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 and union membership What does denial of employment relationship do? - Precarious employment, Unprotected worker, - Increase in legal disputes - Shifting of business risks & liabilities from employer to worker, society & govt (in case of accident, for social security, employment) - what else?

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 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 BUT its role in regulating 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 Issue: How do we make laws, regulations & their interpretation 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

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 Wage earner status of workers A fixed Work place – factory/firm/establishment But the changing world of work, flexible labour markets, rise of informal economy employment & disguised employment relationships 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 to implement measures concerning employment relationships.

Determination of Employment Relationship 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 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.

Determination of Employment Relationship National law/regulations should include indicators of the existence of employment relationship – such as – the level of control the employer has over worker’s activities whether the worker provides his/her own equipment whether the workers hires his/her own helpers the degree of financial risk taken by the workers the degree of responsibility for investment & management by the worker 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 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 Promote the role of collective bargaining & social dialogue as a means to finding solutions to work place problems Monitoring & implementation mechanism – & involvement of workers & employers organizations

Negotiating change at national level … Ensure Right to Organize & Right to Collective Bargaining! 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)