Challenges for Trade Unions The Informal Economy Challenges for Trade Unions Barbados, 1-4 December 2008

What is the Informal Economy? All economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements Activities operating outside the formal reach of the law In practice law is not applied or not enforced Law discourages compliance because it is inappropriate, burdensome, or imposes excessive costs

What do we know about the Informal Economy? Not a homogenous sector: it covers a wide variety of activities, enterprises and different types of workers with diverse employment relationships

Informal Employment? Own-account workers employed in their own informal sector enterprise Employers employed in their own informal sector enterprises Contributing family workers, irrespective of whether they work in formal or informal sector enterprises; Members of informal producers’ cooperatives; Employees holding informal jobs, whether employed by formal sector enterprises, informal sector enterprises, or as domestic workers employed by households; Own-account workers engaged in the production of goods exclusively for own final use by their household. Source: 17th International Conference of Labour Statisticians (ICLS) 2003

Characteristics of Informal Economy Work and Workers Engaged in small and micro enterprises and activities for which data is not regulated and which do not maintain any regular accounts; Casual, part time, irregular or seasonal employment; Frequently changing workplaces and employers; Unclear employer-employee relationship; Generally not covered under the labour laws;

Characteristics of Informal Economy Work and Workers Poor working conditions Unorganized therefore no collective bargaining Minimum wage or piece rate work Little or no access to formal sector credit skills training facilities No social protection

Trade Unions and the Informal Economy: Challenges Why should unions organize informal economy workers? How to extend collective action and bargaining to the informal economy? What kind of initiatives can be taken by unions for informal economy workers? What campaigns need to be undertaken for legislative protection of informal economy workers?

Basic Rights Denied in the Informal Economy Freedom of Association and Collective Bargaining No forced or compulsory labour No discrimination in respect of employment and occupation (includes training, access to employment) No child labour

Basic Rights Denied in the Informal Economy Safe and healthy working conditions Reasonable working hours Severance notice and pay Paid sick leave and vacation Maternity leave Retirement compensation

Issues Needing Trade Unions’ Attention Organizing! Organizing! Organizing! – focus on women and youth Improving conditions of work Promoting security income security employment security and safety at work and social security Legislative protection

Issues Needing Trade Unions’ Attention Promoting rights and protection of women workers, in particular non-discrimination in employment, education, skills training, and credit availability Elimination of Child Labour especially the worse forms illegal activities, prostitution, scavenging, and other hazardous activities

Obstacles to Organizing changing workplaces changing employers gaining access to the workplace unions not able or willing to adopt new strategies - actions may be required at other than workplace Trade unions lack human and financial resources Traditionally, unionism has been based on – Existence of employer-employee relationship Wage earner status of workers in a fixed work place – a factory ... & labour law too has been based on the above assumptions. But work & employment relations in informal economy do not reflect this reality –

Obstacles to Organizing Attempts to organize often pose risk of denial or loss of work Traditional ways of thinking about organizing Often difficult to get recognition of trade union Legislation often does not cover home-based workers who are often considered as self-employed

Approach to the Informal Economy improve informal enterprises – increase their assets, productivity and competitiveness through a mix of services provision (micro-finance and business development services) and policy interventions; improve informal jobs – extend the scope of existing legislation to secure the rights of workers, promote collective bargaining and enforce labour standards protect informal workers – provide social insurance coverage through extending existing schemes and/or developing new schemes, and promote the ‘voice’ of informal workers – promote organizing of informal workers and their organizations, and promote their representation in relevant policy-making institutions.

Fundamental Principles and Rights at Work (1998) Freedom of association and the right to collective bargaining No forced or compulsory labour No child labour Elimination of discrimination in employment and occupation a global social floor

What Needs to be Done? Recognize and improve workers rights Enhance social protection Invest in knowledge and skills of workers Provide support services access to credit and technology create and expand services (health, literacy, education, savings and loans) raise awareness about unionization Provide legal and institutional support

What Needs to be Done? Give economic incentives to promote formalization of informal economy activities Remove barriers to employment creation in formal sectors Regulate labour supply – rural-urban migration Develop a strategic programme for organizing What else?

The Informal Economy: Trade Union Challenges Questions??? Comments!!!