* Monti's ratings tumble after labour reform plan
* In downturn appeal of job protection is even stronger
* Past labour conflict means Italians mistrust employers
* Labour experts doubt reform will curb "dual" labour market
By Gavin Jones
ROME, March 27 Prime Minister Mario Monti's
labour reform plan is unpopular even among the young Italians it
aims to help, who don't believe his message that it will create
a fairer, more dynamic jobs market and boost employment.
Italians not only dislike the reform, which makes it easier
for firms to fire and gives them financial incentives to hire
permanent workers rather than temporary staff - but for the
first time they are also starting to dislike Monti's government.
Young people are sceptical that easing firing restrictions
will lead firms to hire more, and in the current economic crisis
the appeal of strong job protection is even greater.
About 67 percent of Italians gave a negative judgement of
the reform agreed by the cabinet last week, according to an
opinion poll by the ISPO agency published on Sunday in Corriere
della Sera newspaper, while just 29 percent liked it.
The approval rating of Monti's technocat government dived to
44 percent from 62 percent only three weeks earlier.
Other polls give similar findings, confirming that Italians
doubt Monti's claim that his plan can level out a two tier
labour market that gives too much protection to older, salaried
workers and few prospects or rights to millions of mostly young
workers on temporary contracts.
The reform proposes reducing protection offered by article
18 of the labour statute. This stipulates that firms with more
than 15 employees must reinstate workers judged by a court to
have been wrongly dismissed, with full payment of lost earnings.
Trade unions say article 18 is a basic principle of workers'
rights, but it leads to the "duality" of Italy's labour market,
because it does not apply to a growing army of mostly young
workers with temporary jobs or those in small companies - making
up between 50 and 65 percent of the workforce.
"The paradox is that it's not just the insiders that want to
keep article 18 as it is, but also many temporary workers and
the unemployed who should have most to gain by reforming it,"
said Giorgio Navaretti, economics professor at Milan University.
This was confirmed by ISPO President Renato Mannheimer, who
told Reuters there was little difference in the poll's findings
between older, protected workers and young, unprotected or
"They are afraid, they don't believe this reform will help
them and they are obsessed by the idea of getting a permanent,
protected job," he said.
Navaretti said many so-called "precarious" workers make no
link between their own plight and the strong protection given to
those with permanent jobs, while the aspiration of future job
security is even greater at a time of uncertainty when youth
unemployment has hit 30 percent.
Renato Fasano, a 28 year-old consultant with a financial
services company, is typical of the precarious worker - unable
to plan his future or obtain a mortgage - who should in theory
benefit from Monti's reform.
He is one of thousands who, despite working full time for
the same company for years, are obliged to register as self
employed to save costs for their employer, yet Fasano does not
expect the changes proposed to article 18 would help him.
"I don't believe that if companies can fire more easily they
will hire more regular workers and even if they do, then what is
the benefit? They could fire you before as a temporary worker
and now they will fire you as a permanent one," he said.
Antonio Marchi, 38, works for a company offering catch-up
courses and other services for university students. He has never
had a regular contract and when business slowed, his employer
halved his pay and told him he could leave if he didn't like it.
"I have been working for the same company for 10 years, but
without a proper contract I can't even get hire purchase to buy
a washing machine for 50 euros a month for a year."
Marchi said article 18 was "for the privileged", yet he also
rejected the idea that companies will hire more if its
protections are reduced. "That argument doesn't stand up. You
don't get more hires by making it easier to fire," he said.
Labour law professor Tiziano Treu, a labour minister in the
1990s, said Italians' unwillingness to give up the benefits of
article 18 was partly due to bad industrial relations and
hostility towards most employers.
"There has been a long tradition of labour conflict and many
workers believe, with some reason, that companies aren't
interested in investing or growing and won't hesitate to offload
staff just to reduce costs," he said.
LACK OF TRUST
Navaretti agreed that there was "very strong scepticism and
lack of trust in companies' ability to invest and create jobs".
He said this was partly justified by an industrial structure
of small, undercapitalised, family-owned firms, but was
amplified by almost blanket media portrayal of Italy's industry
as "washed up, uncompetitive and only wanting to fire people".
President Giorgio Napolitano tried to reassure Italians when
he said after the government presented its reform plan that it
would not result in "an avalanche of firings".
Even economists that applaud some aspects of the reform have
doubts that it can curb the dual labour market as planned.
Navaretti said Monti should have abolished or strongly
limited temporary contracts rather than just introduced
disincentives to use them.
Labour expert Tito Boeri, an economics professor at the same
Bocconi University where Monti was rector, said firms are likely
to continue hiring on temporary contracts and simply pass on to
workers the higher costs they will entail by cutting their pay.
Monti argues that article 18 in its present form deters
foreign investment, yet Treu said the issue is largely symbolic,
since around 90 percent of workers who were offered the
possibility of reinstatement chose to take compensation instead.
Italy's largest union, the CGIL, which fiercely opposes
Monti's plans, said that of 31,000 cases it had brought on
behalf of workers for wrongful dismissal in the last four years,
only 70, or around 0.2 percent, had resulted in reinstatement.