Industrial relations

  • Pirelli Group industrial relations are conducted on the basis of constructive dialogue, fairness and respect of the various roles involved.
  • Relations and negotiations with trade unions are managed locally by each affiliate, in accordance with the laws, national and/or company-level collective bargaining agreements.

Pirelli Group industrial relations are conducted on the basis of constructive dialogue, fairness and respect of the various roles involved. Guaranteeing and respecting free trade union activities is one of the key values on which Pirelli bases its human resource management system.

Relations and negotiations with trade unions are managed locally by each affiliate in accordance with the laws, national and/or company-level collective bargaining agreements, and prevailing customs and practises in each country. At this level, these activities are supported by the central departments, which coordinate activities and ensure that the aforementioned principles are observed throughout the Group.

This activity achieved important results in 2010, including signing of the collective bargaining agreement for the new plant that is being built at Guanajuato, Mexico. That plant will employ about 1,200 workers when operations commence in March 2012. Collective bargaining agreements were also renewed at various Group plants in Brazil, Argentina, Great Britain, Germany, Romania and Turkey.

Trade unions also played a major role in renewal of the national collective bargaining agreement in the Rubber and Plastic sector and the signing of two important company agreements: the first at the new Settimo Torinese Industrial Centre, aimed at harmonising pay and regulatory conditions at the two car and industrial vehicle production units, and the second concerned revision of certain economic compensation for qualified blue collar workers of Pirelli Tyre, at the Bicocca area.

In 2010, the company continued the cost-cutting process of organisational and productive rationalisation that began in the second half of 2008 to attenuate the negative impact of the global economic crisis.

More specifically, efficiency improvement measures first implemented in 2009 continued in Germany and Italy.

In Germany, the corporate reorganisation and restructuring processes launched in November 2009 at the Merzig steel cord production plant were completed. An agreement was reached with labour unions on appropriate measures to manage approximately 150 redundancies resulting from closure of the Cord and Thin Wire departments with as little trauma as possible.
In Italy, the company continued the restructuring and reorganisation process undertaken in 2009 at the new Settimo Torinese Industrial Centre. Two separate staff reduction processes were undertaken in 2010 at the two Settimo Torinese production units, resulting in the redundancy of more than 90 persons together with other management tools.
In April 2010, another staff reduction procedure was launched in Italy at the steel cord production plant in Figline Valdarno.
Under the specific agreement reached with trade unions at the Figline Valdarno plants, agreement was reached on the operating procedures to be implemented for rendering 35 redundancies as little traumatic as possible. Fourteen employees have already left their positions on a voluntary basis, while the positions of the others will be resolved in 2011.

In compliance with local law and/or contractual regulations, these organisational and production streamlining measures designed to contain costs were implemented by Pirelli by giving the trade unions and/or worker representatives advance and/or prompt notice at the national or local site level.

Consistently with the company’s sustainable approach to restructuring processes, professional reassignment policies were adopted through framework agreements with major international companies for outplacement plans.

As part of the announced strategy of focusing on the core Tyre business, the spin-off of Prelios S.p.A. (formerly Pirelli & C Real Estate S.p.A.), a real estate company, and Pirelli Broadband Solutions S.p.A., a telecommunication and media technology company, were completed in 2010.
The company informed its trade union partners about the corporate restructurings and any impact they might have on the affected employees, even when no specific regulatory or procedural obligations forced it to do so.

In view of focusing on its core business, statutory procedures for giving notice and consultation with labour unions and trade union representatives (pursuant to Article 47 of Law 428/90) were undertaken during the final months of 2010 in regard to three distinct transfers of business units from Group companies (Centro Servizi Amministrativi S.r.l. and Pirelli Sistemi Informativi S.r.l.) to Prelios Group companies for a total of 42 workers involved. Their employment relationship was transferred to Prelios Group companies without interruption and in compliance with applicable laws and regulations. These three procedures were all completed positively when the completion of procedure reports were signed with the trade unions and trade union representatives.

European Works Council (EWC

The Pirelli European Works Council (EWC), set up in 1998, holds an ordinary meeting once a year, following the presentation of the Group’s financial statements, to be updated on operating performance, financial-economic forecasts, investments made and planned, research progress, etc.
The agreement establishing the EWC also allows for the possibility of holding other extraordinary meetings to fulfil its obligations to provide information and consult with its delegates in view of transnational events involving significant changes to the corporate structure: new openings, restructuring or closure of sites and major, widespread changes in the organisation of work.
EWC delegates are provided with the IT tools that they need to perform their duties and a connection with the corporate intranet system, for the real time communication of official Company press releases.
At the annual meeting the Industrial Relations Department, the members of the EWC were informed of the Group’s annual operating and earnings performance and the contents of the 2011-2013 three-year plan submitted in November.
Following the spin-off of Pirelli Real Estate from the Group, the Committee currently has 13 members from the Pirelli sites located in the countries entitled to representation on it: Italy, Germany, Spain, France, Romania and Great Britain.

