Ancillary labour: The Italian problem solving

During the last two months, it seemed Italian political talk shows were refusing to go on air if they didn’t have at least a section focusing on INPS’s voucher, the instrument aimed at regulating ancillary work. Moreover, on January the 11th, the Italian Constitutional Court issued an admissibility judgement about a referendum to abolish this instrument, strengthening the craving of information and opinions. In the end, right now vouchers (in Italian, Buoni lavoro INPS) are one of the most discussed topics in the ongoing process of restoration that is following the ending of Matteo Renzi’s government. As often in in political debates, the discussion isn’t evolving hand in hand with clear and unambiguous information both on tv shows and internet.

Vouchers were introduced by the second government of Berlusconi with the “Biagi” law in 2003, but they have been an unusable instrument until the second Prodi government, which in 2008 defined boundaries to the usage of this instrument. In particular, there were strict rules about the eligibility of sectors, workers and a cap of 5000 € paid by vouchers per year per worker. They were thought as an instrument aimed at transforming undeclared ancillary casual works into declared ones, mainly for students, retirees and housewives. The activities that were originally considered where the ones that have been traditionally paid under the table, for example housekeeping and babysitting, private tuitions and most importantly agricultural activities affected by a strong seasonality, such as grape harvesting. The vouchers were a very flexible instrument, and they still are: the employer could easily buy a voucher of 10 € and use them to pay the worker, who could easily cash 7.50 €, while 2.50 € would cover social security contributions, insurance and the cost of operating the service. In practice the government tried to solve the long-standing problem of cash to hand payment in some sectors, shifting it to a “voucher to hand” payment. Since there’s no tax payment foreseen, the regulatory purpose was then the protection of some special kind of workers and the de-shadowing of the informal economy in some specific sectors. Problem solved.

The path that drove this instrument to be so controversial is the result of a first expression of the Italian problem solving: try to solve a problem with what is disposable, even if it was not shaped for that purpose. So, from 2008, every government changed the voucher’s legislation in order to regulate other jobs: first Berlusconi’s government in 2009 increased the number of sectors in which they were usable. The “Fornero” law of the Monti government enlarged the boundaries with respect to both kind of worker and sector, including factory production and construction industry, where misuse is potentially more common. In 2013 the Letta government stated that the nature of the service could be attributable to simple ancillary labour, erasing the casual labour requirement; finally, the Renzi government in 2014 reshaped the whole vouchers’ legislation into its current form, with further enlargement of the set workers and sectors involved, almost every productive sector, and an increased cap of 7000 € per year per worker (2000€ from the same employer). The result of this reiterated deregulation is a chaos of instrument’s abuses, that are systematically shown on tv political talk shows and newspapers: the story of the construction worker who is payed one hour per day in vouchers, that is used just in case of labour inspectorate check, and the other 8 hours under the table; the one of the office worker paid in vouchers for 6 continuous months from November to March, thus in two different years, in order to avoid the yearly cap, without any day of leave, sickness and any kind of protection; the ones of all the workers in food and touristic services sectors that are obliged to be paid in vouchers instead having a proper contract for the touristic season.

With the change of regulation also a shift in the regulatory purpose seems pretty clear, from protection of some workers to high flexibility for firms. A shift, which can also push up the employment statistics. Having a look at other European countries, we have some examples of how they pursued the aim of regulation of some jobs and the need of flexibility. In France they are using an instrument similar to vouchers, but it’s restricted to only housekeeping jobs, and provides protection to the worker whose cost is split in half between the government and the employer. The strong restriction allows a large use of a sort of on-call contract in food and touristic services. Three kind of minijobs are the German solution to the problem of regulation and protection of ancillary labour: the households oriented minijob that regulates the housekeeping jobs; the “short term” minijob for jobs that last at most 50 days per year; and last, the business minijobs that are very common in the tourism and restaurant sector, as well as shops and malls, but also in small and medium enterprises. The minijob instrument is widely used and starting from 2003 it is giving great results in terms of occupation, reduction of labour costs and protection of the ancillary labour, while still allowing for the needed flexibility. Both the German and the French solution leave some gaps in which misuse exists, but the law states clear sanctions and anyway the instrument is usually so convenient that misuse is not worth the risk. Problem solved.

Vouchers’ current legislation is objectively leaving room to misuse, as also INPS communicates. Here we get to the second expression of the Italian problem solving: the slate clean solution. The main Italian trade union, Cgil, won their battle to obtain a referendum to abolish vouchers. At the same time, they are proposing a popular legislative initiative called “charter of universal labour rights” (carta dei diritti universali del lavoro), which contains an alternative ancillary work regulation. Still this proposal is not included in the referendum, which can only be repealing, hence the potential win of Cgil would cause a legal vacuum that will bring back to black economy all that jobs in which vouchers are the only legal alternative, leaving for example thousands of workers without insurance. Cgil argues that the legal vacuum would be temporary and dependent on the willingness of the parliament to approve a solution, preferably its own – Cgil’s – solution, and that the vouchers are too ill to be saved by reforming once more their rules. The government responds in the person of the Minister of Labour, Giuliano Poletti, who says that the importance of vouchers in fighting black labour is not deniable, but that an adjustment of this subject is needed. From a political stability’s perspective, a referendum is always a risky tool since it drains the parliament from political responsibility, and allows it to take advantage of the outcome using the “will of people” argument: If vouchers will be abolished, the need of a new ancillary labour law will be very urgent, but every government could hide their responsibility saying that that’s not the popular will. On the other hand, if vouchers are maintained, the government could say that the vouchers legislation is perfect, since it’s exactly what people want. Both cases, ancillary labour will not be regulated in a proper way and Italy will have lost the opportunity of a political discussion to positively reform a bunch of our labour market. Problem solved.

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