INFORMAL ECONOMY ANALYSIS NATIONAL REPORT- SERBIA CONFEDERATION OF AUTONOMOUS TRADE UNIONS OF SERBIA TRADE UNION CONFEDERATION INFORMAL ECONOMY ANALYSIS NATIONAL REPORT- SERBIA CIE/NND: „PROMOTION OF RIGHTS AND REPRESENTATION OF WORKERS IN INFORMAL ECONOMY“ ITUC/PERC – FNV Project

PART 1: GENERAL OVERVIEW The division of labour market in the Republic of Serbia on formal and informal became significantly recognizable during 1990s when, due to deep economic crisis, the informal economy became the only survival method for the major part of population. The state tolerated this phenomenon in order to lessen strong social tensions, therefore, the informal economy remained fairly strong in our region even after the achievement of relative economic stability.

The participants in the informal economy The participants in the informal economy are mostly employed persons whose income is not sufficient to provide them with funds necessary for their existence and the existence of their families. - The other groups of participants in informal economy include: unemployed, pensioners, students and refugees.

PART 2: CONTROL OF ILLEGAL WORK The informal economy is mostly spread in construction, trade, services, i.e. small clothing shops, cafes, small handcraft shops and agriculture. Those are mostly poor-quality, temporary jobs performed under bad working conditions and without protection at the work place. The control of illegal work was conducted in 2006, and a special emphasis was placed on employers in trade, catering, construction and handcraft sectors. During the control period, 51 995 inspections were conducted ex officio. The number of 16 205 illegal workers was detected. After the inspection the labour relations with 11 309 persons were legalized through signing of employment agreements. Better coordination of activities between different inspectorates is necessary in order to increase the effectiveness of inspection services.

- When we take a look at the number of municipalities in which more than 10% of total product of the municipality is being created in the grey zone, the trade is on the top of the list with 31.37%. - The second on the list is the agriculture, where grey economy participates in more than 10% of total activities in every fourth municipality in the Republic. Textile industry is also represented in grey economy with 28%, food industry with 19.5%, construction material with 13%, and trade in cigarettes, electronic devices, car spare parts and furniture with 11%. - Over the period from January 1 through December 21, 2007 there were 26 work-related deaths, 17 severe injuries which resulted in death, 1046 grave injuries and 27 collective injuries at work.

PART 2: REGULATION In accordance with the national legislation in Serbia, informal economy includes all workers employed at unregulated and unprotected positions, employees in unregistered companies, paid workers doing informal activities, etc.

DEFINES INFORMAL ECONOMY Economic Sciences Institute in Serbia defines informal economy as a wide range of economic activities or transactions conducted in manners that do not respect legal norms which are contributing to official GDP. Grey economy includes economic activities outside of regulated legal standards (informal economy) or those that are in opposition to legal regulations (illegal economy). Informal economy represents legal activities which are due to different reasons hidden from administrative and tax bodies.

TRADE UNIONS The trade unions are emphasizing that this issue needs to be resolved through tripartite approach and social dialogue, and that it needs to be placed in the focus of Social-economic Council, on the level of the Republic as well as on local levels. The labour market reform and education system reform are also required, as well as defining of social policy which will contribute to the promotion of employment and increase in employment level.

INSPECTION There are 40 inspection services which exist within 16 state bodies with the total number of around six thousands inspectors. This figure looks very impressive for different reasons, but it is not so impressive from the perspective of practical fight against informal economy.

SOCIAL PARTNERSHIP Activities planned for reduction and gradual elimination of informal work must be of interest not only for trade unions (protection of workers’ rights and better social position of the employees), but also for the employers (elimination of unfair competition) and for state (increase of budget). In this way we will realize full social partnership in those activities.

How to achieve that: through institutional forms of social dialogue (SES on all levels, tripartite bodies); cooperation with executive authorities at all levels; cooperation with political parties; cooperation with non-governmental and other civil society organizations; lobbying with different political representative groups; actions in Parliament (observer role); permanent, wide and levelled education and building of capacities of leaders and trade union members; through transparent activities; raising of awareness and knowledge on seriousness of this problem with all segments of society – employees, trade unions, employers, public and state; support to legislative and regulative framework which would resolve this problem; education and provision of assistance to employees in informal sector; instigation of collective representation, transfer from informal to formal sphere and organization into trade unions; planning and implementation of campaigns.