Divisions open in Renzi's party over Jobs Act

Article 18 change 'from Mars' says Bersani

(ANSA) - Rome, September 18 - Premier Matteo Renzi's signature Jobs Act caused cracks in his Democratic Party (PD) Thursday because of a proposed change to a key element of job protection that has long been seen as a sacrosanct right by leftists and unions but a sacred cow by employers who say it stops firms growing and scares foreign investors.

The Jobs Act approved at committee stage progressively raises safeguards for new hires, slashes the plethora of temp contracts currently plaguing entry workers, establishes a minimum wage and universal unemployment benefit, and aims to make Italy's largely unused job centres effective tools for first-time job seekers and those who have lost their jobs. But it is the prospect of easier firings for new hires, because of a scaling back of Article 18 of the 1970 Workers' Statute, that poses the risk of a damaging split in the PD. Article 18, which critics have long depicted as a drag on employment, states that companies with over 15 employees that fire someone without just cause must give them their job back.

But an enabling law being presented to the Jobs Act seeks to change the regulations so that newly hired workers will not have the right to their jobs back, but will get compensation, if a court rules that they have been unjustly fired by their companies. Many past Italian governments have tried to amend Article 18 on the grounds that it makes companies reluctant to offer regular steady contracts, as it is so hard to get rid of a staff member once on the books. This has been blamed for high unemployment levels, especially among young people, and the fact that most new entrants to the job market are hired on freelance or temporary contracts that give few rights and low job security. Proponents of the change often claim that the clause has virtually become a dead letter, with only some 3,000 petitions filed each year. But that figure would be much bigger, experts say, if companies were not afraid of losing disputes. Liberal judges mostly find in favour of workers in most Italian regions, according to statistics.

Critics of the change argue that putting more workers out of a job is the last thing the economy needs with steepling jobless rates and flatlining consumption that had led to deflation. Unemployment in Italy has climbed to over 12% and more than four in 10 under-25s are out of work. In the past Italy's trade unions, backed by the PD and its Communist and Christian Socialist predecessors, have always managed to fend off attempts to change a regulation that they say guarantees a basic right. In 2012, then premier Mario Monti's plans to overhaul Article 18 were stymied in the first outright mutiny by the PD against his technocratic national unity government.

The revolt was led by Renzi's predecessor as PD chief, Pier Luigi Bersani, who backed a union alarm raised most loudly by the biggest and most leftwing federation, CGIL. On Thursday, amid union sabre-rattling about a general strike, Bersani again spearheaded the internal dissent against the reform. "It's absolutely indispensable that the government tells parliament what it intends to do in its enabling decree on the labour market because it's a serious issue," Bersani said. "I read intentions attributed to the government in the newspapers that look surreal to me. In some cases they describe Italy as it if were seen from Mars". PD Senator Francesco Scalia hit back on behalf of the government. "I don't find anything surreal about the intentions of the government in the enabling law," Scalia said. "What is very real are the unemployment figures".

But Bersani was not the only senior PD member worried about the reform plan. "Renzi's idea seems to be to cancel Article 18 and I don't agree with that," PD MP Cesare Damiano, the chair of the Lower House's labour committee, told financial daily Il Sole 24 Ore. "The party's position will have to be clarified at the meeting due to be held at the end of the month. I don't think it's right to give firms freedom to fire at this time of maximum unemployment". PD Chairman Matteo Orfini also expressed reservations. "The headlines of the Jobs Act can be agreed with, the details less so," said Orfini. "Mayor corrections are needed to the text". Despite the opposition - augmented by the leftist SEL and anti-establishment M5S parties storming off the committee - Labour Minister Giuliano Poletti said the government did not intend to amend its text, adding that now it was up to parliament to start examining it. The Senate labour committee OK'd the bill and Poletti said he was hopeful the reform could reach the floor of the Upper House next week.