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From: Relazioni Internazionali; Politica aziendale e risultati economici; Documents in English

IBM Italy Union


 Political Situation                           page   1
 Labour Situation                                "    2
 Trade Union Situation                           "    3
 FLM                                             "    5
 Labour Conditions and Contracts                 "    6
 Social Securities                               "    9
 IBM in Italy                                    "   11
 Strategy of IBM Italy Union                     "   13
 Union Negotiation in IBM Italy                  "   14


 First IBM Union's International Meeting
 Tokyo 9/14 may 1984

                                        0


                              POLITICAL SITUATION

 In june 1983 the political elections for the Italian Parliament gave the
 following results:

      PARTY                     % of votes     seats      % of seats

      Christian Democrats             33         225           35
      Communists                      31         198           31
      Socialists                      11          73           12
      Liberals and similar            12          68           11
      Fascists                         7          42            7
      Others                           6          24            4

      Totals                         100         630          100

 The Government in charge from august 1983 is formed by Christian Demo-
 crats, Socialist and Liberals.
 The Prime Minister is the socialist Bettino Craxi.

 Since the end of World War Two Christian Democrats, representing inte-
 rests which are mainly conservativi and Catholic, have always been the
 greatest party and have always been in the Government.

 The Communists, constantly increasing since the end of World War Two,
 have never been into the Government.

 On the other hand there are many local governments (regional, provincial
 and municipale) which are formed by Communists, Socialists and Liberals;
 this is what for instance happens in large towns such as Rome, Milan.
 Turin, Genoa, Bologna and Venice.

 Italy is also a member of EEC (European Economic Community, also known
 as Common Market) which, through special economic treaties, links Italy
 with Western Germany, France, Belgium, Holland, Luxembourg, Great Britain,
 Ireland, Greece and Denmark (next members Spain and Portugal).

 Italy is also a member of NATO (North Atlantic Treaty Organization),
 which is a military organization including most of Western Europe coun-
 tries and U.S.A.

                                        1


                            LABOUR SITUATION

 In 1983 in Italy there were 56,639,000 inhabitants, with a birth rate
 of about 1, which means that there were as many births as deaths.
 The workers were 20,704,000, of which 14,885,000 were dependent and
 5,819,000 independent.
 The State employees were 3,900,000.
 The pensioners were 15,000,000.
 The unemployed were 2,278,000, that is about 10% of the working popula-
 tion.
 The occupied workers are distributed in different economic sectors as
 follows:

                      agricolture                   12.3%
                      industry                      35.8%
                      services and others           51.9%

 The average wages for a workman of the industry sector is of about
 14,000,000 italian lire ($ 8,250) per year, to which 20% must be deducted
 for taxes and contributions.
 Workmen represent 73,4%, while the employees are distributed in different
 economic sectors, with the following percentage on the total workers

                      sector                    % of employees

                      agricolture                  2,5%
                      industry                    16,1%
                      services and others         40,0%

 There are about one million intermediate managers and highly specialized
 technicians.

 The inflation rate was 15% in 1982, 13,5% in 1983 and 12% in 1984: it is
 very much higher than in Common Market (whose average inflation rate is
 6% in 1984).

                                        2


                              TRADE UNION SITUATION

 In Italy the Union Members are 9,700,000 between the workers, in addition
 to 2,400,000 between the pensioners.
 Namely the situation is the following:

 Union's name          N. of worker          N. of pensioner       Year of
                          members            members               foundation

 CGIL(communist
      area)            4,500,000             1,300,000               1946

 CISL (Christian
      democrat
      area)            3,300,000               800,000               1950

 UIL (socialist and
     liberal area)     1,300,000               300,000               1953

 CISNAL (fascists)
 AUTONOMOUS              600,000                ===                  1947


 CCIL, CISL, and UIL are tied up in a Federative pact since 1972; they are
 always consulted by the Government in occasion of important economic
 chioces in Italy.

 The Unions are organized in categories, such as metalmechanical, chemical
 building, health, bank, transportation, school, pensioner, docker,...

