The FAIRWORK project: the challenge of fair working conditions in public procurement facing the “jungle” of collective agreements

Outsourcing certain stages of the production process or support services to suppliers is common practice, both amongst private companies and public bodies. The use of such model – which can be implemented through various contractual schemes – makes it possible to reduce fixed costs and focus on the core business, as well as to obtain specialised expertise for carrying out the outsourced activities.

However, these practices also entail significant risks for the workers involved, namely the employees of the supplier company who are required to carry out contracted works or services. Particularly where the activity is “labour-intensive” – that is, when labour is by far the predominant factor of production compared to all others (as in the cleaning, security, catering, logistics or call-centre sectors) – the contractor may be tempted to seek every possible means to reduce labour costs, ultimately shifting the burden of competitiveness onto its staff.

Prof. Giovanni Calvellini

It is from this complex situation that FAIRWORK takes its starting point: the project is coordinated by Giovanni Calvellini, Associate Professor in the Department of Law at the University of Siena, and is being carried out as part of the “New Frontiers” research funding programme of the same University.

In Italy, this business strategy is facilitated by a profound critical issue within the trade union system. “The prolonged absence of a legal framework for collective bargaining stemming from the failure to implement the second part of Article 39 of the Constitution,” explains the Professor, “has led in recent decades to a veritable proliferation of existing national sectoral collective agreements (“CCNL”), of which there are now over a thousand. The vast majority of these are signed by trade unions and employers’ organisations with little representativeness, whose sole objective is to engage in a race to the bottom against the established confederations. They thus propose so-called “contratti pirata”, offering working conditions that are more favourable to businesses. This gives rise to the risk of collective agreements’ “shopping”, whereby contractors, in order to save money, choose the most favourable CCNL from the range of those signed for the sector in which they operate.

The failure to implement pasagraphs 2, 3 and 4 of Article 39 of the Italian Constitution is at the root of many problems in trade union system

Under the principle of freedom of association, Italian lawmaker cannot, a priori, prohibit “new” trade unions and employers’ organisations from signing national collective agreements, but it may establish minimum working conditions to which workers are entitled in any case; and it may do so by using, as a benchmark, the working conditions set out in collective agreements signed by the most representative organisations. In other words, it may stipulate that, in a particular sector or for a specific purpose, an employer may not offer its employees conditions inferior to those provided for in the “leader” CCNL. Thus, a company remains free to choose a “contratto pirata”, but in that case it must top up the conditions offered to its employees until they reach the level established by the most representative organisations.

This mechanism,” the Professor points out, “appears simple and decisive. However, it presents a series of considerable difficulties in its application which risks undermining the anti-dumping effectiveness of these “fair treatment clauses”, which are also provided for by Italian law in the public procurement sector”.

Article 11 of the Public Procurement Code (Legislative Decree No. 36/2023) requires any public body to specify in the call for tender the “leader” CCNL that the successful economic operator must apply to its employees working on the procurement. The same provision also allows economic operators to indicate in their bids a different collective agreement, provided that it guarantees employees an equivalent protection as the agreement indicated in the call by the public body. These general provisions are further supplemented by an annex to the Code (annex I.01), which sets out the procedures for identifying the “leader” collective agreement to be included in the call for tender and for verifying the equivalence of protection.

In the public procurement sector lawmaker has attempted to address shortcomings of collective bargaining system, but some problems remain

However,” notes Calvellini, “identifying the reference CCNL and verifying equivalence prove to be extremely complex tasks in practice. Bear in mind, for example, that in some sectors the “leader” agreement must be identified from among more than 40 CCNL currently in force, and that comparing the protections provided by two different agreements is far from straightforward”.

To tackle these obstacles, FAIRWORK aims to combine a research based on classic tools of labour law analysis with a study of the CNEL’s Archive of collective agreements and an examination of a sample of calls for tenders.

The aim,” concludes Professor Calvellini, «is to provide a precise overview of any operational shortcomings in the current wording of Article 11. This is not only to verify the possibility of overcoming de iure condendo any critical issues that may arise, but also with the aim of resolving any interpretative doubts in a matter which, due to its technical complexity, public administrations struggle to apply correctly”.