IV. ILO Recommendation 204 and its relevance for South Africa

In June 2015, the ILO Recommendation 204 on the Transition from the Informal to the Formal Economy was adopted by the International Labour Conference of the ILO. This was significant in several ways. Prior to this, informal workers were identified as “employers” and could not access the ILO processes. The key objective of the Recommendation is to address the issue of transition from informal to formal economy and expand the full scope of informal workers (Pat Horn interview, June 2018). Central to the Recommendation is the acknowledgement that workers enter the informal economy due to a lack of opportunities in the formal economy, and or an absence of any other means of livelihood and thus having little or no choice.

This process was immensely important for South Africa since the government, South African trade unions and organisations such as Wiego and Streetnet were supportive and became active participants in this process. Recommendation 204 is not at odds with the South African national policy and legislative landscape, which is increasingly being redefined and reshaped to adapt to the reconfiguration of the labour market. The point of departure in South Africa is that the nature of work and the formal economy itself is becoming highly informal and transitions from the informal to formal is necessarily the answer. Several demands made by WIEGO and others were captured in the framing of Recommendation 204:

  • • Avoiding destruction of livelihoods in the process of formalisation, which was captured in the preamble as “ensuring the preservation and improvement of existing livelihoods during the transition.”
  • • Informal initiatives were seen as attempts by economic units to earn an income as opposed to being seen as “enterprises.”
  • • Informal economy workers are now workers as per Recommendation 204, and recognised and captured in STATS data as own-account workers rather than as employers.
  • • The regulated use of public space is now recognised for generation of livelihoods in the informal economy, which is an essential victory for street vendors.
  • • The need for regulated access to natural resources used in informal economy livelihoods is recognised.
  • • Instead of the previous ILO language of “social enterprises,” the Recommendation talks of cooperatives and the social and solidarity economy, a significant advance.
  • • Collective bargaining and direct representation were recognised as necessary and integral parts of transitioning from informal to formal.

However, one lacuna is with respect to local government: Recommendation 204 fails to underline the specific role and responsibilities of local government in providing an enabling environment for decent work in relation to many categories of workers in the informal economy. This can inadvertently become a major deterrent to achieve formalisation in the formal economy, thereby making the transition less likely.

Despite this limitation, there are many ways in which it could provide the framework for facilitating the formalisation of informal economy workers in South Africa, even without achieving a full transition. It allows for flexibility in interpretation and application across various informal activities. For example, even though sex work in the case of South Africa is not legalised, the Recommendation technically could include them. Sections of the Recommendation that acknowledge the right to work, rights at work, in law and practice, and covers vulnerable categories including women, young people, migrants, older people, indigenous and tribal peoples, persons living with HIV or affected by HIV or AIDS, persons with disabilities, domestic workers and subsistence farmers all could be utilised in favour of informal workers. The aim is to ensure appropriate coverage and protection of all categories of workers and economic units. The Recommendation also cautioned against measures which penalise the workers for their lack of formality and points to the need for labour inspection to extend coverage to informal economy workers “to all workplaces in the informal economy in order to protect workers.” In terms of social protection, the Recommendation is very sensitive to the specific needs of women workers in the informal economy, extending social insurance coverage and making it more accessible, extending maternity protection and access to affordable quality childcare. Since Recommendation 204 has been recognised in South Africa and is discussed at NEDLAC, it can be a useful tool in initiating favourable formalisation processes. Nevertheless, it will be workers in the informal economy and their organisations that will lead the way for implementation.

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