Co-funded by the European Union

International Labour Office factsheet on "the role of social dialogue and the social partners in addressing the consequences of Covid-19 in the informal economy"

  • This short paper provides interesting examples on how social partners have been able to include the informal sector during the Covid-19 pandemic and beyond.

Based on potential of social dialogue to ensure that “policies address informality efficiently, particularly with regard to enabling informal economic units and informal workers to transition to formality”, this paper provides a summary of the answers to three key questions:

  • What do International Labour Standards say about representation and participation of workers and economic units in the informal economy in social dialogue?
  • What kind of support can workers’ and employers’ organizations provide to those in the informal economy during the Covid-19 crisis and in the recovery phase?
  • How are the interests and concerns of workers and economic units in the informal economy being represented and addressed in mechanisms of tripartite social dialogue in the Covid-19 context?

The first part of the factsheet sets the international legal framework, including the Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204), which underlines the right of those in the informal economy to establish and to join organizations, federations and confederations of their own choosing. Recommendation No. 204 further states that an “integrated policy framework on the transition to formality should address the organization and representation of employers and workers to promote social dialogue”.

With regard to the efforts made by workers’ and employers’ organisations to reach out to informal workers or entrepreneurs during Covid-19 and beyond, this process proved to be particularly difficult. Due to their nature, informal workers and economic units were mostly left outside the coverage of Covid-19 support measures.

The paper provides a good example of the “small and medium-sized enterprises (SMEs) hospital” (“Hospital PYME”) established in Guadalajara (Mexico) by the Council of Industrial Chambers of the State of Jalisco (Consejo de Cámaras Industriales de Jalisco-CCIJ) and the University of Guadalajara (Centro Universitario de Ciencias Económico-Administrativas (CUCEA)), with support from the ILO.

Through this programme, SMEs in difficulty could apply for technical support and coaching “in the areas of finance, marketing, human capital management, strategic planning, business reengineering, legal, fiscal and social security matters” without having to submit a tax number or specific official documentation.

On the third question, the factsheet provides the example of Tunisia, where “the social partners negotiated an agreement with the Ministry of Labour to support companies, secure incomes and protect employment across the private sector. Following this agreement, the salaries of about 1.5 million workers were paid during Covid-19-related closures in April 2020. The government paid an exceptional grant of DT200 (about USD70) per worker while employers paid the remaining salary. In order to benefit from this assistance, companies had to be affiliated to the National Social Security Fund and they were given up to 30 days to declare their employees, without incurring penalties.