Law and the Informal Economy

Photo: Paula Bronstein/Getty Images Reportage

  

WIEGO Specialists

Marlese von Broembsen
Director,
Law and the Informal Economy

Pamhidzai H. Bamu-Chipunza
Africa Coordinator,
Law and the Informal Economy

Tania Espinosa Sánchez
Latin America Coordinator,
Law and the Informal Economy

Laws are essential to improving informal livelihoods. Legal frameworks, however, are most often designed with a formal economy in mind and fail to protect and support informal workers and livelihoods. Legislation, and the way it is enforced, often criminalizes or excludes informal workers’ livelihood activities. WIEGO’s Law Programme aims to analyze and improve legal and regulatory frameworks for informal workers and to build the capacity of informal workers’ organizations to know and use the law to fight for their recognition and rights as workers – at the local, national and international level.

The Law Programme, which was launched in October 2015, builds on WIEGO’s Law and the Informal Economy Project, which was carried out in five countries between 2006 and 2014.

Legal Recognition of Informal Workers

Domestic Worker, PeruPhoto: Juan Arredondo/Getty Images Reportage

Informal workers – like all workers – require a regulatory framework that protects their rights in the workplace and promotes stability and security. An appropriate legal framework can encourage economic development that allows informal workers to achieve their full potential as workers and often as micro-entrepreneurs.

It is widely assumed that informal workers, businesses and activities operate outside the reach of the law. However, in many countries, they are regulated in ways that are punitive. Most often, informal workers and businesses are excluded from labour, employment and business legislation, and are denied the rights and entitlements afforded to formal employees and businesses. At the same time, informal workers, businesses and activities are regulated by a complex range of national, sector-specific and city-level legislation that are punitive in their effect, compromising their livelihoods and often violating their human rights. Police harassment of informal traders is ubiquitous, contravention of legislation is most often treated as a criminal offence, and informal workers are denied basic due process protections under rule of law.

In most countries, the legal framework focuses only on formal relationships, which for workers means labour and employment legislation based on an employer-employee relationship. Policy for informal workers is either in the form of small business support (with an emphasis on supply-side interventions such as micro-finance and business training), or poverty-alleviation projects (particularly for women, who are over-represented in most low-income sectors). Informal workers - whether own-account workers, industrial outworkers that participate in global value chains, or atypical wage workers whose rights have been eroded through corporate outsourcing and subcontracting - want to be recognized as workers, who make substantial contributions to the economy.

Formalizing the informal economy should mean extending recognition, voice, economic opportunity, social protection and due process to informal workers – in short, realizing “decent work” for the informal economy. It means building the organizational strength and capacity of informal workers to claim rights as workers and citizens, and crafting new conceptual frameworks that enable the legal recognition and protection of informal workers.

Goals & Activities

Rattana Chalermchai works with her husband Mongkol at home. Photo: Paula Bronstein/Getty Images Reportage

The goals and activities of the Law Programme are:

  • To provide resources that build the capacity of organizations of informal workers to advocate and negotiate for legal change.
  • To provide legal and technical support to organizations of informal workers in their advocacy efforts for legal change, and in realizing rights and entitlements in Constitutions and existing legislation at the national and international level.
  • To develop good practice resources on law and informal workers that meet the differing needs of MBOs, legal practitioners, legal academics, governments, NGOs and others.

Support organizations of informal workers to advocate and negotiate for legal change

We work to support organizations of informal workers to use global standards and frameworks in local mobilization and advocacy efforts. For example:

Together with WIEGO’s Organization and Representation Programme, we are participating with trade unions, civil society organizations, informal worker organizations, government agencies and the ILO in South Africa and Malawi to implement the ILO’s Recommendation 204 on Formalizing the Informal Economy.

In 2016, we ran a workshop with waste pickers from the Latin American Network of Waste Pickers on using international human rights frameworks to advocate for their human right to work. This is part of a larger project that aims to support waste picker organizations from six Latin American countries in asking for a hearing at the Inter-American Commission for Human Rights.

In Thailand we are working with HomeNet Thailand on the Implementation of the Homeworker Protection Act.

Provide legal and technical support to organizations of informal workers in their bargaining, negotiations, advocacy and implementation processes

Together with other WIEGO Programme teams, we support informal workers in global advocacy processes, such as Habitat III and the annual International Labour Conference (ILC). At the 2016 ILC General Discussion on decent work in global supply chains, we supported a delegation of informal worker leaders to make their voices heard on behalf of homeworkers. In the lead up to the ILC, we provided support, in collaboration with HomeNet South Asia and HomeNet Southeast Asia, to homeworkers in 18 countries in developing a collective platform of demands, which was disseminated at the conference. As a result of their advocacy efforts, homeworkers were recognised as part of the supply chain in the official Conclusions to the conference.

