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Italy govt to review Fiat policies in Oct -source

TURIN, Sept 30 (Reuters) - An Italian ministerial committee is expected to review the temporary layoff policies at loss-making automaker Fiat before the end of October, a union source told Reuters on Monday.

Fiat has made use of temporary layoffs this year as it restructures, but rigid Italian labour laws have hampered the group's ability to take wider action and any further management plans to axe jobs would likely prompt a major conflict.

"The accord signed in recent months (with metalworkers of the Cisl and Uil unions) on temporary layoffs explicitly provides for a review on the situation before the end of October, with an interministerial committee," said the union source.

"This would also be the time to examine a new Fiat plan if there is one," the source said.

Last week, Fiat Auto Chief Executive Giancarlo Boschetti declined to rule out further job cuts, saying the firm was struggling with excess capacity of 20 percent to 30 percent while working to maintain its product investment spending.

Temporary layoffs can only be used for a maximum of 52 weeks over a two-year period and Fiat has already used up the quota. Unions have said the government may have to step in to ease the social impact should further cutbacks be necessary.

Fiat's major labour union said earlier in September the company could cut up to 6,000 more jobs in Italy as it battles slow sales and high debts, with the axe falling as early as October.

A cut of 6,000 jobs would represent nearly 15 percent of Fiat Auto's workforce in Italy. The company, Italy's largest employer, cut 3,000 jobs in July.