Labor Contract

LABOR CONTRACT. - In ancient Roman society, in which manual services were performed by slaves (operae illiberales), regarded as res, the employment relationship was conceived as a subspecies of the leasing of things, whereas intellectual work, the only kind deemed worthy of a free man (operae liberales), was the object of a different relationship (mandate), presumed to be gratuitous. Once slavery was abolished, the Roman conception of subordinate labor, handed down through the Middle Ages by virtue of the preservative force characteristic of legal concepts, found in modern capitalist society a new justification in the doctrine of nineteenth-century economic liberalism, which regards labor as just another commodity, subject to the play of supply and demand.

The development of the class struggle, which brought about the collapse of the principles of classical economics, steering the state society toward forms of regulated economy; the advent of new economic doctrines, among them the Christian one, born in the furrow of the Rerum Novarum; the consequent gradual social and political elevation of the working class; these, in summary, are the reasons why, in the new legislation, the employment relationship has disengaged itself from the scheme of leasing, and has been assumed as an autonomous legal institution. Finally, the Constitution of the Italian Republic, in force since 1 January 1948, after having placed labor at the foundation of the State (art. 1), broadly understood «in all its forms and applications» (art. 35), thus qualifying it as a title of participation in the direction of the state community, has attributed constitutional relevance to the fundamental principles by which the regulation of the labor contract must be inspired.

I. INDIVIDUAL EMPLOYMENT CONTRACT

The worker undertakes, in exchange for remuneration, to place his labor power at the disposal of the employer, in subordination to and under the direction of that employer (Civil Code, art. 2094). The subordination or dependence of the worker on the employer is the fundamental characteristic of the relationship, and the criterion that distinguishes it from the contract for services (Civil Code, art. 2222). The former has as its object the utility inherent in a subordinate work activity; the latter, by contrast, has as its object the result of autonomous work: in the one case the work risk, both as regards the result and as regards the harm that may derive to the worker's person from the work, falls upon the employer; in the other, conversely, the risk is borne by the person who has undertaken to perform the work or service.

Theoretically, the character of subordination is explained as the logical consequence of the original indeterminacy (within the limits of the worker's contractual classification) of the content of the performances in which the relationship will be carried out: that content will subsequently be determined by the employer (Civil Code, art. 2103), and this implies precisely, on the latter's part, a power of direction over the conduct of the relationship itself. But, in the normal run of cases (not always: consider domestic work), the element of subordination is connected, more significantly, to the concept of the enterprise; that is, it expresses the worker's integration into the enterprise of which the employer is the head (Civil Code, art. 2086), and this is equivalent to saying that, as a rule, the employer is an entrepreneur (Civil Code, art. 2082). In deference to the principle of the subjectivity of labor in the economy, the new Code repeatedly emphasizes the function, in the employment contract, of inserting the worker into the enterprise, and not into the business, which is the object of the former: both by calling the worker a "collaborator of the entrepreneur," and by defining the business as an organization exclusively of goods and not also of labor (Civil Code, art. 2555). Today, the principle of the collaboration of workers in the management of the business has become a constitutional directive (art. 46 of the Constitution), and is moving toward taking more concrete forms in the "management councils."

Workers are divided into two categories: white-collar employees and manual workers, and correspondingly the employment contract is specified as a contract of (private) employment and a contract of labor. Administrative or technical executives, whom the Code seems to gather into a third category, are in reality nothing other than white-collar employees qualified by directive functions.

The distinguishing criterion between the two categories is found in art. 1 of the law on private employment (Royal Decree of Dec. 13, 1924, no. 1825, referred to by art. 95 of the implementing provisions of the Civil Code), and it is pinpointed not so much in the predominantly intellectual or manual nature of the work activity, as in the collaborative character of the employee's activity, as distinct from the mere labor performances of the manual worker. This criterion seems contradicted by arts. 2094 of the Civil Code and 46 of the Constitution, already mentioned, where all workers, including therefore manual workers, are presented as collaborators of the entrepreneur. But in truth, here "collaboration" is taken in the broad and generic sense of cooperation toward the attainment of the economic purpose of the enterprise, and above all in the service of a social-political program for composing conflicts between capital and labor at the level of the enterprise, and not only, externally, at the trade-union level; whereas the collaboration of which art. 1 of the aforementioned Royal Decree speaks has the specific and proper meaning of collaboration with the entrepreneur in the technical and administrative organization of the enterprise, and therefore the employee is a subject of the organization. The manual worker, by contrast, collaborates in the organized enterprise and is therefore an object of the organizational activity of the entrepreneur and his employees.

