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EURO–LATIN AMERICANPARLIAMENTARY ASSEMBLY

RESOLUTION:

Informal and undeclared work in theEuropean Union and the countries of LatinAmerica and the Caribbeanon the basis of the report by the Committee on Social Affairs, Youth and Children, HumanExchanges, Education and Culture

Co-rapporteurs: Eduardo Cáceres (Parlatino)Thomas Mann (European Parliament)

Thursday, 21 September 2017 – San Salvador

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EUROLAT - Resolution of 21 September 2017 2017 – San Salvador

[on the basis of the report by the Committee on Social Affairs, Youth and Children, HumanExchanges, Education and Culture]

Informal and undeclared work in the European Union and the countries of LatinAmerica and the Caribbean

The Euro-Latin American Parliamentary Assembly,

– having regard to the Universal Declaration of Human Rights, adopted by the UnitedNations (UN) General Assembly on 10 December 1948,

– having regard to the International Covenant on Economic, Social and Cultural Rights,adopted by the UN General Assembly on 16 December 1966,

– having regard to Resolution 70/1 of the UN General Assembly on 25 September 2015:‘Transforming our world: the 2030 Agenda for Sustainable Development’, and itsSustainable Development Goal 8 – ‘promote sustained, inclusive and sustainableeconomic growth, full and productive employment and decent work for all,’

– Having regard to the Brussels Declaration: ‘Shaping our common future: workingtogether for prosperous, cohesive and sustainable societies for our citizens’ and itsAction Plan, approved by the EU-CELAC Summit of Heads of State held on 10 and11 June 2015,

– having regard to the Resolution concerning decent work and the informal economy,adopted by the General Conference of the International Labour Organisation (ILO) in2002,1

– having regard to Recommendation No 204 concerning the Transition from theInformal to the Formal Economy, adopted by the ILO in Geneva on 12 June 2015,

– having regard to the ILO report ‘Recent experiences of formalisation in Latin Americaand the Caribbean,’ published on 4 June 2014,2

– having regard to the ILO report ‘Thematic Labour Overview: Transition to Formalityin Latin America and the Caribbean’, published in 2014,

– having regard to the ILO report ‘2015 Labour Overview, Latin America and the

1 http://www.ilo.org/public/english/standards/relm/ilc/ilc90/pdf/pr-25res.pdf2 http://www.ilo.org/wcmsp5/groups/public/---americas/---ro-lima/documents/publication/wcms_245882.pdf

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Caribbean,’ published on 10 December 2015,1

– having regard to the ‘End to Poverty Initiative: the ILO and the 2030 Agenda’, draftedat the 105th International Labour Conference (2016),

– having regard to the ‘Programme for the Promotion of Formalisation in Latin Americaand the Caribbean’ (FORLAC), launched by the ILO in 2013,2

– having regard to the resolution of the Latin American Parliament on conditions ofinformal work and social inclusion (Resolution AO/2011/03), adopted on 22September 2011 in Aruba,3

– having regard to the resolution of the European Parliament of 14 January 2014 onsocial protection for all, including self-employed workers (2013/2111(INI)),4

– having regard to the European Parliament legislative resolution P8_TA (2016)033 of 2February 2016 on the proposal for a decision of the European Parliament and of theCouncil on establishing a European Platform to enhance cooperation in the preventionand deterrence of undeclared work, adopted on 2 February 2016,5

– having regard to the report ‘Tackling undeclared work in 27 European Union MemberStates and Norway: Approaches and measures since 2008,’ published by Eurofound in2013,6

A. whereas, according to the ILO, the term informal economy encompasses ‘all economicactivities by workers and economic units that are – in law or in practice – not coveredor insufficiently covered by formal arrangements’;

B. whereas informal labour practices constitute a violation of human rights and have nowbecome one of the principal problems affecting the labour market, undermining boththe well-being of workers and their families and the state, businesses and society atlarge;

C. whereas the ILO’s ‘2015 Labour Overview of Latin America and the Caribbean’points out that there are 130 million informal workers in Latin America and theCaribbean, 47% of its labour force; which can be chiefly divided into three groups: theself-employed (82.3%), domestic workers (77.5%) and employees of microenterprises(58.6%);

