Trade Unions in Transformation: Social protection for informal economy workers
Pathways of trade union revitalization: trade unions play a central role in extending social protection for workers in the informal economy
19 September 2022
The ACTRAV policy brief on “Extending social protection coverage to informal economy workers: What workers’ organizations need to know”, was introduced at the occasion of the 5th meeting of the Social Protection, Freedom and Justice for Workers Network, which took place on 5 July 2022 and discussed more in-depth at the launch of the ACTRAV Social Protection Resource Package on 14 September 2022.
Whereas trade unions worldwide often work in very complicated environments, many positive experiences exist of trade unions that revitalize and transform through providing innovative services and representing those workers that need it the most, through advocating on those topics that matter, or through entering into campaigns and networks with other unions and civil society. Trade unions supporting workers in the informal economy and advocating for the extension of social protection are considered as positive examples of trade unions revitalization, addressing the needs of most vulnerable workers.
Despite progress in recent years in extending social protection in many parts of the world, the Covid-19 crisis has exposed and often aggravated deep-seated inequalities in the world of work, including widespread gaps in social protection.
Ms. Maria Helena André, Director of ACTRAV, highlighted that “Workers organizations should regard Covid-19 as a wake-up call, a wake-up call for contributing to building forward better together; and the achievements during the crisis should serve as a steppingstone for a recovery for all, including workers in the informal economy”.
ACTRAV’s Senior Social Protection Specialist, Ms. Ursula Kulke reminded us that “today, more than 60 per cent of the global workforce, two billion men and women, are in informal employment”. She added that “multiple factors give rise to social protection coverage gaps for informal economy workers, including exclusion from legal coverage, lack of information and representation, lack of enforcement and low compliance as well as high costs, complex administrative procedures, and lack of policy coherence”.
Workers organizations play a central role in servicing and representing workers in the informal economy. The extension of social protection to all workers can provide minimum income security and access to health care to the most vulnerable workers, but also offer a pathway to facilitate the transition to the formal economy.
Ms. Reema Nanavaty, Executive Director of the Self-Employed Women’s Association (SEWA), India stressed that “there is a need to design affordable social protection products and services that address the needs of informal economy workers and address the challenges of their livelihoods”.
Introduction
Trade unions have important challenges ahead of them to stay relevant in the rapidly changing world of work of today and tomorrow. This is particularly relevant in a context of multiple uncertainties, such as the Covid-19 pandemic and other socio-economic climate and political crises, where trade unions’ resilience and ability to innovate and transform are key.Whereas trade unions worldwide often work in very complicated environments, many positive experiences exist of trade unions that revitalize and transform through providing innovative services and representing those workers that need it the most, through advocating on those topics that matter, or through entering into campaigns and networks with other unions and civil society. Trade unions supporting workers in the informal economy and advocating for the extension of social protection are considered as positive examples of trade unions revitalization, addressing the needs of most vulnerable workers.
Despite progress in recent years in extending social protection in many parts of the world, the Covid-19 crisis has exposed and often aggravated deep-seated inequalities in the world of work, including widespread gaps in social protection.
Ms. Maria Helena André, Director of ACTRAV, highlighted that “Workers organizations should regard Covid-19 as a wake-up call, a wake-up call for contributing to building forward better together; and the achievements during the crisis should serve as a steppingstone for a recovery for all, including workers in the informal economy”.
ACTRAV’s Senior Social Protection Specialist, Ms. Ursula Kulke reminded us that “today, more than 60 per cent of the global workforce, two billion men and women, are in informal employment”. She added that “multiple factors give rise to social protection coverage gaps for informal economy workers, including exclusion from legal coverage, lack of information and representation, lack of enforcement and low compliance as well as high costs, complex administrative procedures, and lack of policy coherence”.
Workers organizations play a central role in servicing and representing workers in the informal economy. The extension of social protection to all workers can provide minimum income security and access to health care to the most vulnerable workers, but also offer a pathway to facilitate the transition to the formal economy.
Ms. Reema Nanavaty, Executive Director of the Self-Employed Women’s Association (SEWA), India stressed that “there is a need to design affordable social protection products and services that address the needs of informal economy workers and address the challenges of their livelihoods”.
