The ILO and the concept of Decent Work

1.1 Introduction

The concept of decent work was first proposed by the Director-General of the International Labour Office (ILO) as a unifying framework and a central priority for the organization in his Report to the 87th Session of the International Labour Conference in June 1999. [1] Since then, while some work has been done on the concept, strategies and policies for decent work, relatively less attention has been given to the question of indicators, as well as the legal significance to be given to each index of measuring the parameters of decent work. Information on indicators is needed to assess country performance on decent work and to evaluate progress over time. It is also needed to make inter-country comparisons regarding performance on decent work and its individual components. The discussion of indicators is thus intimately linked to the objectives and the meaning of decent work in different institutional and structural contexts. [2] 

The aim of this paper is to discuss the concept and components of decent work. It also considers their relevance to countries with different institutional frameworks and at different stages of development. This is done through a discussion of three models of decent work – classical, transition and development – applicable respectively to market industrial economies, transition countries and developing nations. The importance of this system is laid down in terms of the fact that India is yet to adopt a framework corresponding to decent work. This, as evidenced by several new legislations guaranteeing employment to the rural and urban poor, must be seen as the trend towards which labour law in India is shifting. Thus this paper aims also to serve as a background from which to launch future policy decisions within the Indian context.

1.2 Research Methodology

      The research methodology adopted is doctrinal, keeping in mind the need of the topic. This project seeks to undertake a comprehensive analysis of the concept of decent work as propounded by the International Labour Organisation. The study on the topic, therefore, has been based on the secondary sources like books and some websites on the internet relevant to the topic and the views and opinions of scholars have also been considered. The secondary printed sources as well as the internet facilities provided for at the NALSAR University of Law have been of great assistance for the research topic.

1.3 Research Scheme

      The nature of this project is in the form of an analysis of the decent work framework given by the ILO and existing policy structures in different countries. The researcher has primarily adopted the analytical method of writing. The tool of comparison and description has been adopted where necessary. After providing an insight into the nature of decent work, the recommendations of the ILO are isolation along with contemporary parallel movements around the world.

Chapter Two: Decent Work

2.1 The Concept of Decent Work

The concept of “decent work” is a relatively new one, and must be distinguished from allied terms such as “right to work”, “wage guarantees”, “employment conditions” etc. For the purpose of this project the term “decent work” picks up from its first well-documented usage: In his 1999 Report to the International Labour Conference, the ILO Director-General stated: “The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity.” [3] (emphasis supplied).

The notion of decent work, therefore as elaborated in the report, emphasizes four elements: employment, social security, workers’ rights and social dialogue. Let us briefly analyse the meaning of these elements. Employment refers to, generically, work of all kinds and has both quantitative and qualitative dimensions. As understood by me the notion of decent work is applicable not just to workers in the formal economy but also to “unregulated wage workers, the self-employed, and home workers”. [4] Further, it refers to both adequate opportunities and remuneration for work (in cash or kind). Decent work also embraces safety at work and healthy working conditions. [5] The second element, viz. social security component of decent work is intended to protect against the risk of losing income. As stated in the Director-General’s 1999 Report: ‘Everybody – regardless of where they live – needs a minimum level of social security and income security, defined according to the society’s capacity and level of development’. [6] As is evident in the term, social security would mean the guarantee to the worker of a minimum level of security, secured by the state, independent of his own income or occupation.

While the first two components of decent work refer to opportunities, remuneration, security and conditions of work, the last two emphasize the “social relations of workers”. The notion of decent work incorporates fundamental rights of workers – “All those who work have rights at work” [7] . The basic rights relate to freedom of association, non-discrimination in work, and the absence of forced labour and child labour in abusive conditions. Social dialogue refers to the right of workers to engage in discussions with employers and authorities over matters bearing on work. [8] This requires participation and freedom of association and is therefore an end in itself. It is also a means of ensuring conflict resolution, social equity and effective policy implementation. It is the means by which rights are defended, employment promoted and work secured. It is a source of stability at all levels, from the enterprise to society at large.

