Italy labor reform: more costs, but flexibility

AP News
Posted: Apr 04, 2012 2:12 PM
Italy labor reform: more costs, but flexibility

Italy's government presented details of its contentious labor market reform Wednesday, saying that while it allows for workers to be fired more easily it also provides more employment opportunities, particularly for the young.

Premier Mario Monti and Labor Minister Elsa Fornero outlined the proposed legislation after winning backing from three major parties Tuesday night. Monti said he expects that in light of such support, Parliament will approve the reform package "as quickly as possible."

Italy's largest labor confederation, Cgil, has not dropped its opposition and has pledged a general strike. There was no immediate comment from Cgil after the details were presented Wednesday.

Among other things, the reform includes the contentious issue of making it easier to fire workers together with other measures to bring more young people into the work force and end discriminatory measures against women.

Monti said the aim is to boost employment and promote economic growth, pillars of his agenda that have become more urgent after Italy formally entered into recession in the first quarter and registered a 9.6 unemployment rate in the last quarter _ or 32.6 percent for Italians aged 15-24.

"It's a labor market reform for growth and employment," Monti said.

A key aim, he said, is to eliminate the "dualism" of Italy's current labor market, whereby certain employees essentially have jobs for life while young people in particular are subject to unstable part-time contracts or shut out from professions entirely.

Fornero acknowledged the difficulty Italians may have in accepting the changes, particularly over making it easier to fire workers. But she said: "The world has changed, and we have to try to adapt to a changed world."

She said she plans to travel across Italy to explain the changes to ordinary Italians, focusing on university students and unions who have been most opposed.

The overhaul of the country's labor practices is a key part of Monti's economic reforms and one closely watched by the financial markets. Rigid rules on hiring and difficulties in firing have long been considered discouragements to foreign investment in Italy and have spurred Italian companies to go elsewhere to find more flexible market regulations.

The proposal to make it easier to fire workers had already been watered down to meet demands by parties of the left.

Political leaders agreed on a compromise that would raise the burden of proof on an employer to supply reasons why he can't rehire a worker fired due to economic difficulties. Monti's original measure allowed only for damages if financial difficulty was not proven.

The measures also call for either damages or reinstatement in cases where discrimination is proven, or if a disciplinary action was not justified.

Ahead of the official presentation of the reform, left-leaning lawmaker Antonio Di Pietro denounced Monti in parliament for claiming the economic crisis was over while Italians were committing suicide. He said their deaths should weigh on Monti's conscience.

Italian media have reported suicides of two Romans in recent days that they attributed to the crisis.

Asked if he intended to respond to Di Pietro, Monti replied tersely: "No."