D. whereas European Parliament resolution 2013/2111 stated that unfair work is

1http://www.ilo.org/wcmsp5/groups/public/---americas/---ro-lima/documents/publication/wcms_450098.pdf2 https://www.oitcinterfor.org/hechos-noticias/forlac-programa-oit-formalizaci%C3%B3n-informalidad3 http://www.parlatino.org/pdf/organos-principales/asamblea/declaraciones-resoluciones-actuales/pma-2-12-2011/resoluciones/resolucion3-condiciones-informal-social.pdf4 http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0014+0+DOC+XML+V0//ES5http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2016-0033+0+DOC+XML+V0//ES6 https://www.eurofound.europa.eu/sites/default/files/ef_files/pubdocs/2013/2431/en/2/EF132431EN.pdf

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damaging the Union’s economy, leading to unfair competition, endangering thefinancial sustainability of the Union’s social models and resulting in an increasing lackof social and employment protection for workers;

E. whereas young people, migrants and women are more strongly affected by informalemployment relationships, and whereas migrants and women are often disadvantagedin multiple ways, including as a result of lower pay;

F. whereas undeclared work makes up a significant part of the economy of the EU, aswell as that of Latin America and the Caribbean;

G. whereas informal work may be linked to illicit activities such as the trade in stolengoods, tax evasion, slave labour, sweat shops, people trafficking, smuggling andcounterfeiting, mainly affecting the most vulnerable groups such as migrants, youngpeople and women;

H. whereas approximately 60% of informal employment in Latin America and theCaribbean is concentrated in small and medium-sized enterprises (SMEs); whereasthat situation contributes to low productivity and those countries’ slow economicdevelopment;

I. whereas informal workers often find themselves forced to accept precarious or evendangerous working conditions, rock-bottom wages and severely reduced social andemployment security protection or no protection at all, thus depriving them ofeconomic stability, adequate social benefits, pension rights and access to healthcare, aswell as improvement of skills, lifelong learning opportunities and dignity;

J. whereas the ILO recognises that informal work practices are a problem thatparticularly affects migrant workers and their families, in both qualitative andquantitative terms;

K. whereas undeclared work has serious repercussions on national budgets, the financialsustainability of social security systems and employment, productivity andcompetition;

L. whereas the majority of older adults who remain employed work in the informaleconomy, or on an undeclared basis in the formal economy; whereas that proportion isconsiderably higher for women, who are usually less well covered, both legally and infact, by mandatory social protection contribution systems; whereas one of the reasonsfor this is that their contributions to the care-giving economy are not formallyrecognised;

M. whereas formalising employment has advantages such as restoring fundamental rightsand improving the economic capacity of companies, as well as the benefits for thestate in the form of worker contributions and fair competition;

N. whereas ILO Recommendation 204 is a key tool for governments which sets out 12guiding principles to promote the creation of sustainable jobs and enterprises in aformal environment and offers pointers for governments on guaranteeing the rights of

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workers and preventing labour informality of all kinds;

O. whereas in 2014 the ILO Programme for the Transition from the Informal to FormalEconomy (FORLAC) laid down a new regional strategy to support countries in theimplementation of measures to promote and formalise companies and jobs;

P. whereas point 8 of the 2030 Agenda for Sustainable Development, ‘decent work andeconomic growth,’ sets the priority of promoting inclusive and sustainable economicgrowth, employment and decent work, by taking effective measures to eradicateforced labour, slavery and people trafficking;

Q. whereas women, migrants and other vulnerable groups of workers experience moredifficulty than other groups in coming by other opportunities, and find themselvesobliged to accept work in the informal economy;

R. whereas the resolution concerning decent work and the informal economy adopted bythe General Conference of the ILO in 2002 called for attention to be paid to the needsof workers and economic units in the informal economy, and placed emphasis on anintegrated approach from the viewpoint of decent work;

1. Recognises the progress made in the countries of the EU and LAC in regulatingundeclared work and clamping down on informal labour, by means of both legislationand dedicated measures;

2. Underlines, however, that much remains to be done to tackle informal and undeclaredwork, one of the biggest challenges in policy management for the coming years interms of employment, social affairs, taxation and the productive economy;

3. Points out that the accepted definition of labour informality includes an aspect of jobinsecurity, namely that experienced by workers not covered by legislation, regardlessof whether they work in the formal or informal sector;

4. Stresses that the informal economy is a necessity for many people in developingcountries, but that it also constitutes a major obstacle to the rights of workers, to socialprotection, decent working conditions, sustainable development, public revenues, thesoundness of institutions and fair competition in national and international markets;