 The Unions and their categories are present at three levels: national
 level (where are the most important Leader of the Unions), regional
 level (Italy is composed by 20 regions) and provincial level (there are
 100 province in Italy).

 In every work place there is a "consiglio di fabbrica" (plant council),
 which is eleeted every two years by all the workers; every worker is eli-
 gible, not just the members of the Unions.

 The "consiglio di fabbrica" is the organ which decides the general policy,
 formulates the strategies, deals with the employer, together with
 a)   other "consigli di fabbrica" of the same employer,
 b)   other "consigli di fabbrica" of the same local, provincial or regional
      area
 c)   with the Unions at different levels.

                                        3


 In Italy the Unions negotiate not only labour condition, but also politi-
 cal economy and economic programming, territorial policy, taxes policy, etc.
 From this point of view the counter-parties of the Unions are not only
 employers and their associations, but also national and local Governments.

 The Italian Unions are deeply engaged on themes such as peace, freedom, de-
 mocracy and civil rights everywhere in the world.

 The fondamental tool of struggle are the strikes which can be used to change
 labour condition or political aspects of greater and wider importance.

 According to a recent statistic from England, Italy is the country where
 more strikes take place among the first 16 industrial countries.
 This is the situation:

                days lost for strikes
                (every 1,000 workers)                Country

                      1,018                            Italy
                        548                            Canada
                        511                            Ireland
                        250                            UK
                        133                            France
                         13                            Japan
                          1                            Western Germany

                                        4


                                F L M

 The "Federazione Lavoratori Metalmeccanici" (Federation of Metalmechanical
 workers) has been founded in 1971 by the metalmechanical workers, members
 of CGIL , CISL and UIL Unions.

 The "Consigli di Fabbrica" of IBM and their National Commitee are part
 of FLM.

 FLM has 916,000 members, that is 59% of the metalmechanical workers.
 It is the strongest category in the italian Unions, and it is the category
 in which the maximum effort has been made in order to achieve unity in the
 Unions.

 In FLM work 1,442 people, whose wages are paid by all union members.

                                        5


                      LABOUR CONDITIONS AND CONTRACTS

 In Italy workers are divided by law in 3 groups: managers (of high level),
 employees (including intermediate managers) and workmen.

 The Unions CGIL, CISL, UIL organize employees and workmen, while managers
 have their own associations.

 Labour conditions are determined by means of national contracts of cate-
 gory (metalmechanical, chemical, ... ) which are normally renewed each
 3 years.

 The metalmechanical workers are divided in 7 categories according to the
 type of activity they carry out.
 The workmen cannot be over the fifth category.
 Sixth and seventh categories are reserved for employees with high skill or
 for intermediate managers.

 On the principal subjects, the present situation is the following:

 1)   INFORMATION RIGHTS
      Each year the employer's associations at regional and provincial level
      will supply the Unions with information about production prospects,
      employment, structural changes, new work locations.
      Companies with more than 350 workers (e.g. IBM Italy) will supply the
      Unions, at national level, with information about choices and forecast
      of production activity, employment. environment and ecological condi-
      tions, production decentralization which might influence work organi-
      zation.

 2)   WORKING HOURS
      Working hours are 40 per week, often divided in 8 hours in 5 days.
      As far as shift is concerned, the working hours are 37,5 per week.

      Vacations are 5 weeks per year, and 6 weeks per year for workers
      with more than 18 years of work in the same firm.
      From 1985 there will be one more week of vacation for all workers.
      In addition there are 10 holidays per year.

      Overtime work is allowed; the "consiglio di fabbrica" must be infor-
      med, and has the right to refuse overtime work if in Saturday.  Sunday
      work is not allowed (with some exception regulated by law, like in case
      of public services, ... )
      Overtime work cannot exceed 150 hours for each worker per year.

