Labour Law and Sabaf Spa

SABAF SpA and the Italian labour reform

Introduction

Rapid globalization and the increasing competitiveness of emerging market have called for the change in European Social model. To that extend, each country in the European Union (EU) has implemented its own labour reform starting in the 1990s.

This paper attempts to answer the question “In what ways, if at all, will the potential reform of Europe’s “social models” affect the strategies of firms located in Western Europe and their domestic and international competitiveness?”. To address this question, an Italian company SABAF SpA is selected as an example of corporate which operates successfully in the rigid employment environment. In order to provide thorough analysis for the answer, we first look at the employment environment in Italy; how SABAF flourishes in such environment. Then we will look at the pros and cons of the Italian labour reform in recent years; its effect on SABAF’s performance and how the company copes with the change; then further research results of the impacts of reform are presented. Finally the answer to the main question is given in light of the analysis.

Labour environment in Italy

In Italy, trade unions have strong presence. An employee has the right to belong to a union, even in non-unionised companies (Business Link, developed with EUGO, 2010). The Tripartite Intersectoral Protocol signed by the social partners in July 1993 regulates the structure of collective bargaining which states that decentralization of collective bargaining is accepted, but within strict limits imposed by the “national contract”. The new Government which took office in 2002 harshly criticized the Protocol for being anti economical and proposed solution of decentralizing bargaining to weaken the strength of union. However, the reforms were only pursued on a voluntary basis, not via legislative intervention. In this context, labour law has traditionally developed to sustain the unions, never substituting...