As regards the legal regulation of the employment relationship, mention must be made of the most important point, the remuneration or wage of the worker (which more specifically takes the name of salary in the case of a white-collar employee).

The wage, whose family and welfare function the new Constitution has affirmed (arts. 36 and 38), consists, as a rule, of a sum of money (nominal wage) and therefore gives rise to a pecuniary obligation, subject to the nominalistic principle (Civil Code, art. 1277), which is however corrected by various devices, such as the so-called sliding scale, intended to adjust the wage to the cost of living, that is, to fluctuations in the purchasing power of money. The law (Civil Code, art. 2099) permits remuneration to be provided also, in whole or in part, through benefits in kind (real wage), but this must be regarded as an exceptional form, and in any case not exclusive, but supplementary to remuneration in money.

The minimum amount of the wage is withdrawn from the bargaining of individual contracting parties, and fixed in advance by collective employment contracts, stipulated by the professional associations of the category, with binding effect for all members of those associations, according to the principles of representation. But when they are stipulated by a trade-union body in which all recognized unions of the category are represented in proportion to their respective members, the new Constitution (art. 39) attributes to collective contracts binding effect for all those belonging to the category, even if not members of the unions: in that case the collective employment contract is only formally a contract; substantially it is a source of legal norms.

Luigi Mengoni

II. COLLECTIVE LABOR CONTRACT

A contract entered into by an organization of workers, with or without legal personality, and by an employer or an organization of employers, with or without legal personality, and whose object is the regulation of future and uncertain contractual relationships, and specifically of the relationships of subordinate employment existing between the workers represented by the contracting workers' organization and the individual contracting employer or the employers represented by the contracting employers' organization.

Like the trade-union organization, so the collective labour contract is, from a general point of view, a manifestation of the contemporary tendency of organized groups to substitute their wills, as bearers of collective interests, for the general will of the State and for the particular will of individuals. Hence the well-known phenomenon of the crisis of statute and of contract, considered as the exclusive source, from both an objective and a subjective point of view, of the regulation of social relationships; a phenomenon accompanied by the progressive affirmation of new intermediate legal forms, such as normative contracts, among which the collective labour contract also comes to be classified.

From a particular point of view, the collective labour contract seeks to ensure that the conditions agreed upon by the individual worker and the individual employer do not fall below a determinate objectively predetermined level: so that, to the economic function proper to the normative contract in general — that of ensuring a standardization in the contractual regulation of determinate relationships — the collective labour contract adds the social function of representing a minimum level of conditions guaranteed to the economically weaker contracting party. Hence the natural tendency of the collective labour contract, considered in its effects, to leave the framework of contractual agreements and to enter that of objective provisions. The problem of justifying the binding efficacy, and indeed the applicability as of right, erga omnes, of the collective labour contract, even in the silence or the dissent of the individual interested parties, members or non-members, of the contracting organizations, has repeatedly drawn the attention of legal doctrine (not only Italian), but the results obtained, on the basis of traditional common law, have never been convincing. So much so that the problem has been resolved, in all industrially and socially advanced countries, by the adoption, especially after the First World War, of specific legislative provisions, which have given the collective labour contract a regulation adequate to its economic and social purposes.

Considering the laws adopted by the individual countries as a whole, it may be said that (except for Great Britain, where the collective labour contract is a gentlemen's agreement, whose application is above all guaranteed, in practice, by the authority of the trade-union organizations) they conform as a rule to the directive of expressly establishing the applicability as of right of the collective labour contract (except in the case of more favourable conditions) and of providing a system through which the collective labour contract may, where the expressly established conditions obtain, extend its efficacy to the entire employers' and workers' category concerned. Such extension may occur: either in every case, by express provision of law (Russia, Labour Code, art. 16; Portugal, Labour Statute [1938], art. 33; Spain, Labour Charter [1938], parts 3 and 13; etc.); or case by case, by virtue of an act of the public administration (France, law of 23 Dec. 1946; Holland, law of 25 May 1937; Switzerland, federal law of 1 Oct. 1941; etc.), or of an arbitral or conciliation act (Australia, federal law of 22 June 1928; New Zealand, law of 8 June 1936; etc.).

