* Deal calls for more flexibility on shifts, fewer benefits
* Fiat to invest 1 billion euros if deal backed
* Most Mirafiori unions agreed the deal last month
(Corrects spelling of Giorgio Airaudo in line 44)
By Lisa Jucca
TURIN, Italy, Jan 14 (Reuters) - Workers at Fiat's loss-making Mirafiori plant voted on Friday on a revolutionary employment deal seen as key to keeping production in Italy.
The contract is part of a Fiat-led overhaul of Italian labour relations, which have been based on national deals rather than on a plant-by-plant basis.
If workers accept the new contract, which has already been agreed at another of Fiat's five Italian factories, the company has pledged to invest 1 billion euros ($1.3 billion) to build new, high-end Alfa Romeo and Chrysler models at Mirafiori.
Chief executive Sergio Marchionne, who engineered the Italian carmaker's 25 percent stake in Chrysler and transformed Fiat from an ailing conglomerate, has threatened to deploy the cash abroad if workers reject the changes.
Fiat however also needs the deal to work in order to safeguard sales in its home market.
The proposed deal is part of a 20 billion euro "Fabbrica Italia" plan to double domestic production by 2014. It targets widespread absenteeism by limiting pay for those who take repeated sick leave around holidays and by ending wildcat strikes. It cuts the number of breaks per shift to three from four and sets up new shift patterns. Fiat can also call on each worker for 120 hours of overtime per year without union approval.
The deal has been welcomed by business leaders and most unions and workers at Mirafiori are expected to back it.
"This is an innovative deal that radically changes labour relationships in Italy and brings it closer to other western democracies," Roberto Di Maulo, secretary general of the Fismic union, which backs Marchionne, told Reuters at the factory gate.
"Italy is near the bottom of the class when it comes to foreign investments and productivity, and this is also due to a union system that is too rigid," he said.
But the leftist FIOM-Cigl union which says it represents around 23 percent of Mirafiori's 5,500 workers, is resisting.
"One cannot realistically believe that Italy's competitiveness can be improved by doing away with a 10-minute break," FIOM's Turin delegate Giorgio Airaudo said.
Mirafiori, which makes the Punto model and needs to roll out new models to survive, is Fiat's oldest plant and has become a symbol of Italian industry since it was established in 1939.
"The Mirafiori accord ... is destined to be emblematic for the future, to keep factories open in Italy ," Italian Prime Minister Silvio Berlusconi told Canale 5 television.
Opponents of the deal waved red flags and placards outside the factory, including one depicting Marchionne and Berlusconi and the slogan "Our lives are worth more than their profits".
"Our rights should not be touched. I will vote 'No' and I am proud of it. Marchionne should just leave and go back to Canada," Margherita Claverio, a Fiat worker, said.
Italian-Canadian Marchionne called on them to back down, saying there would be no second vote and repeating he had a "plan B" involving other Fiat plants around the world.
"In the Miafiori factory in Turin there is a small minority with a very big mouth. But it does not work like that in a modern factory," Marchionne said in an interview published in Belgian business daily De Tijd.
Voting began at the start of Thursday's night shift and was due to close at 1830 GMT. A simple majority is needed.
CHRYSLER DREAM
Marchionne repeated in the interview that he hoped Fiat would eventually own the majority of U.S. carmaker Chrysler.
He also told the paper there was no need to sell Fiat marques such as Alfa Romeo or Ferrari to another carmaker such as German rival Volkswagen.
"We have enough money to reach our goals and to buy what we want. I hope that the Germans have understood that. There is no talk of a sale," Marchionne said.
Separately, Ferrari chief executive Amedeo Felisa told reporters in China that Fiat had no plans to list the luxury sports carmaker. (Additional reporting by Stephen Jewkes in Milan and Phil Blemkinsop in Brussels; Writing by Alexander Smith; Editing by Dan Lalor and Sophie Walker) ($1 = 0.7610 euro)