We have also made submissions and contributed to the inclusion of homeworkers in the revised OECD Due Diligence on Responsible Supply Chains.

To challenge current legal frameworks that exclude, penalize or criminalize the livelihood activities of informal workers, and to contribute to the re-conceptualization of law to include and protect informal workers

We aim to challenge mainstream assumptions about law and informal workers (namely that informal workers operate outside the law, or that their work is criminal), at multiple levels – including by engaging in global agenda-setting processes. For example, in 2016, we participated in the United Nations Secretary General’s High Level Panel (UN HLP) for Women’s Economic Empowerment, which was created to define an actionable agenda for improving economic outcomes for women in the context of the 2030 Sustainable Development Goals. WIEGO’s Law Programme contributed to the UN HLP in several ways: including by producing a policy brief on Eliminating Legal Barriers from the Perspective of the Informal Economy, participating in roundtable discussions and regional consultations, and serving on the working group on legal barriers. 

To develop resources on law and informal workers that meet the differing needs of MBOs, legal practitioners, legal academics, governments, NGOs and others

  • WIEGO’s Legal Briefs describe the legal environment facing informal workers, and analyze legal strategies and precedent-setting cases that may lead to more secure livelihoods.
  • WIEGO’s Law Microsite includes a range of resources, publications and information on legal frameworks, relevant for use by lawyers, practitioners and membership-based organizations of informal workers alike.

Notable Gains

Head Porter, GhanaPhoto: Jonathan Torgovnik/Getty Images Reportage

2016 International Labour Conference

As a result of interventions by the WIEGO delegation, the official Conclusions coming out of the discussions at the 2016 ILC includes text which recognizes homeworkers as being part of global supply chains. The Conclusions also acknowledge the ILO Convention on Home Work (C177) as one of the instruments that the ILO should use in developing a programme of action to address decent work in global supply chains.

Mexico City’s Recommendation 07/2016 on Waste Pickers Rights

In 2016, the Human Rights Commission in Mexico City passed Recommendation 07/2016 on the inclusion of waste pickers in the city’s waste management system. It is the first official document to place on record the discrimination and abuse that waste pickers suffer, and to acknowledge the shortcomings of the city’s waste management public service.

We were involved in advocacy work highlighting the omission of informal workers (waste pickers) in the city’s waste management service, and in raising awareness about the working conditions of waste pickers.

Evaluating the potential of existing governance mechanisms to protect homeworkers

The Global Labour University, a network of trade unions, universities and the International Labour Organization (ILO), commissioned WIEGO’s Law Programme to evaluate existing governance mechanisms to determine whether and how well they might protect homeworkers. At an October workshop in Kathmandu, (sponsored by Friedrich Ebert Stiftung), a paper by Law Programme Director Marlese Von Broembsen was workshopped with trade unions, the Trade Union Advisor to the OECD, and homeworker organizations from Cambodia, India, Nepal, Pakistan and Bangladesh.

The International Trade Union Confederation (ITUC), which represents 168 million workers, successfully argued for an update to the ILO’s MNE Declaration (concerning multinational enterprises and social policy) to incorporate the UN Guiding Principles on Business and Human Rights. The MNE and OECD processes are defining, in very concrete terms, what brands must do to (a) identify human rights abuses; (b) protect vulnerable workers in their supply chains from abuses; (c) prevent abuses and if they do happen, mitigate their effect; and (d) report how abuses in supply chains are being addressed. It is crucial for organizations that represent homeworkers to be involved in establishing these responsibilities. The Nepal workshop was the first step in this process.

Legal change for domestic workers in Mexico

In 2017, we organized a Latin American regional exchange of domestic workers. Over 30 domestic workers from Mexico, Argentina, Chile, Costa Rica, Jamaica and Uruguay met in Mexico City to share experiences and discuss strategies on social security legislation and ratification of C189 (ILO Convention 189 on Domestic Workers). The outcome was a platform of demands, which was presented to the Mexican Senate on March 29th, Domestic Worker day in Latin America.

Past Activities

Resources on Law and Informal Workers

The Law & Informality Project microsite includes:

  • Law Observatory of legal documents on the informal economy that WIEGO and its partners have collected from different jurisdictions worldwide
  • Country Reports about WIEGO's project on Law and the Informal Economy
  • Legal Briefs exploring selected topics 

Legal resources relevant to specific sectors: