Legislating for the Informal Economy: The challenges for labour law

1. Legislating for the Informal Economy: The challenges for labour law Kamala Sankaran University of Delhi India

2. Informal/ Unorganised Sector - India Unorganised workers consist of those working in the unorganised enterprises or households, excluding regular workers with social security benefits, and the workers in the formal sector without any employment/ social security benefits provided by the employers. (NCEUS) Kamala Sankaran IIRA Africa 2008

3. Informal/ Unorganised Sector- India • Size • Total employment 2005 – 457 million • Of which 393.4 million in the unorganised sector • 29.1 million in the organised sector of which • with legal coverage (53.3%), unorgzed (46.6%) • Total unorganised workers - 423 million • 92.4 % percent of total workforce Kamala Sankaran IIRA Africa 2008

4. Informal/ Unorganised Sector Diversity • Majority self employed • Agriculture (253 million): SE (65%), casual workers (35%) • Non-agriculturual million): SE (63%), casual (20%) • Home workers –either SE or dependant workers 8.2 million • High proportion of Scheduled Tribes and Castes, Muslims, OBCs Kamala Sankaran IIRA Africa 2008

5. Informal/ Unorganised Sector • Precariousness of those in the IE • Lack of employment security • Lack of work, social security • Poor – 1.25% poverty line – 44% • Vulnerable - <$2 PPP, • Poor & vulnerable - 77% • 836 million Kamala Sankaran IIRA Africa 2008

6. Need for IE legislation • Invisibility and exclusion in the law – • 0.4 percent of this sector covered by social security legislation • Centrality of the employment relationship in formal sector laws • Labour laws or general laws to deliver rights/benefits? Kamala Sankaran IIRA Africa 2008

7. Challenges of legislating for the IE • Restricted scope of coverage, numbers, remunerative, functional criteria; single versus sectoral laws • Federal structure central and state laws • Covering employees, self employed/own account in a single law, unpaid family labour, informal workers in formal sector • Bringing commercial relationships within labour law • Financing – general tax or tax on industry or traders? • Capacity of the state to enforce laws in this sector Kamala Sankaran IIRA Africa 2008

8. Legislativemodels • Social security State funding for employers’ contribution Contribution of self employed, income sharers Livelihood promotion- natural resources, employment guarantee Financing – cess, contributory, • Working conditions Computing wages for home workers, piece rate Customary practices - agriculture Kamala Sankaran IIRA Africa 2008

9. Legislative models • Implementation - Tripartite boards • Worker facilitation centres • Existing boards • Local Panchayati Raj institutions • Organizations trade unions employers • Self Help groups • Dispute resolution – tripartite conciliation committees, DRC, lok adalats, adjudication • Enforcement – self certification, inspector raj Kamala Sankaran IIRA Africa 2008

10. Inter-sectionality • Overlap between IE and vulnerable groups/communities • women and occupational segregation • Caste discrimination, bonded labour • Role of affirmative action/substantive equality approaches • Limits of labour law to deal with identities other than that of a ‘worker’ Kamala Sankaran IIRA Africa 2008

11. Choiceoflaw Labour law Contract law Constitutional Law Kamala Sankaran IIRA Africa 2008