Good Practices in Labour Administration

The campaign against undocumented labour

The case of Argentina

At the end of 1996 the Argentinian government launched a campaign to combat undocumented labour, the main goal being to reintegrate the workers into the legal economy. Apparently, 42.2 per cent of employed labour is not registered normally - that is, a total of 3.76 million workers.

Now that the programme has been running for two years the first conclusions can be drawn: although the programme has its limitations - owing, above all, to the progressive reduction in the priority assigned it in comparison with the initial periods - it has nonetheless made it possible to regularize the situation of a large number of workers. Without a doubt, one of the programme's added values, which should by no means be underestimated, is the ability demonstrated by the federal and provincial authorities to work together for a common goal.

This study was carried out on the basis of documents published by the Ministry of Labour and Social Security of Argentina and additional information provided.

Following a meeting of the Federal Council of Provincial Labour Administrations on 20 September 1996 (the Declaration of La Rioja), the Argentinian government launched the National Programme to Regularize Labour and Social Security (NPRLSS), on 4 November 1996, by means of an Act of Agreement between the Nation and the provinces.

The aim of this Act was, basically, to establish uniform criteria for determining principles of shared responsibility, cooperation and coordination between the State and the provinces, and to guarantee the efficient and homogeneous functioning of the various inspection services. Moreover, the Act asserts the ambition to homogenize supervision of the observance of labour regulations, which falls within the competence of the Central Authority and the Supervisory Body of the Labour Inspection Service.

This Act also refers explicitly to the provisions of ILO Conventions Nos. 81 and 129.

The main characteristic of the organization of this programme is the concept of "cooperative federalism". Given the structure of the Argentine State, in which the federal provinces enjoy considerable autonomy in numerous fields (including the implementation of labour laws), the setting up of a programme of this kind involves cooperation between the central and provincial labour services.

This is the first time that such a campaign - that is, one planned and coordinated jointly by the State and the provinces - is being implemented in the field of labour inspection.

The main objective is to detect and regularize unregistered employment.

Furthermore, there are two secondary objectives:

• to monitor the use of special contracting procedures;
• To ensure observance of the laws in respect of foreign workers.

This programme consists of joint monitoring operations carried out by the provincial services and the Ministry of Labour and Social Security (MLSS). The Ministry is responsible for planning the operations and provides the provinces with technical assistance and human resources.

A programme for combatting undocumented labour in Argentina can be successful only if the national and provincial authorities work in partnership.

To this end, a strategic plan comprising eight specific activities was drawn up in November 1996. The programme furthermore included an activity aimed at monitoring social contributions, so as to improve their payment. The legal basis for the programme is detailed in the "Urgency and Necessity Decree" No. 772/96.

How to guarantee mobilization of all the relevant services

Coordination between the relevant administrations - a main characteristic of the implementation of the programme - is guaranteed by the Supervisory Authority of the MLSS. The National Labour Relations Office (NLRO), which is dependent on this Ministry, checks that the regularized workers have been included in the Integrated System of Pensions and Allowances (ISPA) and follows this activity up using information provided by the provincial services.

If a worker is been regularized, the file is referred to the General Tax Office (GTO) which determines the amount owed by the employer.

The provincial labour inspection services fall within the competence of the provincial governments, which enjoy considerable autonomy with respect to the central government. This is why it was crucial for the success of the programme that stable relations be maintained with the other services involved: that is, the General Tax Office, the social security and the provincial services. No direct participation by trade union organizations or employers' associations was however envisaged.

Rigorous planning of the operation

At the beginning, three broad phases were defined:

1. November 1996 to March 1997,
2. June to August 1997,
3. September to December 1997,

thus demonstrating a clear will to plan the campaign. Specific objectives were set for each of the phases.

The initial objective of the first phase was to monitor 10 per cent of the 380,000 employers registered with ISPA.

In order to determine how many inspections needed to be carried out, the total number of workers per province was taken into account, on the basis of estimates provided by trade union organizations and the National Institute for Statistics and Censuses. The number of workers targeted for monitoring was thus set at 300,000.

In view of the experience gained in the first phase of the programme, the second and third phases had as priority to monitor and regularize the workers. It should be noted that, during the second phase, a special part of the programme was devoted to the National Operation for Inspecting Labour in the Cargo Transport Sector.

