The protocol on representation is at a standstill. Meanwhile, the judges are making the decisions

The new protocol on industrial relations that the employers’ confederations – CGIL, CISL and UIL – are seeking to sign is good news. But the protocol has stalled, held hostage by political conflicts and conflicting interests. And now the judiciary is also stepping in to complicate matters.

The underlying idea is to rewrite the rules of representation, establishing which trade unions and employers’ organisations are genuinely representative and which collective agreements should serve as the benchmark in the various sectors of the economy.

The aim is to overcome the current fragmentation of contractual categories and to use the economic sectors identified by the Ateco codes, which classify business activities. Within each sector, the collective agreement signed by the most representative organisations should be identified. Its TEC (Total Economic Package), comprising the minimum wage and other economic and welfare components, would become the benchmark for other agreements within the same sector. The aim is to prevent companies carrying out the same activity from opting for less onerous agreements simply by changing their contractual category.

However, the agreement is at risk of failing for political reasons. As Dario Di Vico and Nunzia Penelope have reported in this newspaper, the dispute centres on the reform of the law on small-scale craft businesses. The government intends to widen the size limits within which a business can continue to be classified as a small-scale craft business. Confindustria fears that competing firms may apply different contracts and social security schemes, resulting in lower labour costs.

Now, on top of the political difficulties, the judiciary has intervened. In judgment no. 27541 of 22 October 2026, the Court of Cassation established the criteria for identifying the comparatively most representative trade unions that are entitled to set up company trade union representatives (RSAs). The issue stems from a previous ruling by the Constitutional Court (No. 156/2025), which had extended this right to representative trade unions that do not participate in collective bargaining.

The Court of Cassation has ruled that the scope of representativeness must be determined on the basis of the undertaking’s actual economic activity, using objective indicators such as the Ateco code. Up to this point, the reasoning is consistent with that of the protocol. However, the Court adds a decisive element: within the same sector, there may be several trade unions that are comparatively representative, even if they have not signed the lead agreement. Representativeness must be measured by taking the average of membership figures and election results, where available, and comparing this with that of the trade unions that are signatories to the lead agreement. Signing the lead agreement is not necessary, nor does the traditional 5 per cent threshold automatically apply.

The ruling directly concerns the right to establish RSA bodies and does not establish that all agreements have the same legal significance. However, it is difficult to imagine that these criteria will remain confined to works councils. The very notion of a comparatively more representative trade union is used by the law to confer significance on national collective agreements.

This gives rise to a contradiction with the protocol. The social partners are seeking to identify a ‘lead’ collective agreement for each sector, the pay terms of which would serve as the benchmark for all. The Court of Cassation, however, recognises that several representative trade unions may operate within the same sector, even if they are not party to the ‘lead’ collective agreement. Whilst this does not automatically confer equal validity on all collective agreements, it does make it more difficult to establish the lead agreement as the sole benchmark.

Above all, it is for the courts to assess what constitutes sufficient and proportionate remuneration within the meaning of Article 36 of the Constitution. The ‘Tec’ figure in the leading collective agreement may serve as a benchmark, but it does not preclude judicial review of the adequacy of wages. The Court of Cassation has not yet rewritten the rules governing national collective agreements, but it has paved the way for a development that risks undermining the very principle upon which the new system is built.

The political conclusion is that, if parliament continues to fail to pass a law on representation, it will be the courts that determine which trade unions are representative, which collective agreements should be used as a reference and what levels of pay are sufficient.

The only element that should be approved immediately in the agreement is the inflation protection clause. Without it, the forthcoming renewals risk repeating what has already happened in recent years: contracts renewed too late, insufficient pay rises and a further decline in purchasing power. Whilst there is debate over who should sign the contracts, there is a risk that we will fail to ensure even that those contracts protect wages from inflation.