employment relationships, labour law & ILO Recommendation No 198

Issues to cover in this session Role of & gaps in labour law Precarious employment relations & Labour law ILO recommendation No 198 on Employment Relationships

Purpose of labour law Redress imbalance of power between K & L – grant certain rights to workers (workers empowerment) Regulate working conditions, set minimum standards for work & service conditions (workers protection) Regulate labour market (nationally or in certain sectors) – to stipulate maximum or minimum limits (Ex: wages, strikes, right to organize, etc) Limit & control trade unions & its freedom of action What else?

Issues for discussion Labour law protects who? Who is an employee becomes a crucial issue for labour law & for workers protection What does denial of employment relationship do? - Unprotected worker, precarious employment - Fall in social security contributions & tax collections - Increase in legal disputes - Shifting of business risks & liabilities from employer/ enterprise to worker & society (in case of accident, for social security, employment) - ???

What is PRECARIOUS WORK? Employment relation that gives employers flexibility but leaves workers with unstable & insecure work, with limited rights & benefits, and little control over how work will be carried out. It pits workers against each other to undermine full time permanent employment. Undermines labour law & rights of workers Mostly women, youth & migrants - overrepresented in precarious work throughout the world

What are labour law reforms trying to do? Promote employment flexibility, increase management powers of bringing about changes at work place & …what about the workers? In return for flexibility, higher compensation, training & redeployment for workers BUT this should be done mainly by the State!  While the costs of downsizing, insecurity of workers & investment in human capital (education & training) are sought to be passed on to the State, its role in regulating & legislating workers rights is being eroded

Gaps in labour law labour laws based on the assumption of employer-employee relationship BUT most of the new employment is contractual or outsourced, where - - employment is offered not as appointment but as assignment (as in a client-supplier relationship) - proving identity as workers difficult, what to talk of establishing employer - employee relationship. Many benefits under labour law depend on long term employment/regular status (such as social security, maternity benefits, paid leave) Inadequate coverage of employment relationships in informal economy

Size of the unprotected work force For example (in 2005): Bangladesh: 78% of total employment (37.2 m) India: 92% of total employment (362 m) – (almost 46% of employment in the organized sector is informal) Nepal (98/99 data): 73% of all employment Pakistan: abt 73% of non-agricultural employment (20 m) Sri Lanka: about 62% of the total employment (4.4 m) Indonesia: over 78% Philippines: over 71% Note: Rough estimates, collated from different sources

Inadequacies of labour law Workforce divided, protection under labour laws differs depending on which category a worker falls under, such as Regular, Contract, Casual, Temporary, Muster roll, Adhoc employees, migrant, etc. No comprehensive employer-employee relationship law that sets the basic labour standards AND applies to all the workers in the economy. Difficulties in establishing employment relationship causes problems not only for workers but also for the viability of national social protection systems. Laws, regulations & their interpretation should be compatible with Decent Work objectives of the country.

The crux of Decent Work Given that workers bargaining power is limited, labour standards/ labour law should ensure that no person is employed/engaged under conditions that country does not regard as ‘decent’ – which implies – Employed on wage that is insufficient to live on Be deprived of the payment or benefits to which they are entitled to Be subject to coercion, discrimination, indignity or unwarranted danger at workplace Be required to work for so many hours that he/she is effectively denied a personal or civil life Plus - Right to organize & bargain collectively (ILO C 87 & 98)

For policy makers the main issue is – how do you balance the need for social protection of the workers with the need of the industry for production and employment flexibility? So, what should be the national policy on protection for workers in an employment relationship?

Why focus on Employment Relationships? Traditionally, unionism & labour law has been based on – Existence of employer-employee relationship Existence of employer-employee relationship Wage earner status of workers Wage earner status of workers A fixed Work place – factory/firm/establishment A fixed Work place – factory/firm/establishment But the changing world of work & flexible labour markets are exposing the inadequacies of such assumptions

ILO Recommendation No 198 on Employment Relationship, 2006 The recommendation calls upon the governments to – Review & adapt the scope of laws & regulations to guarantee effective protection of workers in an employment relationship List criteria for determination of employment relationship, irrespective of how the relationship is described in any contractual arrangement or agreed to between the parties set up mechanism (or use an existing one) to monitor the labour markets & the organization of work so as to implement measures concerning employment relationships.

