization of work and personnel issues. On these matters, widely negotiated in the previous period, the only remaining flexibility, if expressly allowed by national agreements, was for local employers to provide information to workplace representation bodies, without opening negotiations – though these constraints were partially relaxed by an agreement in spring 2012 between the Monti government and the major trade union confederations. Wage increments and promotions were made conditional on stricter performance assessment systems, in order to overcome the practices of generalized wage increases and career progression utilized in the previous period; employers and managers reaching agreements in violation of these principles could now be held legally liable and prosecuted by the state Court of Auditors. A new central authority was created to promote and monitor performance management and performance assessment systems within each individual administration. Tighter controls by the government and the Court of Auditors on bargaining procedures and outcomes, both at national and decentralized level, were re-established to monitor not only the compatibility of agreements with budget constraints but also their conformity to the basic principles of the reform (meritocracy, selectivity, transparency). Other measures involved stricter controls on absenteeism, notably higher than in the private sector, through wage reductions and tightened medical checks, and a considerable cut in time off and paid leave for union activities, to which all representative trade unions are eligible (Bordogna, 2013).

In short, amidst a campaign against the alleged privileges of public sector employees and the overwhelming power of public sector trade unions, the purpose was to restore the responsibility of public employers in collective negotiations and personnel matters, redrawing the boundaries between unilateralism and joint regulation of employment relations, in favour of the former. In this sense, the 2009 Brunetta reform and the government austerity measures addressing the crisis, although partly decoupled in their timing, were at first mutually reinforcing: the retrenchment of collective bargaining and union prerogatives pursued by the reform was consistent with the need to cut the total public sector wage bill. When the crisis deteriorated, however, the radical solution adopted by the government, as seen above, was to simply freeze for the 2010–2014 period the entire national bargaining machinery designed by the reform, also heavily affecting negotiations at decentralized level. Despite any NPM-inspired attempt to assimilate public and private sector industrial relations, under the urgency of the crisis the government utilized its peculiar position in public sector employment relations to restore unilateralism in all its potentialities. There was no such freeze in private sector collective bargaining in the same period. Incidentally, this decision provoked serious difficulties for the implementation of other parts of the reform, in particular the provisions on performance assessment of employees.

The reaction by the main trade union confederations was divided. CGIL, the largest confederation, fiercely opposed the Brunetta reform, while CISL and UIL adopted a more conciliatory attitude. A similar division occurred in response to austerity measures. However, most surprising in the latter case is the overall moderate level of union protests. There have been strikes against government measures, as against the €24.9 billion package of May 2010, that included the bargaining and wage freeze, or the one day general strike in early September 2011, against the €45 billion package approved in August. But they were called only by the CGIL, and on the whole the protest remained less pronounced than in other European countries, even against the radical reform of the pension system at the end of 2011.

The freeze of collective bargaining and social dialogue brought about by the crisis did not prevent the re-election in March 2012 of workplace representation bodies in each public bureau with more than 15 employees. The participation rate remained high (70–75%), although somewhat lower than previous elections. CGIL slightly increased its electoral support while CISL declined a little, but on the whole the three main confederations maintained their strength relative to the great number of independent unions.

France

In France, there have been intensive interventions since 2007 intended to reform both the rules of and the approach to public employment. The reforms have occurred under the last two presidencies and have seen two different approaches, with the most recent initiatives aimed at restoring the central position of public employees as the main assets for the delivery of high-quality services to citizens. Before 2012, both before and during the crisis, some economies were introduced in order to increase the efficiency of public administration (Gautié, 2012: 94–95). The new policies under the Hollande presidency, on the other hand, both imply and explicitly envisage an increase in employment and wages. The underlying perspective has therefore changed considerably: whereas within the RGPP the basic assumption was that it was possible to do the same (or more) with fewer resources, now it is acknowledged that more resources are needed to improve the effectiveness and efficiency of the public sector.

