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Labour inspection

Labour inspection in Europe: fighting undeclared work and trafficking

Europe’s labour inspectors face daunting challenges. They not only try to ensure decent working conditions, but also contribute to the fight against trafficking and undeclared work. ILO Online has set up a series of questions and answers about a new ILO report intended to help experts in EU countries share good practices and develop common policy guidelines for labour inspection and undeclared work.

Article | 12 March 2010

How does the global economic and social crisis affect the work of labour inspection?

Labour inspectorates are often significantly understaffed for the wide range of tasks within their mandate and the economic crisis may be increasing their workload, yet labour inspectors are called upon to fulfil tasks requiring good planning and management of interventions, and both, financial and human resources. However, in some cases, the crisis has affected labour administration, and with it resources for labour inspection. Strengthening labour inspection systems is therefore, more than ever, an integral part of the crisis response as noted in the ILO Global Jobs Pact adopted by the International Labour Conference in June 2009.

How does the ILO define “undeclared work”?

While the ILO does not have an established international legal definition of “undeclared work”, it deals with the subject when referring to the “informal economy”, that is, an economic activity carried out by workers and economic units that is – in law or practice – not covered, or is insufficiently covered, by formal arrangements. In Europe, “undeclared work” usually comprises lawful unpaid activities which are not declared to public authorities.

What are the patterns of undeclared work in the European Union?

Undeclared work can be found in a wide range of workplaces – from small businesses to large companies, from the service sector to construction, from industry to agriculture. Workers with different profiles and backgrounds are involved. Because of this heterogeneity, it is very difficult to measure and monitor undeclared work. In 2007, the European Union undertook a study 2/ to measure undeclared work across the entire community. The report (Note 1) found that undeclared workers are mostly male (62 per cent) and young, as two-thirds of them were under the age of 40. The study further revealed that the proportion of non-nationals to nationals in undeclared jobs was about the same. The two most over-represented categories were the unemployed and self-employed. The two most under-represented groups were house persons and pensioners.

Which is the most effective way to fight the phenomenon of undeclared work?

There is no one-size-fits-all solution. However, the general objective will and should always be to discourage undeclared work. This requires strategies which combine several elements: a well coordinated approach among administrative authorities at a national and international level and a combination of awareness raising, prevention and sanctions as well as the involvement of social partners and judiciary authorities.

What kind of sanctions could be effective?

Sanctions are a last resort. They should be properly designed, applied in a proportionate manner and be dissuasive. In some cases, fines are not significant enough and the employer is willing to risk employing undeclared workers as long as the expected cost of being penalized is lower than the difference between the labour costs for undeclared and declared workers. On the other hand, if sanctions are too tough, they may lead to the employer’s insolvency. In a nutshell, sanctions need to be well balanced.

Undeclared work is closely linked to migration. What are the particular challenges for labour inspectors in this respect?

The situation becomes much more complex when undocumented migrants are involved because labour inspectors cannot redress the situation of workers without work permits. This situation represents an ethical dilemma for labour inspectors. On the one hand, they are supposed to protect workers. However, on the other hand, they need to inform the police or migration authorities. Inspectors need to focus on checking working conditions and should not be expected to act as a form of immigration control. In this regard, they need to be familiar with the problems to which migrants are subject, such as discrimination, language barriers and difficulties within the cultural context. In addition, labour inspectors need to be trained for those sectors where clandestine work predominates.

What are the key elements in preparing labour inspectors for their future tasks?

In summary, labour inspectors should be well trained and qualified, with appropriate and sufficient resources at their disposal. For example, they need systems of data collection and must be able to share knowledge and information both within countries and across border zones. To facilitate this, a comprehensive strategy should be proposed and implemented at the EU level to improve coordination between national labour inspectorates, with particular emphasis on undeclared work and trafficking. Key elements can also be found in ILO Convention No. 81 and in international labour standards related to labour inspection.

Note 1 - Labour inspection in Europe: undeclared work, migration, trafficking, January 2010, International Labour Organization, Geneva, 2010. ISBN 978-92-2-123248 (print), 978-92-2-123249-0 (web pdf); /labadmin/lang--en/index.htm.