Asian Labour Law Review 2008 Ii Asian Labour Law Review 2008 ASIA MONITOR RESOURCE CENTRE
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Rights for Two-Thirds of Asia: Asian Labour Law Review 2008 Asian Labour Law Review 2008 ASIA MONITOR RESOURCE CENTRE The Asia Monitor Resource Centre (AMRC) is an independent non-governmental organization which focuses on labour concerns in the Asian region. The centre provides information, research, publishing, training, labour networking, and related services to trade unions, labour groups, and other development NGOs in the region. The centre’s main goal is to support democratic and independent labour movements in the Asian region. In order to achieve this goal, AMRC upholds the principles of workers’ empowerment and gender consciousness and follows a participatory framework. Rights for Two-Thirds of Asia: Asian Labour Law Review 2008 Published by Asia Monitor Resource Centre 2008 Editorial Team: Doris Lee, Apo Leong, Rene Ofreneo, Anoop Sukumaran Steering Committee: Dae-oup Chang, Doris Lee, Lucia V. Jayaseelan, Apo Leong, Rosalinda Ofreneo and Irene Xavier With grateful acknowledgement of the teamwork and contributions of all AMRC staff to this project in diverse ways, from identifying chapter writers to editing and fact-checking, and all the necessary work in between and beyond until the publication could be completed: Sally Choi, Omana George, Ah-king Law, Apo Leong, Annie Luk, Sanjiv Pandita, Anoop Sukumaran and Winnie Wo. Also deep thanks to our interns who contributed during this time: Diana Beaumont, Agung Hermawan and Sri Wulandari. With grateful acknowledgement of copy-editing/translation assistance from: Suki Chung, Carol Dyer and N. Jayaram Layout by Clear-Cut Publishing & Printing Co. Cover Design by Clear-Cut Publishing & Printing Co. Copyright Asia Monitor Resource Centre Ltd, 2008 All rights reserved Articles may be reproduced in non-profit publications; credit is requested ISBN-13: 978-962-7145-36-3 ISBN-10: 962-7145-36-X For more information contact Asia Monitor Resource Centre Flat 7, 9th Floor, Block A Fuk Keung Industrial Building 66-68 Tong Mi Road Kowloon, Hong Kong Tel (852) 2332 1346 Fax (852) 2385 5319 URL http://www.amrc.org.hk Cover photo: Background photo: Asian Women Workers’ Center – part-time women and youth workers marching for part-timers’ rights Foreground photos, top to bottom: Asia Monitor Resource Centre – Rally of Indonesian migrant workers in Hong Kong Hong Kong Women Workers’ Association – home-based garment worker; sub-contracted street cleaner Introduction Rights for Asia’s Invisible Majority, Social Justice for All Working Women and Men Rene E. Ofreneo, Ph.D. Asia’s Jobless Growth and Ever-Expanding Informal Economy n its 2006 Human Development Report for the Asia-Pacific, the United Nations Development I Programme (UNDP) wrote that the fast-growing region has embraced free trade. Then it asked rhetorically: Has free trade embraced Asia’s poor? The answer by the contributors to the 2008 Labour Law Review is a uniform ‘no’. While much has been written about the relative success of the Asia-Pacific region under globalization, the reality is that growth has been unequal and exclusionary in most countries. The majority in society have not benefited from the growth process even in the new dragon economies of China and India. As the UNDP has observed, growth in the Asia-Pacific region is a ‘jobless’ one. Which is the reason why International Labour Organization Director-General Juan Somavia, in his Making Decent Work an Asian Goal1 remarked that there is a huge ‘decent work deficit’ in the region, with employment creation lagging behind Asia’s vaunted trade openness. The observation on the jobless growth pattern is further corroborated by the lengthy statistical analysis made by Jesus Felipe and Rana Hasan of the Asian Development Bank, who documented the steep decline in employment elasticities in Asia in the globalization decade of the 1990s.2 For example, China’ s employment elasticity went down from 0.33 to 0.129. This jobless growth phenomenon, reflected in the high unemployment and underemployment rates in the individual Asia-Pacific countries, is fuelling another startling phenomenon – the swelling army of informal workers or ‘informals’ everywhere. The large informal economy covers a galaxy of ‘unregistered’ and usually ‘unregulated’ economic activities taking place in agriculture, industry and in the rapidly-growing service sector. Workers in the vast informal economy include self-employed farmers, seasonal agricultural workers, home-based producers, ambulant peddlers, unregistered migrants, backyard mechanics, informal construction workers and others doing all kind of jobs unregulated by any protective labour laws. In their 2002 International Labour Conference, the ILO tripartite members approved the Resolution adopting the more all-encompassing term ‘informal economy’, instead of the term ‘informal sector’, in order to capture ‘all economic activities that are in law or practice not covered or insufficiently covered by formal arrangement’. Statistics on the informals vary and the statistical methods of counting