Italy employers' head now supports labor reform

Reuters News
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Posted: Apr 12, 2012 2:52 PM
Italy employers' head now supports labor reform

MILAN (Reuters) - The head of Italian employers' lobby Confindustria said on Thursday that she supported Prime Minister Mario Monti's labor reform proposal only a week after she defined it as "very bad".

"We wanted something different on the firing rules, but because of our great sense of responsibility, we will limit ourselves to making some requests for minor changes to the reform proposal," Emma Marcegaglia said at a conference.

Just last week, in an interview with the Financial Times, Marcegaglia had criticized the text of the reform, saying Monti had weakened it by agreeing to scrap a measure easing firing rules.

Threatened by a nationwide strike by the CGIL, Italy's biggest union, and pressured by the Democratic Party, the government's second biggest ally in parliament, Monti agreed to water down his original proposal.

The new rules give courts the power to order employees to be reinstated when the business reasons used to justify a dismissal were deemed "manifestly inexistent". The original text foresaw only a compensation, not reinstatement.

Italian media said Monti had privately blamed Marcegaglia's earlier negative comment on the labor reform for helping to drive bond yields higher. Monti's office denied the reports.

Marcegaglia defended her previous critical comments, saying they reflected the opinions of the lobby's members.

"Confindustria's criticism of the labor market reform is not a personal dispute, it stems from concerns expressed by hundreds of businesses," she said.

Debate over the bill, which may take months to pass through parliament, began in the Senate on Thursday. In a letter to the Wall Street Journal published this week, Monti said the labor reform "will have a major and positive effect on the economy".

Marcegaglia said Confindustria would ask parliament and the government to make minor changes to the reform that will make it less "rigid".

(Reporting by Giulio Piovaccari and Valentina Za in Milan; Writing by Steve Scherer; Editing by Alison Williams)