2.2 Difference from earlier regimes

The above description of the concept of decent work immediately raises a number of questions. How does this definition of decent work differ from earlier discussions on the subject? Are all the elements of decent work of a similar nature and status? Is the concept of decent work of universal validity and applicable to countries in all situations? It is useful to address these questions briefly.

Since its inception, the ILO has been concerned with the four components that define decent work. [9] These themes have been treated in various reports and discussions over the past 80 years. They have been the subject of numerous Conventions and Recommendations that have served as guidelines for governments, the social partners and international agencies. [10] Despite this “ancient” tradition, the notion of decent work represents an advance over earlier discussions on this topic.

Substantively, decent work constitutes an effort to view the different dimensions of work within a single framework. In the past, both within and to a large extent outside ILO, the themes of employment, remuneration, working conditions, social security, workers’ rights, participation and collective bargaining, tended to be treated separately and in isolation. [11] Few attempts were made to see how the different dimensions of work related to each other. The notion of decent work not only forces us to view work along all its different dimensions but also invites us to explore the relationships between these dimensions. Hopefully this should help bring out the complementarities and conflicts among the components of decent work more clearly than in the past. Organizationally, the decent work framework should help to promote greater consistency and coherence in ILO’s substantive work. [12] 

2.3 Prioritising within the Decent Work Framework

A consideration of decent work also raises the question of the nature and priority of its different components. [13] In simple terms: when adopting “decent work” frameworks into municipal legislations, what choices should countries faces with inadequate resources to tackle all elements simultaneously make? For some purposes, it is convenient to group the different components of decent work into two categories: employment and social security in one, and workers’ rights and social dialogue in the other. Work opportunities, remuneration levels, working conditions and social security are determined primarily by the level of economic development. On the other hand, workers’ rights and social dialogue are more a matter of legislation and administration. [14] It will be going too far to argue that while the items in the first category require real resources, those in the second can be handled merely by passing laws. Workers’ rights cannot be enforced without resources, and social dialogue mechanisms depend upon institutional arrangements in organizing work. Nevertheless, it remains true that the first category components of decent work ultimately depend more upon “material forces” while the second category are more influenced by ethics, values and legislation. The question of prioritizing the different elements of decent work raises difficult and complex issues.

First, there are complications arising from the relationships among its various components. As argued above, one of the virtues of the decent work approach is that it exposes these more clearly than before. [15] While few dispute the existence of such relationships, their nature, direction and extent are less explored and they generate much debate and controversy. The existence and uncertainty of the relationships between the different components of decent work complicate any attempt to prioritize them. Indeed, it may be argued that they render such attempts invalid.

Even if such objections are dismissed, the question of priorities must depend upon societal values, socio-economic institutions and levels of prosperity and wealth. To take the last point first, it is often argued that in the early stages of development, the creation of work opportunities should take precedence over the provision of social security, the implicit assumption being that the two are in conflict. [16] A similar argument is sometimes used regarding certain labour rights, especially the right to form unions and engage in collective bargaining.

Institutions have a clear bearing on work opportunities, income distribution and social security. For instance, an agrarian regime characterized by a relatively equal distribution of land generally provides greater livelihood security and more even income distribution than one featuring a few large landowners and widespread landlessness and tenancy. Similarly, the presence of communal and cooperative institutions in some societies can provide an important cushion against insecurity and risks before the development of insurance schemes and social security financed by the state and employers.

The dominant societal values, which usually reflect the distribution of power among different socio-economic groups, influence the priorities among various components of decent work. This influence is exerted through national institutions and policies. The different priorities attached to values such as equality, solidarity, democratic participation, individual opportunities, incentives, community and family cohesion, will in turn influence the priorities accorded by public policy to work opportunities, remuneration, social security, freedom of association and social dialogue. The issues of relevance and priorities among decent work components are therefore best illustrated through a consideration of institutional and structural diversity among countries.