In 1998 a new orientation was adopted taking into account the results of the first phases. The new plan of action - the National Plan for Improving the Quality of Employment (NPIQE) - reasserted the goal of monitoring 700,000 workers.

The provincial labour services made use of the coordinated monitoring operation by basing themselves on the results of these activities, in accordance with which the employer was made responsible for presenting up-to-date personnel registers the next time the registers were checked. If the workers are not registered the provincial authority imposes sanctions.

The National Labour Relations Office elaborated the information papers and the analysis of this activity.

Significant budgetary means and human resources

The national and provincial labour inspection services conducted this campaign in accordance with the means available. The central administration lent the provincial services the necessary human and material resources to carry out the inspections, creating 90 teams made up of various services, with inspectors from the different participating organs (the National Labour Relations Office, the ANSES, and the General Tax Office). What is more, some fifty administrative employees were engaged for a ten-month period. A budget was also set aside for travel allowances.

The operational national statistics service was able to supply the necessary information to follow up this activity. In addition, it was planned to purchase 40 computers for the provincial services.

A dissemination programme about this campaign was carried out in which ten publicity notices and other written information were distributed.

The State and provincial budgets guaranteed remuneration of the staff and the necessary material means. The total amount planned was 8.4 million dollars, 3.2 of which came from Ministry funds while the rest was to be contributed by the provinces. A further 61,900 were to be used for dissemination purposes. No information is available as to the amounts actually spent.

Ongoing and realistic evaluation

In March 1998 a provisional overall evaluation was carried out on the basis of the as yet incomplete information available at the time.

Throughout, the process of combating undocumented labour was the subject of ongoing evaluation by the state services.

Most surprising to see on examination of the graphs summarizing the different activities was the great heterogeneity of the results depending on the province. What is more, this disparity differed considerably from one phase to the next, depending on the region.

For the first phase (supervision of 10 per cent of the employers), an implementation rate of 68.3 percent was registered as the national average: that is, 26,000 employers as against the 38,000 intended. In this first phase an average of 21.9 percent unregistered workers was ascertained among the 159,296 monitored.

In the second phase (monitoring the workers, including in the transport sector), 105,525 workers were overseen, 20 percent of whom were in the cargo transport sector (that is, a number 25 percent greater than was planned in the specific objective), which corresponds to an implementation rate of 64.2 percent of the defined objective. What is more, the transport operation made it possible to diagnose the situation in this sector.

The implementation rate of the third phase was a mere 26.3 percent, that is, 36,383 workers monitored.

These different phases revealed that there was a mean of 23.1 percent unregistered workers, out of a total of 301,204 workers, in 51,134 enterprises (including in the transport sector). One third of these workers were regularized following the intervention of the labour inspection services. This national mean encompasses considerable regional disparities.

It can thus be seen that, in 1997, somewhat less than half the goal originally set was achieved. The explanations given for this highlight the reduced mobilization of the services during the latter stages. This reduction was evident above all in certain provinces.

Even if the quantitative objectives were not fully attained, the programme contributed the following:

• greater efficiency in inspection, via the use of statistical information;
• education and information of the employers and workers;
• cooperation between the project participants;
• improved relations with the programme for monitoring social security contributions in sectors where ordinary methods do not work.

In 1998 a final evaluation of the programme was carried out which reasserted a target of monitoring 700,000 workers. It was estimated that around 20 percent of these still needed to be regularized as part of the national plan for improving the quality of employment.

Lastly, following a number of coordination and complementation agreements between the Labour Ministry, the Social Security Ministry, the Federal Administration of Public Income (FAPI), and the General Tax Office (GTO), the National Plan for Social Security Monitoring 1999 (NPSSM) was drawn up. This Plan provided for a forty percent increase in the operative capacity in terms of human resources, to be distributed across coordinating, monitoring and administrative functions. In addition, a direct link was established with social security data bases in all the provincial MTSS agencies around the country, thus enabling computerized supervision of employers' compliance with their obligations.

In the first phase of this Plan, 20,000 enterprises were monitored: that is, 117,000 workers, of whom 32 per cent were found to be without contributions to the Social Security System. Around 50 per cent of these workers were regularized without any kind of sanction being imposed, by means of an innovative method of monitoring and awareness-raising.

In this way, new impulse was given to this activity which concretized cooperation between the public institutions. As a result, combatting undocumented labour has become one of the services' permanent and routine activities.