Employment relations and social dialogue in small firms – Reading the Italian evidence comparatively

Somewhat surprisingly given the quantitative relevance of small firms in our economies, the issue of how labour is regulated within such firms has remained largely neglected within industrial relations and human research management research. As a result, the role that social dialogue institutions play in the definition of the employment relationship in such contexts is largely unexplored. Indeed, ambiguous and unstable evidence is available on that point, so that we found in current literature contrasting voices. This paper aims at contributing to this knowledge gap through a combination of quantitative and qualitative insights on Italian small firms. Differently than in other countries such as the United Kingdom and Germany, the coverage of both national level sectoral collective agreements and, in some sectors, also territorial level collective agreements, is particularly high within Italian small firms. Moreover, the number of employers in small firms report applying such agreements is much higher than the number of companies associated to an employer association or employing trade union members, i.e. those who are formally bound by such instruments. Hence, we can say that social dialogue shapes the employment relationship in small firms from the outside. However, the actual meaning of this high coverage at the micro level is largely unknown. Through a multi-method approach based on a survey of around 2,500 small establishments (5-50 employees) in four Italian regions (Lombardy, Tuscany, Abruzzo and Calabria), a case-study analysis of 20 small firms in Lombardy and around 40 semi-structured interviews with key informants (trade unionists, employers, officials of employers' associations), this paper engages with two questions. First, we will explore the reasons why employers largely rely on collective agreements. Secondly, we will analyze how these norms are applied at plant level. In so doing we will engage with two broader debates: the reasons for the erosion or resilience of IR institutions and the factors shaping the relationship between norms at different levels.