Industrial relations

The industrial relations between Terna and the labor unions that represent its employees take place at both the electricity industry level and the Company level.

LA4All of Terna S.p.A.’s employees are covered by a collective labor contract adopted by the companies in the electricity industry (in Italian, the CCNL - the National Collective Labor Contract for employees in the electricity industry). This contract governs many aspects of employee pay and benefits, such as, for example, the minimum pay for the different professional categories, the terms and conditions of shift workers, annual leave, overtime, supplementary health care, and supplementary pensions. Terna participates in establishing the industry’s rules, since it is part of the employer delegation that negotiates the renewal of the contract with Labor Unions. The three-year CCNL in effect was signed on March 5, 2010 and expires on December 31, 2012.

HR5The relation with the industry Labor Unions also gives rise to the regulation of the indispensable tasks that must be performed in the event of a strike to ensure service continuity. At Terna, this issue is governed by the National Union Agreement of November 12, 1991, which implements Law no. 146 of June 12, 1990, regarding the exercise of the right to strike in essential public services and approved by the Guarantee Authority on Strikes for the aforesaid law.

Among other things, the agreement provides in any case for the exemption from strikes of the personnel that is indispensable for supplying the service and entrusted with short-term planning, as well as the operation and maintenance of the production and transmission system. With regard to such provisions, at Terna this exemption concerns shift workers of the National Control Center, the Grid Services and Production-Plan Services, the Distribution Centers, and the Plant Remote-control Centers.

As far as employees on call are concerned, the agreement in question provides that, although they have the right to suspend their normal work during a strike, they are obliged to be on call throughout the duration of said strike. As long as strikes are called in compliance with law provisions, there are no limitations on Terna employees’ to exercise their right to strike.

It should be noted, however, that when the CCNL was renewed on March 5, 2010, guidelines were established for the subsequent definition of the new regulations regarding the right to strike in the electricity industry. These guidelines confirm the principle of service continuity in the event of a strike and introduce on an experimental basis innovative elements regarding strike procedures for personnel on call.

LA6The renewal of the CCNL provided for the establishment of a bilateral, industry-level Body on “Health, Safety, and the Environment”, with the task of enhancing the safeguard of occupational safety, beginning with common objectives agreed LA9on by the parties. In particular, the Body has the task of presenting proposals, monitoring, and coordinating training regarding environmental and safety issues. Provision was made for the possibility of establishing – in companies with more than 500 employees – bilateral corporate committees to work in cooperation with the industry Body.

Employee involvement in matters of health and safety is currently regulated by the law, which provides for Employee Safety Representatives (RLS) to be appointed by all the employees. The RLS thus represent 100% of the employees and their number varies according to the number of the company’s employees and offices. Their role involves seeing that regulations regarding the health and safety of workers are applied. During the aforesaid renewal of the CCNL, the role of the RLS was expanded to include environmental issues, so they are now RLSA.

Representatives may request the Company to carry out inspections and they are consulted about risk assessment and the identification of preventive measures. At least once a year they participate in meetings with the employer and other corporate figures responsible for health and safety to examine the appropriateness of personal protective equipment and training programs, as well as the repercussions of new technologies.

In March 2009, Terna and the Company Unions signed an application agreement, while in June 2009 elections were held for the new RLS for all of Terna’s local units. The new RLS for the Company’s offices in Rome were appointed in October of the same year.

The aforesaid corporate agreement of March 2009 is only one of the numerous elements of the relationship between Terna and Labor Unions at the Company level. Industrial relations in the Company are based on the involvement of Labor Unions in the main aspects of corporate life, provided that the distinction of roles and responsibilities is maintained. Union relations at the Company level are governed by the Protocol on the system of industrial relations, which establishes a structured system of relations based on advance and/or periodical negotiation, discussion, consultation, and information.

The employee union membership rate at Terna S.p.A. in 2011 was 60.6%, which is high compared to the industry average, but represented a slight decrease compared to previous years. Membership is concentrated in the largest unions, which determines the absence of fragmentation in union representation and constitutes the condition for a high-profile system of industrial relations. Management of the Protocol on the system of industrial relations has enabled the parties to develop and consolidate an effective network of relations at all levels, thus allowing the processes of change of significant corporate interest to be governed.

In the 2009-2011 three-year period, bargaining with the industry labor unions led to the signing of 44 agreements. In 2011, industrial relations activities were characterized by bargaining with the national Secretariats of Labor Unions regarding corporate contracts or second tier contracts.

Two principal agreements were signed for defining the new economic – regulatory reference framework for the 2011-2013 three-year period, regarding Production Bonuses and Expense Reimbursement for business travel, respectively. The latter agreement allowed superseding the pre-existing system based on 20 different regional agreements, gradually establishing - by January 1, 2013 - single amounts at the national level for the individual reimbursement items.

Moreover, with the agreement signed on September 21, 2011, specific training projects were implemented regarding occupational safety (Safety management in construction sites, Fire prevention training, Safe driving on snow and ice) with the intention of consolidating a model of industrial relations based on participation also by sharing training goals and objectives.

Lastly, a preliminary discussion with the national Labor Union Secretariats was initiated regarding the project of the Terna Group’s new corporate structure.

Labor Organization involvement in case of organizational models represents one of the central aspects of industrial relations: both law provisions, sector contract and corporate agreements contribute to regulating this model. Pursuant to the LA5law, in case of mergers, acquisitions or other significant changes in corporate ownership structure identified by the law itself, the workers’ representatives must be informed and consulted no less than twenty-five days prior to binding agreements.

In compliance with the union agreements in effect at Terna, in the event of significant organizational changes preliminary discussions with the unions must be held, to be concluded within three months. The Company is required to make available all the documentation necessary for the union representatives to obtain a complete view of the organizational project in order to express comments and proposals. At this stage, the preliminary information remains at the collective level. Individual employees are informed in advance only if the organizational change entails their transfer to a different office. In this case, workers must be informed in writing at least thirty days in advance.