                                        6


      There is the possibility to have part-time work.
      In case of maternity there are 5 months of paid absence, and 6 more
      months of partally paid (30%) absence.
      In case of marriage there are 15 paid days of leave.
      There are paid leaves for student workers.
      Preservation of job is guaranteed in case of illness, if it does not
      exceed 12 months, and in case of military service.
      In case of illness the workers will be paid 100% for the first 4
      months, and 50% for the following 8 months.

 3)   SALARY
      Wages are on montly basis, and are given for 13 months per year.
      The different components of the salary are the following:

      a) Basic salary : is a function of the category to which a worker
                        belongs and varies between $ 200 and $ 360.
      b) Contingency  : is equal for all categories, and its value is
                        determined by the cost of living.
                        Its present value is $ 340.
      c) Third element: is a function of the category to which a worker
                        belongs and is determined through bargaining
                        at firm level.
                        In IBM Italy it varies from $ 80 to $ 130.
      d) Senirity
         increase     : about $ 17 each two years of seniority
      e) merit salary : this is the part completely controlled by the
                        employer, in our case IBM Italy.

      In addition there is a annual production bonus, bargained with the
      employer, which in IBM has at present the value of $ 620 per year.

      Overtime and night work are paid with a 30% percentage increase of
      salary for the worked hours.

      The lump sum or postponed salary is the amount of money that the
      worker receives from the employer when he leaves the firm. It is
      roughly corrispondent to as many month salaries as the years of
      services have been (e.g.: if a worker leaves the firm after 15 years
      of service, he will receive a lump sum correspondent to 15 mnthly
      salaries).

      It is also important to say that you must pay taxes and contri-
      bution a sum that varies, depending on the amount of the salary,
      between 20% and 30% of the salary itself.

                                        7


 4)   REGULATIONS
      At company level (and actually in most companies) there are canteens
      or cafeterias where the workers have their meal, largely paid by the
      employer.
      Any kind of investigation, also in the engagement phase, on politi-
      cal, religion and trade-union opinions of workers, is prohibited
      by law.
      There is complete freedom to express one's own opinions at work.
      It is prohibited to have a remote control of the workers' activity
      (e.g. by installing cameras in the work places).

      Dismissal can take place only for a correct reason (e.g. production
      necessity, heavily rude behaviour of the worker, ...

 5)   UNION RIGHTS
      a)   Workers' meetings     10 hours per year, paid, during working
                                 hours, and with no limit out of working
                                 hours.
                                 In any case the employer must provide the
                                 room for meeting.
      b)   Union Bulletin
           Boards                At least 1 board for each location

      c)   Union offices         if there are more than 200 workers in a lo-
                                 cation, the employer must provide an office
                                 for the union activity.

                                 If the workers are less than 200, the room
                                 must be provided temporarely by request.

      d)   Paid leaves           For union executives ("Consiglio di Fabbrica")
                                 1 day per month.  Not paid leaves can reach
                                 8 days per year.

      e)   Check off             That is how all union members pay their
                                 contributions.

      f)   Transfer  of
           union executives      It cannot take place if the union does not
                                 agree.

                                        8


                           SOCIAL SECURITIES

 Social securities are financed by both employers and workers, and sometimes
 also by the State.
 The main social securities are the following:

 1)   PENSION

      Workers receive a pension when they stop to work and
      a)   men are 60 years old and women are 55 years old or
      b)   if they have been working for more then 35 years
      It is calcolate in the following way:

                monthly pension = last monthly wages x No.years worked x 2 / 100

      For instance a worker who earns $ 1000 per month and retires after
      40 years of work, will have a pension of
                $ 1000 x 40 x 2 / 100 = $ 800 per month

      The pension is then revalued according to inflation rate.
      There are also invalidity and old-age pensions, independent from the
      number of years a person has been working, but in any case the value
      is much smaller.
      If a pensioner dies, strict relatives can still be paid the pension if
      they do not have other significative income.

 2)   PUBLIC HEALTH

      It is financed by all citizens, it is public and it is free.
      Because of the non perfect working of such service, citizens and
      workers often apply to private doctors, which are quite expensive.