5. Calls on the various governments to develop and implement public policies andlegislation designed to combat the structural and governance factors that favour thedevelopment of informal work and of related illicit activities such as the trade in stolengoods, tax evasion, slave labour, sweat shops, people trafficking, smuggling,counterfeiting and corrupting public officials;

6. Urges the States to adopt an integrated, coherent and coordinated approach so as toeffect a successful transition to the formal economy and to develop strategies forinclusion in each State, both in the legislative arena and in the implementation ofpolicies, seeking to improve the conditions of those working in the informal economy;

7. Stresses that public education and training are crucial components in ensuring workers

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know their rights and which bodies are responsible for dealing with complaints and inmaximising the advantages of formalising employment, for workers, for the state,companies and the economy as a whole; suggests, in this regard, developingawareness-raising and registration campaigns, using social means;

8. Calls for targeted awareness-raising campaigns and education programmes to meet theparticular challenges and circumstances facing vulnerable groups such as migrants,young people and women; in order for education programmes to succeed, it is alsoimportant to consider the living situations of informal workers; educationopportunities for informal workers must also address the difference between town andcountryside;

9. Stresses the need to pay special attention to particularly vulnerable groups, including,but not limited to, migrant workers and their families, who are faced with the mostserious decent work deficits in the informal economy; also urges Member States toadopt labour migration policies that take account of the needs of the employmentmarket and the costs associated with training workers and policies that promote decentwork and the rights of migrant workers;

10. Calls on the countries to adopt rules permitting the formalisation and regularisation ofwork and to enact reforms to simplify regulations and procedures based on anintegrated approach and associated mechanisms, which must also be made part of theinternal legislation of each Member State, with reference both to the administrativeprocesses for registration in social-security and healthcare systems and pensionschemes;

11. Points out the particular challenges for formal labour which arise from the process ofdigitalisation and the new modes of work which go with it, such as click working,crowd sourcing or pool working, and that these and other challenges need to be takeninto consideration when making efforts towards formalisation;

12. Reminds Member States of the expected trends for ageing populations and thepossible impact that those demographic changes will have on the employment market;in that regard, emphasises the need when formulating public policies on employmentformalisation to consider older adults specifically;

13. Suggests including employment clauses in international instruments that areconcluded for trade or integration purposes; however, when applying such clausesasymmetries must be taken into account; inclusion of such clauses will permit andencourage the parties to achieve formal economies, and provision should be made forany of the parties to be suspended if they were found to be in breach of its provisions;

14. Proposes introducing economic, tax and financial incentives and hiring subsidies,investing in training and gradually reducing contributions made by employers andworkers, with preferential schemes for micro, small and medium-sized enterprises;

15. Stresses that measures promoting formal employment should not envisage any kind ofgreater flexibility that undermines workers’ rights, and should protect workers in allcases, particularly with regard to ongoing court cases, social-security contributions

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and for the purposes of determining workers’ seniority and length of service;

16. Proposes establishing, without prejudice to other sanctions, special laws to make theformal registration of employees a precondition for access to economic, fiscal, tax andcredit benefits, among others, stipulating that failure to comply would result in thesebenefits being automatically forfeited;

17. Calls on countries to strengthen the state apparatus and its capacity for enforcing theserules and, by empowering labour inspectorates and social security institutions; alsoinvites the parliaments to promote, within the scope of their duties and powers, labour-market formalisation by engaging in oversight and enacting the relevant legislation;

18. Urges the Member States to establish special measures to promote formal employmentamong particularly vulnerable groups, such as women, migrants and people withdisabilities;

19. Points to the role and responsibility of employment agencies in complying with theemployment legislation of each country, offering decent work that meets the standardsset out by the ILO, as well as their ethical commitment to the well-being ofemployees;

* * *

Instructs its co-presidents to forward this resolution to the Presidency of the EU-LACSummit, the Council of the European Union and the European Commission, and to theparliaments of the Member States of the European Union and all the countries of LatinAmerica and the Caribbean, the Latin American Parliament, the Central American Parliament,the Andean Parliament and the Mercosur Parliament, the Secretariat of the AndeanCommunity, the Committee of Permanent Representatives of Mercosur, the PermanentSecretariat of the Latin American Economic System and the secretaries-general of theOrganisation of American States and the Union of South American Nations.