Italy: the impact of inflation on minimum salary levels is upsetting the social climate in certain sectors and has re-ignited the debate over collective negotiations

Tensions are brewing in the rubber-plastics sector. The national collective agreement intends for previously agreed (last year) salary rises to be revised according to the observed inflation rate, but it turns out that inflation rose by less than expected in 2016 and the social partners have been left divided on this issue. In contrast, in the chemicals-pharmaceuticals sector this issue was resolved before the summer. Other sectors and stakeholders are closely following developments whilst unions and employers are currently in the process of reflecting on reforming the collective negotiation model itself.
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The slowdown in inflation raises a problem for Italy’s social partners. Most national collective agreements take rises in the cost of living into account when defining minimum salary levels. What is meant to happen when the observed level of inflation comes in well below that which had been previously penciled in? Several sectors had expected 2016 inflation would be 1.1% but in fact it was only 0.1%.

Impasse in the rubber-plastics sector (approximately 140,000 employees). After having met the Fi

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