Chapter Three: Three models of decent work

In addition to the concept of prioritising within decent work elements, comes also the question of how each country’s economic and political system would react to the implementation of such a model. Many aspects of economic structure have implications for the attainment of decent work objectives. The most important of them relate to income per head, sectoral distribution and employment status of the labour force, government revenue and expenditure as a proportion of GDP, and the share of the public sector in productive assets and total output. Associated with some of these structural differences are differences in labour institutions that characterize the different models of decent work. [17] The different structural and institutional features are generally interrelated but there are many exceptions.

Income per head affects decent work through its impact on remuneration and on the ability of the government to raise revenue to address social security needs. High per capita incomes facilitate remunerative employment opportunities and the provision of social security to meet contingencies. Low per capita incomes are often associated with a high incidence of absolute poverty. The distribution of the labour force by status – employees, self-employed, family members – is a major determinant of the nature of problems faced by workers in the domains of employment, social security, and rights at work or social dialogue. The share of public taxation and expenditure in total output has an important influence on the scope of government policy relating to social security, poverty reduction and overall employment. [18] The share of the public sector in total production affects several dimensions of employment, social security and labour institutions. [19] The relevance of these features for decent work becomes clear when we consider the characteristics of the three models of decent work.

3.1 The classical model

Countries in this category are characterized by high per capita income, high share of the labour force in wage employment and high proportion of GDP allocated to government and social security expenditure. In the mid-1990s, GDP per capita (in purchasing power parity) in these countries ranged between US$12,000 and US$30,000. The share of wage employees was in the region of 70 to 90 per cent. Government expenditure as a proportion of GDP varied from 25 to about 50 per cent and public social security expenditure from around 15 to over 33 per cent. [20] 

With a few exceptions (mostly countries with relatively low per capita income), agriculture accounts for less than 5 per cent of the labour force, while the service sector employs between 60 and 80 per cent of the labour force. Extreme destitution in the form of hunger, malnutrition, lack of access to clean drinking water and shelter, is negligible, although relative poverty defined as the percentage of people with incomes below 50 per cent of median income is more substantial, varying from around 5-7 per cent in Scandinavian countries to 22 per cent or more in the United Kingdom and the United States. [21] 

Trade unions constitute the most important and representative form of workers’ organization. Although the proportion of workers enrolled as trade union members has declined in most countries over the past two to three decades, it continues to be significant, varying mostly between 25 and 50 per cent (excluding countries at the two extremes). [22] Collective bargaining at enterprise, industry or national level is the most important means of determining remuneration and other terms of employment in most countries. Again leaving out the extremes, collective bargaining coverage varies between 25 and 90 per cent of wage employees.

3.2 The transition model

The transition countries from the former Soviet bloc are moving from centrally planned to market economies. They still bear the marks of their earlier existence. The key feature of communist economies was state ownership of most productive assets and property. Practically the entire working population was employed in government, in state enterprises or on collective farms. Full employment and compulsory work for all male adults and most women were an integral part of their social and economic policy. The state provided comprehensive social security to all its citizens. All workers were members of trade unions, which were, however, controlled by the state and the communist party.

The transition countries that emerged from the collapse of communism display considerable diversity in their level of development, economic performance and social policy. In particular, clear differences have emerged between the Central European states on the one hand, which have performed relatively well, and the East and South East European states on the other. The situation is even worse in the Caucasian and Asian states.

Similarly, government expenditure and tax revenue constitute a relatively high proportion of GDP – between 25 and 50 per cent. The social security system has undergone quite radical changes in line with the overall economy. It has become less comprehensive and generous, more targeted and means-tested and more privatized. [23] Nevertheless, public social security expenditure continues to account for a high proportion of GDP for middle income countries – between 10 and 25 per cent of GDP. Trade union membership has fallen but the unions have become independent of the state and political parties. [24] These features, a reflection of the communist past, place these countries much closer to market industrial countries than to middle-income developing countries.

3.3 The development model

The developing countries display far greater diversity in their economic structures than the countries in the two groups discussed above. The economic differences among developing countries are recognized in the various classifications employed by international agencies, such as middle income (upper and lower), low income and least developed countries. Despite these differences, the great majority of these countries share the characteristics of widespread absolute poverty, extensive under- or unemployment, limited industrialization and dualistic economic structures.

