Trade unions in the informal sector: Finding their bearings Nine country papers Labour Education 1999/3 No.116 Contents Editorial V Africa Ghana Organizing informal sector workers requires nurturing dynamic links with the relevant public authorities and institutions, both national and international, that can provide the necessary support, by Kwasi Adu-Amankwah 1 Kenya To represent informal sector workers, the trade unions need to set in place an enabling legal environment by using their channels of communication with the Government to bring the plight of these workers to the attention of those in authority, by Noah Chune and Lawrence Egulu 15 Asia India The interests of the organized and the informal sectors are considered conflictual: organized labour, privileged and protected, sees unorganized labour in the informal sector as a threat to the perpetuation of their current position, by C. S. Venkata Ratnam 25 The Philippines Trade unions can play an important role in bridging the informal sector and policy bodies and institutions and at the same time develop the sector’s capacity to understand pertinent issues and to negotiate with the proper authorities, by Sandra Yu 48 Europe Bulgaria In conditions of declining industries, inefficient social dialogue and falling membership, trade unions need to mobilize potential local actors, social partners and interest groups and draw support from central policies which could provide the necessary dynamics for change at the local level, by Grigor Gradev 67 Hungary The major difficulty in addressing the issue lies in the broad alliance of strong interests to maintain the informal sector in place: while it undermines public services, weakens social protection, interferes with economic competition and enfeebles trade union strength, it also contributes to the survival of the most vulnerable groups of labour who have lost their positions in the labour market, by L. Héthy 84 Italy It is apparent that trade unions need to take steps to secure the representation and protection of workers engaged in the many new patterns of work which have come to the fore in order to avoid improper competition in worker- recruitment methods leading to segmentation and conflict in the representation of the federal trade union, by B. Angeloni; M. Giovine; M. Marocco; A. Mocavini; V. Parisi; C. Prestileo; C. Tagliavia 95 III Latin America Colombia For Colombia’s trade union national centres, the organization and claims of informal sector workers have not so far been a priority in their present platform and day-to-day business, but they must take prompt action to set up activities aimed at organizing and training informal sector workers and responding to their claims, by Ofelia Londoño Urrego 117 El Salvador Trade union organizations must understand the important contribution of the informal sector to the country’s social and economic life, the trend towards informalization of work, and hence the need to organize the sector, not only because of their role in improving the living conditions of workers, but also because the very future of the trade union movement largely depends on organizing in this sector, by José Víctor Aguilar Guillén 135 IV Editorial For a long time, the informal sector has been regarded as a passing phenomenon linked to the cycle of economic development. Current sta- tistical data representing the product of over 30 years’ analysis and expe- rience have proved this not to be the case. Throughout recent decades, instead of disappearing as the modern economy expanded, the informal sector has actually grown in the rural and urban areas of most developing countries. At the same time, the indus- trialized countries have witnessed a gradual evolution of the informal sec- tor within their labour markets. This process has manifested itself in the burgeoning of more vulnerable forms of employment and income erosion in traditional sectors. Lauded by some experts for its job potential and the dynamism it brings to the economy, tolerated by others for its role as a social stabilizer, and often criminalized as a source of exploitation and social exclusion, the informal sector has not become any less of a reality in the context of globalization, which holds great promises as the century draws to a close. Since the beginning of the 1970s the informal sector has been the focus of increasing attention in international discussion on economic development. The International Labour Organization has undoubtedly played a major role in understanding the phenomenon and in formulat- ing policies governing the sector. The traditional policy advocated and implemented by the International Labour Office adopts a positive and integrated approach, combining the promotion of productive potential and employment in the sector and the improvement in the welfare of the groups concerned through the establishment of appropriate protective measures. Thirty years of ILO experience have demonstrated that the two above-mentioned objectives are not irreconcilable. It is worthy of note, however, that taking the developments on the international labour mar- ket in recent years into account, the ultimate goal of the ILO, namely, the gradual integration of the informal sector into the modern economy, is far from being achieved. This calls for reflection on the policies affecting the sector, on the part of the parties involved, including workers’ organiza- tions, and reinforcement of those policies. The recent ILO report entitled “Decent Work”, presented by the Director-General at the 87th Session of the International Labour Confer- ence in June 1999, has once again sanctioned the constitutional mandate of the Organization with regard to the improvement of working condi- tions in both formal and informal economies. The informal sector there- fore occupies a key position in the ILO policy agenda and will be at the core of the work of the Organization in the years to come. For several years the discussions and work of trade union organi- zations have displayed heightened interest in the informal sector, both nationally and internationally. There has been more and more agreement within the trade union movement on the need to provide appropriate responses to the problems facing workers in the informal sector and this V need is a pressing concern for many trade unions in developing countries. Despite broad recognition of this fact, there remains some doubt, within the trade union movement, as to the most appropriate measures to be implemented. It goes without saying that the informal sector presents sev- eral challenges to the movement. From a strictly economic point of view, the existence of the informal sector is more of a survival strategy, in the absence of employment alternatives, than a viable response to poverty and unemployment. In spite of its often significant contribution to the GNP of developing countries, an economic sector operating in general outside the legal, administrative and social framework would be an obsta- cle rather than a vector for growth and sustainable development. On the other hand, the deplorable conditions under which workers in the infor- mal sector operate violate the very principles which trade unions strive to uphold. For a long time, some commentators have suggested that the union- ization of workers in the informal sector is not within the competence of trade unions. Past and recent history disproves this claim: the situation facing most workers during the industrial revolution was strikingly simi- lar to the plight of workers in the informal sector in developing countries today. They suffer all forms of abuse, long work days, unstable employ- ment, low and irregular wages, and have neither rights nor protection. The argument in favour of the creation of trade unions is inspired by the desire to grant these workers a “voice”, to represent their interests and thereby lift the yoke of exploitation. This can be achieved only through the establishment of a legal framework, based principally on labour codes and industrial relations systems as we know them today. Clearly, the environment in which informal sector workers operate is considerably different from the prevailing environment in the modern economy. Traditionally, trade unions have targeted workers in a relation- ship of net dependence with respect to their employers, in a fixed work- place, with contracts which were more or less stable. In reality, none of these features usually apply to workers in the informal sector. This is a partial explanation for the difficulties now facing trade unions in organ- izing workers in the informal sector. The rigidity of the regulatory frame- work, heterogeneousness of work relationships, mobility and often invis- ibility of the workforce, inadequacy of union structures, and a dearth of human and financial resources are some of the factors which impede the work of traditional unions in the informal sector. Nevertheless, as stated in the following pages, union experience in this area is now multiplying and developing somewhat all over the world. Experience seems to show that the capacity of unions to take into account the needs and interests of these “new” workers can only expand through change at the level of policy, strategy, service, and even through changes of a structural or statutory nature. It is indeed a long-term process, but one which will ultimately reap benefits for the workers concerned, trade unions and for society as a whole. A provisional edition of this issue appeared on the eve of the ILO International Symposium on Trade Unions and the Informal Sector (Geneva, 18-22 October 1999), aimed at workers’ organizations to discuss the unionization of the informal sector. The ILO Bureau for Workers’ Activities promoted discussion among the participants and, at the same time, stimulated broad thinking within the trade union movement with a view to formulating policies which respond effectively to the needs of workers in the informal sector. Through its wealth of information on actual VI and diverse experiences, this publication complemented the more stra- tegic document prepared by the Bureau to serve as a working paper at the Symposium.