The first innovations introduced after the June 2008 Bercy agreements on social dialogue in the public administration between the government and most of the main trade unions focused primarily on the procedures of dialogue and the legitimation of trade unions; but the latest measures can be regarded more as the effects of the new approach by President Hollande and Marylise Lebranchu (Minister of State Reform, Decentralization and Public Administration).

Renewal of collective bargaining

The two basic areas covered by the Bercy agreements – implemented by law in July 2010 – are the broadening and strengthening of collective bargaining and the introduction of new rules for participation in negotiations and for the validity of agreements.

The new rules on collective bargaining provide that negotiations can cover practically all elements of the employment relationship (work conditions and organization, career paths, vocational and lifelong training, social benefits, health and safety, equal opportunities). While wages and the protection of purchasing power are negotiated at national level, all other topics can be addressed by agreements at all levels. The 2010 law asserts the principle that when lower-level negotiations apply higher-level provisions, they can only amplify or improve on the conditions set at higher level. Therefore, the possibility for decentralized bargaining to derogate from higher-level agreements is highly constrained – an issue which has been at the centre of the flexibilization of collective bargaining in the private sector in Germany and Italy, for instance, and was introduced in France with the 2004 loi Fillon. Moreover, when negotiations are not envisaged in higher-level agreements, they can take place at the initiative of the administration.

The validity of agreements

In order to be entitled to participate in negotiations, trade unions must hold at least one seat on the legally-based, elected consultation bodies pertaining to the object and level of negotiations. The law provides that, from 2014, agreements are valid only if they are signed by trade unions which together receive at least 50 percent of the votes cast in elections to the employee representation bodies in the relevant bargaining unit (see below). For a transitional period before 2014, the validity threshold was set at 20 percent of all the votes cast, as long as an agreement was not opposed by unions which together received the majority of votes in the bargaining unit.

Social dialogue bodies

The 2010 legislation has reformed the system of consultation bodies in the public sector, generalizing the principle of the election of representatives, lowering the barriers to participation in elections, raising the eligibility thresholds for representation and reinforcing the consultation system. The main participation structures whose electoral results are used for the assessment of union representativeness are the comités techniques, consultation committees which oversee the organization and functioning of services. The other bodies are: the commissions administratives paritaires (joint administrative commissions) for the fonctionnaires and the commissions consultatives paritaires (joint consultative commissions) for non titulaires, which are consulted on employment and career issues; the comités d’hygiène, de sécurité et des conditions de travail (health and safety committees), with competence over working conditions and the application of health and safety regulations. Moreover, each of the three sections of the public sector has a specific High Council (conseil supérieur de la fonction publique de l’Etat, conseil supérieur de la fonction publique territorial, conseil supérieur de la fonction publique hospitalière). Finally, the encompassing General Council for Public Administration (conseil commun de la fonction publique) is consulted on all issues regarding the three sections of the public administration.

In September 2012, another important step involved talks between the government and the trade unions to define an Agenda social de la fonction publique. The new initiatives presented by Minister Lebranchu included a further reform of public sector social dialogue, the emphasis on the ‘exemplary character of public employers’, and a revision of occupational development, career paths and remuneration of public employees. This constitutes a comprehensive programme, including an explicit commitment to the ‘model employer’ approach in employment relations and a substantial revision of all specific policies undertaken in recent years. For instance, it has been decided by President Hollande ‘to stop the global reduction of employment in public administration and re-establish the several positions which were eliminated in the latest five years in education, police and justice’ (Marylise Lebranchu, press release, 4 September 2012).