An analysis of data on some structural features of 14 developing countries, selected to illustrate the diversity among them, brings to light several remarkable facts. [25] Per capita GDP varies from around $1500 (ppp) or less for low-income countries such as Ethiopia, Kenya and India, all the way to around $10,000 or more for countries such as Malaysia, Chile and South Korea, bringing them close to the levels found in Portugal and Greece and well above those in most transition countries. In low-income countries, between 60 to 80 per cent of the labour force is employed in agriculture. Even in most middle income countries, it varies between 20 and 40 per cent – substantially higher than in most transition countries.

There is similar diversity with regard to the share of the labour force in wage employment, which varies from less than 15 per cent in many low-income countries to between 60 and 70 per cent in middle-income countries. Once again the ratios for the latter group are not much below those found in market industrial and transition countries. However, the category of wage employees covers both the formal and informal economies. Typically, informal sector employment tends to be far more important in developing countries than in the other two categories. There does not appear to be a correlation with income per capita. In Sub-Saharan countries, the share of urban informal employment is especially high, exceeding 70 per cent in Ghana and Mali. It is close to half in some Latin American countries such as Honduras and Colombia.

Government expenditure as a share of GDP seems less related to GDP per capita in developing countries. A number of factors such as revenues from mineral exports, the share of the public sector in production and foreign aid affect the levels of government expenditure. These factors explain the extremely high ratios in countries like Botswana, Egypt and Brazil – around 40 per cent of GDP. They also account for the relatively high ratios in some low-income countries such as Kenya and Sri Lanka – ratios often higher than those found in much richer countries such as Chile, Malaysia or Mauritius.

The ratio of public social security expenditure is much lower in developing countries than in industrial or transition countries. This is even the case for countries with relatively high per capita incomes such as the Republic of Korea, Malaysia or Mauritius. Except for the high-income Latin American countries, these ratios for most developing countries tend to be under 6 per cent. Chile, Costa Rica, Brazil, Argentina and Uruguay allocate 10 to 13 per cent of their GDP to social security expenditure – a relatively high proportion in comparison with other middle-income countries in Asia.

Extensive absolute poverty and low human development indicators are a distinguishing feature of most developing countries. The working poor, defined as families with earnings of less than one dollar per person per day, form between 20 and 50 per cent of the employed population in most countries. For most middle income countries, the proportion is less than 10 per cent. Indicators such as malnutrition, infant mortality, access to clean drinking water and adult literacy also bring out the existence of widespread poverty in most developing countries. [26] 

Trade union density – the proportion of the working population enrolled in trade unions – tends, as expected, to be relatively low in most developing countries, seldom exceeding 10 to 15 per cent. [27] Only a few countries such as Argentina, Costa Rica and South Africa have union density rates around 40-50 per cent, comparable to the average rates found in industrial and transition countries.

Chapter Five: Conclusion

5.1 Is decent work a universal concept?

The preceding sections have highlighted substantial structural and institutional diversity among different groups of countries, and indeed within these groupings. It is often argued that the concept of decent work is applicable only to countries with characteristics similar to those in market industrial countries. [28] Those who take this position argue that since its establishment in 1919, the ILO has advocated norms and standards that reflect the conditions in industrial countries. At least until the late 1950s, ILO’s work – studies, reports, standards, technical cooperation, conferences and workshops – related to experience in these countries. For instance, its work on employment focused on creating jobs for employees and improving their remuneration and conditions of work. Social security likewise dealt with problems that arise for employees from unemployment, work accidents, and interruption or cessation of work due to sickness, maternity, old age or disability. The approaches to workers’ rights and social dialogue were also generally based on the employer-employee model, whether they relate to discrimination, freedom of association, child labour, collective bargaining or participation in decision making at the enterprise or industry level.

