TURK-IS Confederation of Turkish Trade Unions STRUGGLE AGAINST UNDOCUMENTED EMPLOYMENT Ankara
Objective Informal employment stands as an important problem on Turkey s agenda. According to the recent figures 45.7 percent of workers are not registered to any social security system. Informal employment rate is high especially among those who work as per diem workers, unpaid family worker, and self employed. The existence of widespread informal employment is one of the most important obstacles which undermine the principles of social state and the right to organize. Struggling against informal employment is the principle task and responsibility of trade unions specifically, all social parties and public institutions. Turk-Is spends great effort to solve this problem. A recommendation regarding the national action plan was prepared by the Presidential Council and submitted to the government and political parties that have a group in Turkish Grand National Assembly (TBMM). Due Diligence The rise and spread of undocumented employment is due to economic, financial and social policies implemented in the country. Instead of ruling the economic structure that depends on regulations and related implementation undocumented employment is getting wide-spread. Therefore, an unfair competition has been created that have a negative effect on the interests of legitimate enterprises. Undeclared and undocumented activities, violation of obligations create informality. tax and social security One of the reasons that create informality is economical. The majority of agricultural and service sector in the economy has a significant role and those sectors cannot be easily monitored and controlled. Prevalence of economic activities which are performed by small enterprises are also significant elements of informal employment. In certain circumstances where the unemployment is wide-spread, and the occasions to find a job are scarce, people starts to look for new employment opportunities in informal economy. On the other hand, employers tends to operate in informal sector in order to decrease labor cost and provide flexibility in production process. The reasons bounded to public finance also create informality. Essentially, Turkey is called as tax heaven for all taxpayers except wage-earners. Tax regulations and tax administration in the country promotes tax avoidance.
Cultural structure of society, its moralistic and ethical values, educational level, migration from rural to urban areas are the fundamental elements of undocumented employment. Due to ineffectiveness of juridical system in compensating the actual needs and the perception that the politics have, sacrifices in the implementation like illegal use of electricity and water services or mafia organizations in parking lots are tolerated. The reasons arising from technological innovation also provides informality. Advancing technology facilitates the production of some capital goods like various machinery tools, computers etc. and that stimulates people to take part in informal activities Most of the workers do not have a chance to make a choice for a job. Along with the recent economic and social crisis, and substantial negative conditions regarding unemployment, people obliged to work when they find a job even if the working conditions are not reasonable. Because the social security system does not perform well, people are forced to make an interest and cost comparison concerning to be registered to system or not. And this is a determinant motive on the preferences. When the social security system is ineffective and unproductive, people prefer to work under informal economy. On the other hand, when the inspections and penal sanctions are insufficient and the allowances regarding the employment are relatively high people again tends to work informally. Results of Informal Employment Negative results of informal economy initially can be observed in working life and these negative results emerge from undocumented employment. First of all, undocumented employment deteriorates the effectiveness of social security system. Undocumented employment stands for not respecting the regulations concerning qualifications that workers should have or minimum working age, minimum wage, overtime work, working conditions with health and safety. When the funds related to social security and taxes are not dully collected, working population is excluded from a comprehensive social security system. Also premiums cannot be collected sufficiently. Besides, social security institutions face with various problems such as financing and lack of services. Informally employed workers do not have right to organize. In other words, trade unions cannot operate in informal sector. Social security system does not cover informal sector. In addition, undocumented workers obliged to work under unhealthy working conditions such as precarious work and exploitation, without any bargaining power. Cost of undocumented employment to country s economy is massive. A calculation based on minimum wage displays the amount of lacking social security and tax deficit sourced from informal economy.
What Could Be Done? Some measures should be taken in order to prevent undocumented employment. Reductive measures those will decrease costs in employment taxes will be able to reduce employers tendencies towards informal employment. For this objective, cuts regarding income tax and social security premium rates should be decreased in various ways. And that will partially mitigate the informal employment. Increasing the sanctions against informal employment is important. Implementing the sanctions depends on the increase of inspection function of the government. Simplifying the existent regulation could decrease the tendency of the employers regarding to take part in informal sector. Government should collaborate with trade unions in struggling against informal employment. Trade unions will have an important contribution in determining undocumented employment and providing information for authorized units of the government. Prevention of undocumented employment is impossible without preventing informal sector (such as manufacturing, tourism etc.). Regulations that have been made on this issue did not respond to expectations. To inform public opinion and increase sensitivity about this issue will provide the efforts to be productive. The complexity of undocumented employment obliges the attempts regarding the solution to be elaborated through collective participation. Türk-Đş Approach The Status, resolutions of the Congress, Presidential Council and the Executive Board form the basis of the views and opinions expressed by Türk-Đş regarding the main problems encountered in the work-life. In this context, Türk-Đş highlights the fact that, struggle against undocumented employment should continue in a holistic manner while a national action plan covering undocumented employment and struggle against undocumented employment must be launched with the participation of the social partners. Establishment of a national committee with the participation of the government and all the social parties is important in the struggle against undocumented employment. Our call to establish a national committee received positive responses and some initiatives were launched (such as: KADĐM Project, TUSĐAD). Route Map The objectives which the committee to be established should focus in struggling against undocumented employment:
1- The objective: To reduce undocumented employment (include illegal migrant labour) to a reasonable level (5-10 percent) in three years. 2- This is a three year period which will be defined as struggling period. 3- This struggle should be based on: a) Honest political determination b) Cooperation with all social parties especially workers and employers trade unions, in other words, demanding their assistance, c) Aiming full employment and formulating policies in this regard. 4- The inspectors and the inspection units will identify and register the unregistered workplaces and enterprises during the struggling period. 5- All inspectors and inspection units will be controlled by a centre during the struggling period. 6- Voluntary inspectors will be in duty in addition to the authorized inspectors in struggling period. 7- The workplaces/enterprises which register with their free will, will be observed for three years during the struggling period. The previous activities will face any any penal sanction if the workplaces and enterprises do not attempt a misleading and unregistered action in this three year period. 8- Workplaces and enterprises which register with their free will, will benefit from some exemptions and privileges. 9- Social security premiums and taxes which are paid by the workplaces and the enterprises may be reduced (considering new premium income which will be collected from registered workers) depending on registration rate and increasing of registered employment. This reduction will be applied only to the workplaces/enterprises whose workers are organized and benefit from collective agreements. 10- Amendments in the Turkish Labour Act No. 2821 will provide some arrangements in the following issues; a) It will enable the unemployed to join a union without any time restriction, b) It will enable the pensioners to join trade unions or transform their foundations into trade unions and become affiliated to confederations, c) Union affiliation will be compulsory and the person who is not affiliated in a trade union will not be employed during the struggling period. 11- Trade unions will support those workplaces and the enterprises which register with their free will during the struggling period and assist them in achieving productivity and profitability. 12- The population except the students will be organized in an organization during the struggling period. 13- In line with the principals mentioned above, A National Action Plan to struggle with unregistered employment will be prepared rapidly by the National Committee to be established.