In Italy the collective labour contract had, within the framework of the Fascist corporative order, a specific regulation in the law of 3 Apr. 1926, no. 563, and in the various laws that followed it. The collective labour contract could be stipulated only by the associations of employers and of workers legally recognized and invested by law with the representation of the whole of the respective category; or, upon their delegation or in the absence of their agreement, by the corporation concerned or by the labour court. The collective labour contract had, on pain of nullity, to contain the regulation of determinate elements of the employment relationship, and was subject to a review of legality and of merits through the procedure of deposit and publication. Once published, it had the force of a true and proper law of the category, and its observance was guaranteed by a threefold order of sanctions: disciplinary, civil and criminal.

The principal provisions of the regulation given, from 1926 onward, to the collective labour contract were incorporated into the Civil Code (arts. 2067 ff.) which came into force in 1942: among the codified provisions, particular importance attaches to that of art. 2077, which positively confirms the so-called automatic application of the institution under examination, in the sense that the precepts contained in it substitute de iure the divergent agreements of individual contracts falling within the field of application of the collective labour contract, unless such agreements prove more favourable to the worker.

Ordinances of the Allied military government subsequently confirmed (that is, from 1943 to 1945) the abolition of the Fascist corporative system, already in part carried out after 24 July 1943, so that the presuppositions of the abovementioned regulation lapsed and, in particular, the professional associations invested with the legal representation of the whole category. Legislative Decree no. 369 of 23 Nov. 1944, which confirmed and specified the said ordinances, nevertheless established that the collective labour contracts enacted by the Fascist organizations should continue to have effect as norms, until their replacement by new collective agreements.

The legal structure of the present trade-union organizations is, for the time being, that of associations of private law and of fact, which have legally no means of binding non-members and, in a certain sense, even the members themselves; the observance of the collective labour contracts in the meantime agreed upon, in almost complete replacement of those formed under the Fascist regime, is based solely on considerations of social or political expediency: which makes the adoption of new legislative provisions necessary.

The Italian Constitution which came into force on 1 Jan. 1948 contains in fact the directives for such legislation: art. 39, after establishing that trade unions acquire legal personality by means of registration with local or central offices, provides that registered trade unions « may, represented unitarily in proportion to their members, stipulate collective labour contracts with binding effect for all those belonging to the categories to which the contract refers ». It was therefore intended explicitly to affirm the possibility that the collective labour contract may produce its effects as a norm of the category, becoming, as a proportional manifestation of the will of the majority, law for the generality.

More precisely, the Constitution comes to admit two forms of collective labour contract: contracts stipulated by individual registered associations, whose efficacy it could not extend beyond the field of members, and whose observance would be guaranteed by the sanctions generally provided in matters of contractual obligations; and contracts formed by the various registered associations that may exist for the category concerned, whose effect would extend to all those belonging to the category, and whose observance could be guaranteed by a more rigorous system of sanctions. While the first form of collective labor contract would come to stand alongside company regulations and individual contracts, as a subjective source, the second (brought into being by virtue of a regulatory function delegated by the State to bodies of private law) would come to stand alongside laws and regulations, as an objective source for the regulation of contractual relationships of subordinate labor.

From the point of view of the orientations of social doctrine inspired by Christianity, the collective labor contract has always been considered an effective instrument of pacification between capital and labor, and of protection of the legitimate interests of the working class. Such doctrine can therefore only be favorable to the possible transformation of the collective labor contract into an objective norm; it intends, however (in opposition to corporative systems with an authoritarian basis), to safeguard in every case the principle of trade-union freedom, and therefore to admit (as is admitted by the new Italian Constitution) to the stipulation of collective labor contracts the various professional associations that may exist for a given category.

Luisa Riva Sanseverino