Compliance with statutory and contractual obligations governing overtime, time off, and bans against child and forced labour

Pirelli Group policy has always promoted compliance with all legal and/or contractual requirements concerning working hours, the use of overtime and the right to regular days of rest.
These requirements are often the subject of agreements with trade unions, in line with the regulatory context of each country. There are no restrictions on any of the workers’ right to use their total number of holidays, and the holiday period is generally agreed between the worker and the company.
The holiday period is generally agreed by the employee and the company. Likewise, and as has been publicly declared in its “Social Responsibility Policy,” Pirelli does not use child labour or forced or compulsory labour.
In accordance with, inter alia, the prescriptions of the SA8000® international standard, which was adopted by Pirelli in 2004 as the benchmark tool for management of social responsibility at its own affiliates, the labour rights described hereinabove are constantly monitored, both through coordination between corporate headquarters and its subsidiaries, and through independent audits. These issues have been specifically addressed in the first section of this Report, in the part entitled “Risk Management System.”

Labour and social security lawsu its

In 2010, as in previous years, the level of disputes remained low, generating a very small number of labour and social security lawsuits that was virtually unchanged from the previous year.
The level of litigation remains high in Brazil, to the point of representing about 90% of all the labour lawsuits currently pending against the entire Group, just as in previous years. This remains a traditionally widespread phenomenon in Brazil, due to the local judicial culture, affecting not only Pirelli but also the other multinational companies operating there. Labour lawsuits are generally initiated when an employment agreement is terminated, and they usually involve the interpretation of regulatory, legal and contractual issues that have long been controversial.

Gli indici di sindacalizzazione e le agitazioni sindacali

È impossibile valutare con precisione il tasso di sindacalizzazione del Gruppo, in quanto non in tutti i Paesi in cui Pirelli è presente (oltre 160 paesi in quattro continenti) tale informazione è rilevabile. In ogni caso, si stima che circa la metà dei dipendenti Pirelli sia iscritta a un sindacato. La percentuale di lavoratori coperti da contratto collettivo nel 2010 non subisce variazioni significative rispetto agli anni precedenti e si attesta al 78%: un dato riconducibile perlopiù alle differenze storiche, normative e culturali dei diversi contesti nazionali. La conflittualità complessiva registrata nel 2010 è stata piuttosto contenuta e in linea con quella rilevata nel 2009. Le agitazioni verificatesi nel corso dell'anno hanno riguardato soprattutto l'Italia e sono state incentrate su aspetti prettamente gestionali e/o di organizzazione del lavoro nonché su azioni di sostegno a tematiche di rilevanza politico /sindacale a carattere nazionale.
The company has made a major commitment both to prevent these disputes – to the extent possible within the previously mentioned cultural context – and resolve them, including use of settlement procedures.

Unionisation levels and industrial action

It is impossible to measure the percentage of union membership at Group companies, since this information is not available in all countries where Pirelli has a presence (over 160 countries on four continents). However, it is estimated that about half the Group’s employees are trade union members. The percentage of employees covered by collective bargaining agreements in 2010 (78%) remained largely unchanged from previous years. This information is largely the result of the historical, statutory and cultural differences between one country and another.
The total number of disputes recorded in 2010 was quite limited, in line with what was reported in 2009. The industrial actions that occurred during the year mainly affected Italy and were focused on issues strictly tied to operating and/or labour organisation matters and actions in support of political and union issues of national interest.

Occupa tional pension and healthcare plans

During 2010, in compliance with the guidelines adopted by the Group in previous years that envisage abandonment of defined benefit plans in favour of defined contribution plans, the defined contribution plan was extended to all workers in the United Kingdom, effective April 1, 2010, following specific agreement between the company and members of the fund. This arrangement replaces the previous system, which limited defined contribution treatment only to workers hired after a certain date.
Defined benefit plans are in place in the United Kingdom (the fund was closed for all employees on the payroll at April 1, 2010), in the United States (these plans were closed a number of years ago to employees on the payroll, in favour of defined contribution plans; since then, they only apply to retired employees but are not tied to wage increases) and in Germany (this scheme was closed to new hires in 1982). Other defined benefit funds, whose liabilities are not particularly significant, exist in The Netherlands.
Group affiliates still provide occupational company medical benefits according to local requirements. These healthcare schemes vary from country to country in terms of allocation levels and the types of coverage provided. These schemes are managed by insurance companies or specially created plans. The Company participates by paying a fixed fee, as in Italy, or an insurance premium, as in Brazil and the United States. For measurement of the liabilities and costs represented by these benefits, reference is made to notes 23 (“Employee benefit obligations”) and 31 (“Personnel expense”) to the Consolidated Financial Statements of Pirelli & C. S.p.A. at December 31, 2010.