ILO Regional Seminar on the Role of Trade Unions in Facilitating the Transition from the Informal to the Formal Economy

The seminar invites around 42 participants, including 30 persons from trade unions in South Asia and ACFTU in China as a donor organisation, as well as 12 resource persons

The ILO adopted the Recommendation No 204 on the transition from the informal to the formal economy at the 104th ILC in June 2015. It provides practical policy guidance to ILO member states that can facilitate the transition from the informal to the formal economy. The strategies of the Recommendation are to
  • to facilitate the transition of workers and economic units from the informal to the formal economy;
  • to promote the creation of enterprises and decent jobs in the formal economy, and
  • to prevent the informalization of formal jobs.
The methods to facilitate the transition include (i) increasing workers’ welfare and reduce decent work deficits; (ii) reducing unfair competition between enterprises; and (iii) protecting and expanding public revenues to build a national social protection system.
As policy guidance, the member states are recommended to promote wage-led growth and job-centred macroeconomic policies in order to enable the creation of formal jobs in formal enterprises. The rapid growth in global supply chains could be a threat to informal employment, so particular attention should be given to the employment relationship and labour rights in global supply chains. Income security for workers in the informal economy is a critical element for facilitating the transition. Hence the minimum wage rate and the concept of a minimum living wage has to be properly determined by a national wage-setting mechanism. Fundamental principles and rights at work are a key element in the transition to the formal economy. However there are many gaps in the compliance with labour standards. Establishing an effective legal framework with good enforcement mechanisms like labour inspection is crucial. Freedom of association and the right to collective bargaining is an essential part of the transition for formality. “Organising” could be an entry point to increase the representative role of informal workers in social dialogue mechanisms. The coverage of social security for workers in the informal economy is fundamental to realizing workers’ rights. The extension and strengthening of social protection is essential, in line with the ILO’s Social Protection Floor Recommendation, 2012 (No. 202). The proposed policies of the ILO Recommendation can be adopted in the context of the national practices and legislation. A tripartite consultation mechanism should take place at national level to monitor its implementation, and trade unions should be part of such a monitoring system. Social dialogue and tripartism is a foundation to make the transition process inclusive and successful.

The Recommendation highlights the following policy guidance in the area of legal and policy frameworks, employment policies, rights and social protection, incentives, compliance and enforcement, freedom of association, social dialogue and role of employers’ and workers’ organisations, data collection and monitoring, and implementation measures.


The workshop is aimed at:
  1. Introducing the concepts and policy guidance of the ILO Recommendation No 204 to the participants;
  2. To exchange international experience, knowledge and good practices of facilitating the transition by social partners, especially by trade unions;
  3. Identifying key areas of union action to facilitate the transition for formality; and
  4. Mainstreaming gender issues in the discussion of the transition.


  1. The participants were fully aware of the concepts and policy guidance of the ILO Recommendation No 204, and adopted relevant policies as union actions for facilitating the transition;
  2. International experience, knowledge and good practices of facilitating the transition were shared to replicate those in union actions;
  3. A regional union action plan to facilitate the transition was developed.