Italy's unions to push for stable contracts at Fiat after labour reform

[MILAN] Italian unions will meet Fiat Chrysler Automobiles (FCA) later this week to discuss whether to give hundreds of its short-term employees permanent contracts, taking advantage of a government move to ease labour rules.

FCA will meet unions at the Melfi plant in southern Italy on Thursday and Friday to speak about shifts and new hires it promised in January.

If the carmaker goes ahead and changes the contracts, it will be an important test for the efforts of Prime Minister Matteo Renzi who hopes to use his labour reform to encourage firms to hire, especially young people.

Roberto Di Maulo, leader of the Fismic union, said the new contracts would be convenient for FCA, allowing it "to cut costs. A temporary hire costs infinitely more".

Fiat declined to comment.

FCA said in January it planned to add more than 1,000 new workers at the Melfi plant thanks to strong sales of its new Jeep Renegade and Fiat 500X models. It also ended temporary layoffs at Melfi, allowing 5,418 employees to return to work full-time.

FCA said at the time that these new workers, who would be hired on temporary agreements initially, could be offered the more secure contracts once demand for the models had stabilised, but did not give a specific timeframe.

The legislative decrees approved by cabinet last week ease firing restrictions for large private sector firms and aim to reduce the use of temporary contracts.

Italy has one of the lowest labour participation rates in the euro zone and young people are hired almost exclusively on temporary contracts with few rights or labour protection.

FCA Chief Executive Sergio Marchionne has already expressed his approval of the measures at a news conference with Mr Renzi in Detroit. Mr Marchionne has been one of the most vocal critics of the laws, which have made it hard to lay off employees.

Besides the Fiat 500X and Jeep Renegade, Melfi also produces the older Fiat Punto model.

Union sources said they were told by FCA that production of the Punto at Melfi would continue throughout this year, dismissing reports that the manufacturing of this model could either be stopped or moved elsewhere.

The sources also added that given positive demand for all the Melfi models, new hires at the plant would likely exceed the forecasts given in January.

REUTERS