Conclusions

The institutional framework of public sector employment relations displayed similarities in Italy and France during the first postwar decades, but started to diverge in the early 1980s and even more from the early 1990s. Through a number of NPM-inspired reforms, the Italian administrative system moved away from the Napoleonic and Weberian tradition, the employment relationship of public employees was privatized and employment relations institutions abandoned the unilateralism of the ‘sovereign employer’ model of previous decades and moved towards a full recognition of collective bargaining rights. French public administration, by contrast, never abandoned its Napoleonic tradition, public functionaries are still under a public law regime and they are mostly managed through the mechanisms of the Weberian bureaucracy, despite the introduction of some NPM-inspired practices after the 2007 RGPP law. A shift from unilateralism towards forms of joint regulation of employment relations started in the early 1980s, but has been very limited and uncertain.

Against this background, the economic crisis had different effects in the two countries. In Italy, with the second highest public debt in the EU, the government response has been rapid, and the public sector has been a crucial target of austerity measures from the beginning of the crisis, even though its size in terms of employment share was (and is) notably smaller than in France, Britain and many other EU countries. Both employment conditions and employment relations institutions have been negatively affected. Employment conditions were hit in several ways, with effects on the levels of employment as well as on wage increases, promotions, end-of-service allowances and pension provision for public employees.

As a result, the total public sector wage bill started to decrease after 2010, both in absolute terms and as a percentage of GDP. As regards employment relations institutions, the Brunetta reform, independently of the economic crisis, first reduced union prerogatives and the scope and autonomy of collective bargaining in favour of a more unilateral approach but without reversing the basic principles of privatization and contractualization of public employees introduced in 1993. Since 2010, however, under the emergency of the sovereign debt crisis, the Berlusconi government simply suspended the entire national level bargaining machinery, albeit reformed by the Brunetta legislation, for one bargaining round. The Monti government abandoned the fierce anti-public sector unionism rhetoric of its predecessor and restored some forms of dialogue with workers’ organizations. But the substance did not change; some measures were prolonged (wage freeze, suspension of bargaining activity) or strengthened (cuts in employment levels), and other were added. Things have not changed substantially in the first months of the ‘grand coalition’ that took office in April 2013.

France followed a different trajectory. Advantaged by better public finances, the government could first adopt a fiscal stimulus, then approve milder and partially delayed measures in terms of staff replacements, wage increases and control of absenteeism, and finally even soften or remove part of the Sarkozy measures under the Hollande presidency. The overall number of employees has remained stable, and wage and salary increases have been little affected. With regard to employment relations institutions, the 2010 reform partially enhanced the framework of public sector social dialogue. The new rules on the representativeness of trade unions strengthened their legitimacy, allocated them a stronger role in opening negotiations and significantly enlarged the scope of negotiable matters. But agreements are still not binding on the government, which maintains its ultimate power to determine unilaterally the terms and conditions of employment of the fonctionnaires publics, especially on pay issues. The distinctiveness of public sector employment relations has not been substantially altered.

To conclude, irrespective of the contrasting severity of austerity measures, dependent on the conditions of public finances in the two countries, the main lesson that can be learned from a comparison between Italy and France after five years of economic crisis is the re-affirmation of the ultimate, irreducible political nature of public sector employment relations. Where unilateralism based on the public law status of public employees had been abandoned within NPM-inspired reforms, as in Italy, it was abruptly restored without any consultation with trade unions, despite privatization and contractualization. Where unilateralism was never entirely discarded and the public law status never abolished, as in France, these features were not abandoned even despite a significant reform for the renewal of social dialogue in the public sector. Irrespective of the different legal and institutional frameworks of public sector employment relations, and, in Italy, despite any rhetoric about privatization, under circumstances of economic emergency both cases show that the government maintains a power to decide terms and conditions of employment unilaterally, which has no equivalent in the private sector. This comparison highlights once again how theoretically relevant, and hardly tractable in practice, is the problem of striking a balance in advanced democracies between fully developed public sector collective bargaining and union prerogatives, on one side, and economic equilibrium on the other, in a context where market constraints are structurally weak.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Author biographies

Lorenzo Bordogna and Roberto Pedersini are Professor and Associate Professor of Economic Sociology, Department of Social and Political Sciences, Università degli Studi di Milano, Italy.

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