Determination of Employment Relationship Whether an employment relationship exists or not should be determined by ‘facts’ not ‘form’ Whether an employment relationship exists or not should be determined by ‘facts’ not ‘form’ Provide for legal presumption of existence of employment relationship where one or more relevant indicators are present; Provide for legal presumption of existence of employment relationship where one or more relevant indicators are present; Reduce or reverse the burden of proof on workers Reduce or reverse the burden of proof on workers In consultation with W & E organizations, provide that workers with certain characteristics in general or in a particular sector will be deemed to be either employed or self –employed. In consultation with W & E organizations, provide that workers with certain characteristics in general or in a particular sector will be deemed to be either employed or self –employed.

Determination of Employment Relationship National law or regulations should include indicators of the existence of employment relationship. Some of the indicators that could be considered while determining employment relationship - the level of control the employer has over workers activities the level of control the employer has over workers activities whether the workers provides his/her own equipment whether the workers provides his/her own equipment whether the workers hires his/her own helpers whether the workers hires his/her own helpers the degree of financial risk taken by the workers the degree of financial risk taken by the workers the degree of responsibility for investment & management held by the worker the degree of responsibility for investment & management held by the worker workers opportunity for profit in the performance of his/her own tasks workers opportunity for profit in the performance of his/her own tasks

Employee v/s Self employed Under the control of other Supplies labour only Receives a fixed wage Cannot sub-contract the work Does not supply materials for the job (equipment?) Not exposed to personal financial risk in carrying out work No responsibility for investment & management No opportunity to profit Fixed hours of work, OT, etc What else? Owns own business Exposed to financial risk Responsibility for investment & management Opportunity to profit from sound management of work Control over what is done, when where & who does it Free to hire other people Can provide services to more than one person/business Provides materials, equipment, etc for the job Costs & agrees price for the job Control over hours of work What else?

Other measures to be taken Settlement of disputes – effective access Settlement of disputes – effective access Measures to ensure compliance & respect for national laws/policy – labour inspection services, collaboration with social security administration & tax authorities Measures to ensure compliance & respect for national laws/policy – labour inspection services, collaboration with social security administration & tax authorities Remove incentives to disguise an employment relationship Remove incentives to disguise an employment relationship Promote the role of collective bargaining & social dialogue as a means to finding solutions to work place problems Promote the role of collective bargaining & social dialogue as a means to finding solutions to work place problems Monitoring & implementation mechanism – setting up & involvement of workers & employers organizations Monitoring & implementation mechanism – setting up & involvement of workers & employers organizations

Negotiating change at national level … Ensure Right to Organize & Right to Collective Bargaining! Prevent further divisions of workers in the labour market –put all workers in one boat. Set nationwide floor labour standards – that apply to all workers & employers (de-link labour standards from permanency of employment); Roof to be attained thru Collective Bargaining – the right to which should be ensured. Promotion of the ILO’s Employment Relationship Recommendation - the employment relationship is the basis for labour law and its protection and vital for the respect of ILO standards.

Why Labour Rights/Standards? Labour Standards are not just a question of workers rights BUT are also means to promote sustainable economic growth! Labour standards create conditions for growth of domestic markets since they enable sharing in gains of growth & spread of purchasing powers – this makes domestic economic growth more sustainable.

Issues for discussion Does your labour law provide for minimum labour standards guaranteed to all workers? Labour law & Precarious work (contract, casual, agency workers) – what rights do these workers have? What rights does enterprise unions have in regard to these workers? What are the ‘means’ available to unions to enforce workers rights (especially rights to organize & negotiate)? Given that nature of employment is flexible, contractual, precarious, what implications it has for TU law in your country (formation of a union)

Law & precarious work Canada: “dependent worker” recognized under labour law to extend protection to workers not on the regular payroll. India: Contract Workers law – responsibility of principle employer - the law limits the use of contract workers for core production work but…. Argentina’s Labour Code holds principle employer responsible for contract or agency workers France: Supreme Court ruled that supposedly self-employed workers operating under conditions and prices set by their client company are covered by the labour laws. European unions are demanding for Europe-wide laws on equal treatment of agency workers. Asian enterprise union system: law needs to be reformed to give right to union to represent the agency worker in the enterprise – applicability of CBA