them also vary in the Asia-Pacific.3 In Bangladesh, formal employment applies only in establishments with 10 or more employees, meaning jobs in enterprises with less than 10 employees are by implication v Asian Labour Law Review 2008 considered informal. Similarly, in Pakistan, the measurement for formal employment is in terms of the number of employees – 20 or more for non-industrial and 10 or more for industrial establishments. In India, informal employment is simply any employment outside the ‘organized sector’ consisting of the public sector, recognized educational institutions and enterprises registered under the Indian Factories, Co-operative Societies and Provident Fund Acts. In Indonesia, the informals are the own-account workers, self-employed assisted by family members, farmer employees and unpaid family workers. In the case of the Philippines, informal employment includes the self-employed, unpaid family workers and those employed in enterprises with less than 10 people. Thailand, on the other hand, has introduced a more nuanced definition: ‘informal sector’ includes enterprises operating with a low level of organization on a small-scale, with low and uncertain wages and with no social welfare and security. China defines the informal sector as the totality of small-scale economic units that are not legally established or registered, consisting mainly of microenterprises, family enterprises and independent service persons. Malaysia’s informal definition is focused on the individual workers – the unprotected workers who are not covered by the social security system or the Employees Provident Fund and the self- employed, including unpaid family workers. The ILO estimates informal employment in the Asia-Pacific region to be around ‘65 per cent of non-agricultural employment, as compared with 48 per cent in North Africa, 51 per cent in Latin America and 72 per cent in sub-Saharan Africa’ (ILO, 2007).4 This the ILO said is one reason why 50 per cent of Asia’s work force, roughly 900 million, subsist on $2 or less a day. The India country paper in this Review gave the highest rate of informal employment in Asia—a whopping 93 per cent of the total employed work force. This means the well-publicized two million jobs in the ‘sunshine’ ICT-enabled BPO sector of India are just a drop in the country’s 400-million labour market bucket, composed mostly of informal workers in the urban areas and landless rural poor in the countryside. Other country papers reported high informal employment – Cambodia, 85 per cent of the work force (or 6.8 million); Indonesia, 63.8 per cent (60.7 million); Pakistan, 82.7 per cent (39.7 million); Philippines, 76.34 per cent (24.6 million workers); Thailand, 67.8 per cent (22.1 million); and Vietnam, 77 per cent (33 million). Statistics on informal employment in Bangladesh, Myanmar, Nepal and Sri Lanka are unclear; however, all these countries are known to have high percentages of informal employment. China, Laos and Mongolia, which, like Vietnam, have shifted to a market-oriented management of the economy, have no precise statistics on formal-informal employment. However, these countries are known to have large ‘floating populations’ consisting of workers leaving the countryside and those displaced by the restructuring/privatization processes taking place in the state-owned enterprises (SOEs), which used to provide employment for the majority of workers. China alone has the formidable task of looking for jobs for the xiagang workers or ex- SOE employees and the more numerous rural migrants, estimated at one time to be around 100 million, endlessly streaming into China’s booming cities (Pringle, 2006: 13). These xiagang and rural migrants are augmented annually by the entry in the labour market of around five million young Chinese workers. As to Japan and the Asian NICs (Hong Kong, Singapore, South Korea, Taiwan and Malaysia), the expansion in informal employment is happening through two major routes — the absorption of a large number of overseas migrant workers with short-term employment contracts and the increased hiring of workers on a non-regular status (see discussion below), especially those deployed in their growing service sector. The ILO Regional Office in Bangkok (2007) estimated that there are at least 5.3 million overseas migrant workers eking out a living Introduction v in the labour-receiving countries of Singapore, Malaysia, Brunei and Thailand. These migrants literally constitute the ‘reserve army of labour’ for the Asian newly industrialized countries (NICs), occupying the ‘3D’ jobs (dirty, dangerous and difficult) in the host countries. The ‘Irregularization’ Mania Sweeping Asia A third and related labour market phenomenon in Asia is the massive ‘informalization’ or ‘flexibilization’ of work in the formal sector in both developing and developed Asian countries. The ‘regulars’ or ‘standard’ employees are now outnumbered by the ‘irregular’ or ‘non-standard’ agency, temporary, casual, part-time, migrant and subcontracted workers. In a survey of the labour flexibilization processes in East Asia, Ofreneo (forthcoming) came up with the following major findings: 5 .