 3)   "CASSA INTEGRAZIONE" or 1NTEGRATION FUND

      To industry workers temporarely removed from work (but not fired) is
      given monthly an amount of money, which equals 80% of their last wages.

      In 1983, year of deep economica crisis in Italy, they have been
      750,000,000 hours paid with such integration fund, corresponding to
      350,000 workers not working for the whole year (or to 700,000 workers
      not working for 6 months).

      On the other side the dole is very low ($ 35 per month).

                                        9


 4)   FAMIILY ALLOWANCES

      For every relative with no significative income, a worker receives
      family allowances of about $ 12 per month.

                                       10


                                 IBM IN ITALY

 Informatic revenue in Italy has reached in 1983 about 3.500 million dollars
 for hardware and about 2,700 million dollars for software.
 The annual growth rate of this market is between 20% and 30%, and IBM has a
 market share of about 55%.

 IBM Italy was established back in 1927, and has always had a large share
 of the market (up to 70% in the sixties).
 All the stocks of IBM Italy belong to IBM Corporation, through IBM World Trade.
 At the end of 1983 they were 12,649 workers, operating in 46 towns for a
 total of 72 locations.
 Managers (top and intermediate) were about 1,500.
 Headquarters are in Segrate (near Milan).

 In Italy there are 2 IBM plants, one in Vimercate (near Milan) with 3,106
 workers, producing S/38, S/23, S/1,  ..... and another one in Santa Palomba
 (near Rome) with 535 workers, producing S/36, 5280, ...

 In Basiano (near Milan) there is a distribution centre for imported and
 exported computers and terminals, where automation has been heavily intro-
 duced.

 As far as software is concerned, a so called Development Laboratory is in
 Rome with about 200 workers: it develops application programs for the EMEA
 (Europe and Middle East Area); another little group of 30 workers is in
 Milan, developping application programs for the Italian Market only.

 There are also 2 scientific centres, one in Rome and the other in Pisa, near
 Florence, where are carried on applied researches in areas like hydrology,
 air pollution, econometry, image processing, distributed systems, etc....;
 50 workers operate in these two centres.

 For IBM Italy these are the figures in 1982:

                     REVENUE             1,582 million $
                     PROFIT                150    "
                     DIVIDENDS             150    "
                     ROYALTIES              88    "

                                       11


 As far as benefits for IBM'ers are concerned, the situation is rapidly
 changing, and we can say that IBM Italy is in fact withdrawing benefits
 like extra-vacations, loans for car and house purchase, .... just leaving
 the stock option plan, which is a nice way to get some money back.

 Since 1983 we also have a subsidiary company, where about 50 people work,
 for importing Personal Computer for the Italian market.

                                       12


                         STRATEGY OF IBM ITALY UNION

 The history of the Union movement in IBM Italy can be schematically divi-
 ded in two periods.

 1952-1970      The attention is mainly focused on internal problems and
                every one or two years we have bargaining and contracts for
                salary, working hours, shift allowance, lump sum, regula-
                tions, integration of the Health System, price of lunch.

 1970-1984      The struggles of students and workers in Europe at the be-
                ginning of the seventies shifted to the left also the stra-
                tegical line of the IBM Italy Union, which now tends to
                devote itself to more general problems.

                The most significant examples are some contracts obtained
                after more than 100 hours of strikes: the aim was that of
                obtaining a more qualified presence of IBM in Italy through
                the realization in our country of a complete productive cycle,
                from research to commercial activity.
                The result of this struggles has been the opening of a new
                plant in Santa Palomba, near Rome, with about 500 workers,
                the creation of a Software Development Laboratory in Rome
                wth about 200 workers, the transformation of the Vimercate
                plant towards production involving high technology, a substan-
                cial improvement of the balance of import and export.

                Moreover, as unemployment has always been a great problem
                in Italy , the IBM Union movement has always fighted for
                increasing employment (4,000 more people in the last 6 years):
                one of the argument used is that the introduction of new techno-
                logy must not reduce the number of workers, but the number of
                working hours.