Key issues
Building on positive experiences worldwide, countries have adapted different measures to extent social protection to workers in the informal economy. Measures include:- extending legal coverage, taking into account the situation of different groups of workers;
- redefining the concept of “employee” in the social security legislation;
- lowering or removing minimum coverage thresholds with regard to enterprise size;
- adapting financing mechanisms, enhancing coordination and reducing fragmentation in social security systems (e.g. by reducing costs, simplifying registration, developing simplified schemes, subsidizing contributions, etc.);
- adapting the level, frequency, calculation and collection of contributions, for instance taking into account income fluctuations or seasonal revenues;
- simplifying administrative procedures, facilitating access and ensuring portability and transparency (e.g. integrated service delivery, mobile/electronic access points);
- ensuring adapted inspection, compliance and incentive mechanisms;
- strengthening awareness-raising and information, targeting specific categories of workers;
- facilitating organization of workers (e.g. through collective registration agreements); and
- strengthening incentives for formalization (e.g. through public procurement policies; tax incentives for employers of domestic workers).
Good practices
Many good practices exist already where trade unions have been able to successfully support the extension of social protection to workers in the informal economy. And we can learn from these.- Most recently, in the context of the Covid-19 crisis, the Georgian Trade Union Confederation (GTUC) has launched a nation-wide campaign to support the registration of self-employed and informally employed market vendors, to allow access to government support during the lockdown;
- Trade unions also entered into partnerships with workers’ and employers’ organizations, civil society organizations and development partners to pool resources towards strengthened social protection for workers in the informal economy. In the Philippines, a joint campaign was organized around domestic work. In Tunisia, trade unions participated, at the side of employers, in a government campaign on the reform of the social security system;
- Ms. Francisca Jiménez from the Confederation of Autonomous Classical Trade Unions (CASC) of the Dominican Republic provided an example where the trade union through its Mutual Association of Solidarity Services (AMUSSOL) acts as a “virtual employer in order to support the registration of workers to the social security system”.
Mobile applications to extent social protection to workers in the informal economy
The JKN mobile application in Indonesia is an ICT-based one-stop shop for health insurance. The application is tailored to the needs of health insurance members and allows them to register, update personal data, access the digital participation card and submit complaints. The National Social Insurance Fund (IPS-CNPS) of Côte d’Ivoire has facilitated the declaration of worker data by employers through the introduction of an electronic tool. The Fiji National Provident Fund created an online portal through which employers can report their social security declarations. The Social Security Office (SSO) of Thailand initiated a digital service reform to incentivize electronic contribution payments for employers via computers and mobile phones and to provide insured persons with access to relevant information (such as registered hospitals, contribution and claim records and retirement savings).Trade union priorities
The policy brief suggests a number of trade union priorities to enhance access to social protection for workers in the informal economy, and with that advancing their agenda on trade union transformation:- Through effective and inclusive social dialogue, trade unions can contribute to coordinated policy responses to extent social protection to workers in the informal economy (e.g. during Covid-19 and its recovery). Workers in the informal economy have often been excluded from or being under-represented in social dialogue institutions and processes. Trade unions can increase their representative capacity through innovative strategies and services to attract, retain and represent all workers, including through partnerships with workers in the informal economy and their representative organizations. Furthermore, trade unions’ participation in the governance of social protection are key to ensure comprehensive and adequate social protection for all workers;
- Trade unions need the technical knowledge on social protection and informal economy to weigh effectively on policy making at different policy levels;
- Trade unions have an important role to play in the ratification, implementation and monitoring of International Labour Standards (ILS), such as Convention No. 102 on Minimum Standards of Social Security, Recommendation No. 202 on Social Protection Floors and Recommendation No. 204 on Transition from the Informal to the Formal Economy;
- Workers’ organizations can use the ILO’s assessment tool to raise awareness on key issues to extent social protection to workers in the informal economy ;
- Workers’ organizations play a central role in raising awareness of workers, but also employers and governments, about social protection rights and obligations;
- It is important that workers’ representatives engage with broader policy processes at the national (e.g. structural transformation, trade and investment, etc.) and international levels (e.g. Sustainable Development Goals) to enhance overall policy coherence.