TURIN Carmaker Fiat FIA.MI, Italy's largest private-sector employer, said a labor dispute at a factory near Naples has been resolved, taking the heat out of a controversial issue in the country's election campaign.
"This has been technically resolved," Fiat Chief Executive Sergio Marchionne he told a conference in Turin. "The problem to me has been solved."
Politicians and labour leaders criticised Fiat ahead of the Feb 24-25 vote for trying to lay off 19 workers at the factory, in a country mired in recession. The economy is expected to fall by 1.0 percent this year.
The dispute stems from a Rome appeals court ruling last October that Fiat must take back 19 laid-off employees who were members of the FIOM union and had filed a complaint alleging discrimination.
Fiat complied with the request to re-hire the 19 workers. But it said it planned to lay off 19 other workers at the factory instead because staff levels were too high.
Pier Luigi Bersani, head of the centre-left Democratic Party who is currently ahead in the polls, said at the time that "Fiat's move was unacceptable from a moral point of view."
In a sign it is moving to repair relations with part of its labor force, Fiat said on Friday it plans to transfer the employees from the Naples factory's legal entity, Fabbrica Italia Pomigliano, to Fiat Group Automobiles (Fiat's mass-market car unit) as of March 1.
The move will have the effect of erasing the conditions that prompted FIOM's complaint.
(Reporting by Jennifer Clark; Editing by Erica Billingham)