                                         13


                          UNION NEGOTIATION IN IBM ITALY

 It is usual in the union movement in Italy to organize periodically
 strugge in order to achieve in specific companies better conditions
 of life and work.
 This also happens in IBM Italy.
 First there is a consultation of the workers on defining the demands,
 and this is done by means of questionnaires and meetings; then there is
 the presentation of the platform of worker demands to the company.
 Afterwards there is necessarily (as the first answer of the Company is
 always negative) a phase of struggle, which can last more than 1 year,
 through strikes (often hundred of hours), pickets, demonstrations,
 meetings with political parties, requests of intervention of local and
 central Governments, newspaper articles, lawsuits.
 Eventually there is the written agreement, which is generally the result
 of a mediatone

 In the last 30 years we signed 19 agreements with IBM Italy.

 Let us examine the most important results of these agreements by looking
 at them by subject.

 1)   Salary
      Platforms on salary in IBM have always been the characteristic of
      integrating the minimum wages negotiated every 3 years at national
      level in the whole category of metalmechanical workers.

      In 1964 the annual production bonus is established: it bas the same
      value for all workers, and its value is negotiated every 1 or 2 years.
      Today its value is $ 620 per year.

      In 1969 men-women wages equality has been reached.

      Up to 1974 the salary increases were equal for all workers.

      In 1974 the so-called third element is introduced; this varies ac-
      cording to the categories and its present range is between $ 80 and
      $ 130 per month.
      The third element has been a great innovation, as it has also the
      aim to limit the inequalities and the discriminations of pay, that
      in IBM are emphasized by merit system.
      In fact the third element increase absorbs the merit salary: let us
      suppose that a worker has a merit salary of $ 30 (that is $30 more
      than the minimum per month guaranteed by contracts), and let us-

                                       14


      also suppose that an increase of $ 50 of the third element is ne-
      gotiated: in such case the merit salary will disappear (e.g. it will
      be absorbed in the third element) and the real salary increase will
      be $ 50 - $ 30 = $ 20.
      Such increase will be $ 50 just in the case of worker with no merit
      merit salary.

      Generally speaking, the aim of the Unions, also in IBM, is that the
      maximum salary must be twice the minimum.

      As far as shifts are concerned, since 1982 the salary is 12% higher
      and 24% higher in case of night shifts.

      Since 1956 any kind of overtime work in IBM is paid higher than in
      other Companies.  In 1979 there has been a negotiation for night
      overtime work (between 10 p.m. and 7 a.m.): the result is a salary
      higher of 65% and a paid rest long as the worked hours.
      System Engineers, Salesmen and managers of any level are never asked
      for overtime work and consequently are never paid for it.  The fun-
      damental reason for this is that at present their work is organized
      and controlled by targets and they are not strictly obliged to the
      official working hours (though most of them generally work more
      than their due). [see also: Salary in IBM]

 2)   Working hours

      From 1953 to 1967 the working hours have been negotiated every year
      and a half of the average.
      Since 1969 we have never been negotiating the working hours at
      company level.
      In 1982 part-time has been introduced in IBM: a worker can ask to
      work 20 hours per week (e.g.: 4 hours for 5 days) getting half the
      wages, but still using the company's restaturants or cafeteria.

      Other contracts on working hours state that a worker can have:
           3 days of paid leaves for the death of a relative (since 1957)
      -    1 day of paid leave for the childbirth (since 1959)
      -    3 days of paid leaves for each examination taken at the univerity
      -    up to 10 days per year plus examination days for secondary school
      -    when you attend courses for work reasons, the journey must be made
           in the working hours, and the worker has the right to go back
           home (expenses paid by IBM) on the weekends.

 3)   Transfers

      On the occasion of collective transfers (e.g. from Milan to Vimercate
      in 1966 and from Milan to Segrate in 1975) agreements have been sti-
      pulated, and they provide:
      a)   reduction of one hour and a half of working hours
      b)   reduction of the lunch interval (from 60 to 45 minutes)

                                       15


      c)   transport system for workers provided by IBM (in absence of
           public service)
      d)   appropriation of hundreds of thousands of dollars by IBM
           for financing the construction of new public kintergardens
           near the new location.