Do the structural and institutional differences in developing and transition countries render the concept of decent work inapplicable to them? If the key feature underlying the decent work paradigm is the employee-employer relationship in the formal economy, this should make the paradigm of only marginal relevance for the great majority of developing countries. Likewise, if the voluntary and independent status of workers’ and employers’ organizations is cardinal to the decent work model, its applicability to some countries with predominantly state economies may be called into question. But these aspects relate to mechanisms and instruments for the attainment of decent work objectives. When it comes to the objectives themselves, it can plausibly be argued that decent work is indeed a universal aspiration. [29] 

All workers, whether in state enterprises, the formal or informal economy or self-employment, desire levels of remuneration in cash or kind that provide at least a minimum standard of living for their families. They also wish to work in safe and healthy conditions and to have a secure livelihood.

Like other citizens, workers in all categories also seek the right to form their own organizations to defend and promote their interests and to participate in decisions that affect them as workers. These goals and rights are not just desired by the workers themselves; their fulfilment has been recognized as a societal and governmental responsibility. These rights have been incorporated in such international documents as the Universal Declaration of Human Rights and the Covenants on Civil and Political and Economic, Social and Cultural Rights. There are also many UN and ILO Conventions that bind participating countries to respect the fundamental rights of people and workers and to promote their social and economic well-being. While the objectives behind decent work thus retain their universal validity, their content and the mechanisms for attainment must be adapted to countries’ structural and institutional characteristics.

5.2 “Decent work” and India: Implications

As stated before, Indian legislation regarding the right to work largely covers the procedure of guaranteeing such a right, and the means by which this right is to be guaranteed instead of what components exactly this right should be composed. In this section I analyse the Indian experience through two such legislations, often called sister-laws: the Maharashtra Employment Guarantee Scheme, and the National Rural Employment Guarantee Act.

5.2.1 Maharashtra Employment Guarantee Scheme (MEGS)

The Maharashtra Employment Guarantee Scheme (hereafter MEGS) is an example of relative success as well as upscaling from a small pilot project in a few villages to a state-wide scheme that officially covers the whole of rural Maharashtra. It has been implemented at state government level for more than three decades and has influenced the demand for a national employment guarantee act in India. The current discussion around the National Rural Employment Guarantee Act and its implementation has been inspired by the positive features of the Maharashtra scheme, while some concerns about its functioning have led to modifications in the national law.

The scheme guarantees that every adult who wants a job in rural areas will be given one, provided that the person is willing to do unskilled manual work on a piece-rate basis. However, the work is provided only if there are 50 labourers available, to ensure that the works are of a minimum size. Self-selection of the poor is built into the MEGS, in several ways. No choice of work is offered: the labourer must be willing to do whatever is asked. The wage rates offered under the MEGS have been low, and generally below the agricultural wage rate. After a Supreme Court ruling that ensured that workers under the scheme must be paid the minimum wage, the legal minimum wage in the state has been kept low and is now one of the lowest in India, even though consumer price levels are higher than the national average. Further, while officially the work must be provided within a 5-km radius, actually the guarantee operates at the district level and using the system of administrative “pockets”, which means that a person may be required to travel a long distance for a few days of temporary work.

Among the criticisms of the MEGS, the most prominent have related to the lack of local participation, over-dependence upon the bureaucracy, rigidity of the schemes and corruption in their implementation. Some of the following problems have emerged as the most significant, and these have also affected the framing of the National Act: (1) Lack of transparency in employment and cash disbursement; (2) Fudging of muster rolls of employment; (3) Delayed payments; (4) Cheating of illiterate villagers, with payments being denied under spurious grounds; (5) Employment of children; (6) Inadequate provision of work, such that in some cases the number of people needing employment under the programme is thrice the number of people who actually get work; (7) Excessive emphasis on road construction rather than other forms of work, and inadequate attempts to provide other forms of work especially those more easily performed by women; (8) Lack of flexibility regarding work time.

5.2.2 The National Rural Employment Guarantee Act

The National Rural Employment Guarantee Act, which has only recently been legislated by the Parliament of India, is the outcome of a complex process of negotiation and political lobbying, which has also been affected by perceptions of both the successes and failures of the Maharashtra experience. The Act proposed by the UPA government is more limited, in that it offers only 100 days of employment per rural household, rather than an unlimited number of days per individual adult as