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IUF and Italian affiliates help UFCW win improved collective agreement at Citterio, USA

Posted to the IUF website 27-Jul-2006

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On July 14, United Food and Commercial Workers Local 1776 ratified by a wide majority a new three-year agreement with Citterio USA, where 175 of its members work at the company's plant in Hazelton, Pennsylvania, USA.

Common ground for the renewal of the collective agreement was found only after UFCW appealed to the IUF to reach out to its Italian affiliates and obtain more information on the wage and health systems in Italy and on the agreement in force at Citterio's headquarters near Milan, Italy.

The assistance swiftly provided by FLAI-CGIL, one of the three Italian Foodworkers unions affiliated to the IUF, was critical in tilting the company's position in the negotiations at its American facility.

As the expiry of the previous collective agreement approached last May, Citterio - a speciality meat processor proposed to the union a wage scheme which tied meagre pay increases to significant expansions of production volumes and refused to contribute more than 3 percent of the annual increase in its employees' health costs, passing the rest onto the workers to pay out of their wages. Citterio's management's position was that since these schemes were adopted by the company in Italy, they could be applied to Citterio's American workers, too. In fact, the fundamental differences in the health care and social protection systems between the two countries made Citterio's proposal totally inappropriate and inadequate. Despite the union's repeated requests for extra information on the health and safety implications of the pay-for-performance scheme and on how it worked in Italy, Citterio's management categorically refused to answer any question.

Citterio USA workers unanimously rejected the company's final offer on May 25 and obtained an extension of the last collective bargaining agreement to July 14 which left them enough time to request the IUF to appeal and retrieve information from the Italian unions dealing with Citterio at home. While management sent messages to the union such as "the company's competitors are not represented by a union" and "it is our desire to remain in Pennsylvenia, but we will need the co-operation of everyone involved", FLAI-CGIL wrote a detailed account of how the wage and health care systems work in Italy and provided the text of Citterio's Italian CBA and sent it to Local 1776 through the IUF. The IUF also held direct consultations with the national CGIL officers for welfare and productivity issues, and conveyed relevant information to the UFCW Local bargaining unit.

The information collected by the IUF revealed that pay-for-performance schemes were used in Italy to calculate bonuses only, coming on the top of the base wage negotiated at a national level by industrial sector. Consultations also highlighted that basic health care is not an issue at the negotiating table in Italy where citizens are entitled to access to public health care coverage. What the company had omitted to tell to the American union was that the health care schemes it negotiated with its Italian employees supplemented the public health care system but did not provide the basic health coverage, as it is the case for American workers whose health coverage is private.

Once Citterio USA management learnt that Local 1776 was in direct contact with their Italian counterpart and had accessed the details of the wage, health and pay-for-performance scheme in Citterio's Italian operations, the company's position considerably softened and the offer was changed.

Citterio eventually agreed on significant hourly increases in basic pay wages and added productivity incentives on the top for an average hourly increase of 40cents over the next three years. This brought wage to its highest level in the history of the Hazelton plant. On health insurance, the union succeeded in shifting the company from its initial 3 to 11 percent increases per year in contributions to the plan, keeping up to the current levels of workers health care coverage.