      As far as individual transfers are concerned, a very important
      agreement of june 1974 states that the worker must agree with
      IBM on the transfer, otherwise the transfer can not be done.


 4)   Medical Insurance

      A Medical Insurance Fund has been established after negotiations
      in 1957.
      It is financed by workers with deductions of pay, and by IBM with
      a sum which is double of that given by the workers.
      The Board of Directors of this Fund is formed by 39 people elected
      by the workers and by 13 people appointed by IBM.
      This Fund is used to integrate the Public Health System, for ser-
      vices like oculist (and glasses), dentist, gynaecologyst, paediatri-
      cian, and generally any private specialist visits and treatments,
      with a contribution up to 80% of the money spent by the worker.
      The budget for 1983 has been of $ 1,800,000.


 5)   Union Rights

      Before 1969, the Union representives in the company were appointed
      by the three great Unions CGIL, CISL and UIL.
      After 1969 in every location the "Consigli di Fabbrica" appear, and
      they are elected by all workers, member or not of the Unions.
      The biggest Consigli di Fabbrica are in Milan/Segrate with 60 branch
      executives, Vimercate with 50, Rome with 30; in the small locations
      there may be at least 3 branch executives.
      The maximum number of hours of paid leave for branch executives in
      order to accomplish their mission is, annually,

                           9,250   hours    for      Milano/Segrate
                           8,000                     Vimercate
                           3,500                     Rome
                           5,250                     other locations

      Every single branch esecutive can not use more than 24 hours of paid
      leave per month, except in case of Union courses, seminars, meetings,
      ete .....

      The National Commitee of "Consigli di Fabbrica"is composed by 20 members:
      these members are elected by each Consiglio di Fabbrica or group of
      Consigli di Fabbrica, in proportion to the number of workers they re-
      present.

                                       16


      The National Commitee elects an esecutive Commitee of 5 members.
      Any time IBM wants to speak to or bargain with the National
      Commitee, and if it is available and advisable , all espenses to
      convoke the members in Segrate or @lilan (where meetings with IBM
      take place) are paid by IBM.

 6)   Illegal Activities of IBM Italy

      Contract works      IBM Italy made use of workers of other compa-
                          nies for tipically IBM activities.  Thanks to
                          the struggles of workers and to legal actions,
                          some hundreds of workers of these companies
                          were employed during the seventies.

      Anti-Union
      activities          In occasion of strikes, IBM used to rent hotel
                          halls and rooms, and offices, where strike-brea-
                          kers could work.
                          In the seventies, because also of legal actions,
                          there was an agreement according to which IBM
                          gave definitely up to such behaviour.

                          There were also several cases of firing of
                          Union executives, but they were all re-engaged
                          because of both the struggle of workers and the
                          intervention of Law.

      Badge Areas         As IBM had closed some areas in some locations,
                          controlling admittance by the mandatory use of
                          personal badges, the Unions took legal action
                          against IBM for violatine the law, which prohibits
                          any kind of remote control on workers.
                          In 1983 there was an agreement, according to which
                          the definition of these areas must be negotiated
                          with the Unions and moreover, personal badges
                          cannot be used, but only group badges (e.g. there
                          must be at least 5 people with the same badge).

      Videoterminals      Also in this case there is a violation of the law,
                          and a legal action has been started.
                          IBM wants that the access to most of the applications
                          takes place with the personal identification
                          of the user, and wants to register all the data
                          resulted to individual users, data used also for
                          remote control of the worker, control which is
                          forbidden by law.

                                       17


 IBM is spending hundreds of thousands of dollars
 in order to win this lawsuit, making use of the best
 Italian lawyers, of the greatest esperts of informa-
 tics and of important persons of the main political
 parties: a lot of people paid with a lot of money,
 but the results are not assured ....

                                       18