The impacts of COVID-19 on employment and decent work

The COVID-19 pandemic is the worst global crisis since the Second World War. It has profoundly affected individuals and societies, bringing devastation to healthcare systems and economies at every scale. Shortly before the outbreak of the pandemic, the ILO Committee of Experts (CEACR) published its General Survey on Promoting Employment in a Changing Landscape, It examines the application in ILO Member States of 8 international labour standards on employment and decent work in light of rapid changes in the world of work.

In November 2020, the CEACR adopted an Addendum that complements the 2020 General Survey. It takes into account the impacts of the pandemic on the application of the instruments examined in the Survey and the many and varied measures taken to address the crisis in different countries. These standards are directly relevant to the development and implementation of effective policy responses to the crisis.

The COVID-19 pandemic has given rise to a global labour market crisis

The employment impacts of COVID-19 are proving to be both profound and far-reaching. Employers and workers in both the formal and informal economies and across all economic sectors have experienced the impact of lockdowns, to an even greater extent than initially predicted. The result has been the often permanent closure of thousands of enterprises, along with massive layoffs.

The employment relationship

The pandemic has accelerated changes in the employment relationship in many countries. Common measures taken to cope with the pandemic include:

  • Telework, for those able to work remotely
  • Reductions in working hours
  • Compulsory shift work and job-sharing
  • Wage reductions
  • Suspensions and collective terminations
  • Increased recourse to social protection systems

Transition to formality

The ILO estimates that global lockdown measures to stop the spread of the pandemic have had a significant impact on at least 1.6 billion informal workers. These workers now face a new dilemma: “to die from hunger or from the virus”. Informal enterprises, which represent eight out of ten enterprises around the world, are facing a similar dilemma. As they are usually unregistered, informal workers and enterprises are often not covered by most government support programmes.

Disadvantaged persons are often concentrated in the informal economy, including:

  • Women
  • Young people or older workers
  • Workers with disabilities
  • Indigenous and tribal peoples
  • Migrant workers

Addressing informality requires tailored measures that can be sustained over time.

Homework

Home work is the main source of income for a large number of people throughout the world. However, homeworkers occupy a particularly vulnerable place in the labour market. This is often due to unstable demand, unclear employment situations, and weak bargaining power, which often renders these workers invisible.

Workers with disabilities

The socio-economic consequences of the pandemic magnify obstacles and inequalities already encountered by persons with disabilities, who are in many ways more exposed to the crisis than those without disabilities. Workers with disabilities may experience greater challenges around access to social protection, exclusion from employment, and greater costs to secure essential goods and services. These inequalities are even greater for women and girls with disabilities.

Equality

“Now is the time to look more closely at this new normal, and begin the work to make it a better normal, not so much for those who already have much, but for those who so obviously have too little.”

We will have before us the task of building a future of work which tackles the injustices that the pandemic has highlighted, together with the permanent and no longer postponable challenges of climate, digital and demographic transition.”

Remarks of ILO Director-General, Guy Ryder, 1 May 2020

Conclusion: The way forward

The ILO tripartite constituents have a crucial role to play in the development and implementation of active employment policies and programmes that take the human-centred approach adopted by the 2019 Centenary Declaration and are aligned with the goals established in the 2030 Agenda for Sustainable Development. We have the opportunity to shape a better future for all after the pandemic, through employment policies and programmes that promote job-rich growth and decent work, fully integrating the principles of equality, inclusion, inherent dignity and full participation. No one must be left behind on the path to the future of work.

General Survey

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Addendum

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Policy responses to the crisis

Immediate as well as longer-term policy responses must be developed and implemented to stimulate the economy, creating a job-rich recovery for all, including for those most vulnerable to the effects of the crisis.   General Survey, Paragraphs 84, 94 and 114.

Convention No. 122 provides valuable guidance for the development, adoption, monitoring and implementation of inclusive national employment policies that can stimulate economic growth and development, promoting full, productive and freely chosen employment and decent work. To ensure greater ownership and effectiveness, policy responses should be developed through participatory social dialogue with the social partners and consultations with representatives of those groups who will be affected by the measures to be taken.

Micro, small and medium-sized enterprises (MSMEs) have been particularly devastated

As highlighted in the General Survey:

  • MSMEs offer the potential for traditionally disadvantaged groups to gain access to productive, quality and sustainable employment opportunities.
  • Sustainable enterprises are instrumental in improving standards of living and social conditions over time. They are a principal source of growth, innovation and wealth creation.
  • In the context of an ever-growing and increasingly integrated labour market, governments should adopt coordinated measures to promote decent work within supply chains at both national and global level.

General Survey, Concluding remarks, paragraph 1067 (f).

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The importance of a clear employment relationship

The employment relationship is a mechanism that offers clarity to the labour market, as the rights and responsibilities of workers, employers and third-party contractors arise where the employment relationship is found to exist. As the labour market continues to evolve, the organization of work and new forms of working arrangements emerge. This can lead to a blurring of roles, often with the effect of shifting risks and responsibilities away from the employer onto the worker. It is therefore crucial to effectively remove incentives that promote disguising the employment relationship. Changes in the form of working relationships must not restrict the scope of application of the labour law, or prevent workers from enjoying labour protections to which they are entitled.

General Survey, Paragraph 343.

The COVID-19 pandemic has accelerated changes in the employment relationship

Gig workers have been among the hardest hit economically by the coronavirus pandemic. Many have been compelled to quit their gig jobs due to decreased demand for their services during the crisis, as well as for their own safety. For example, gig economy workers such as delivery drivers are at particular risk of exposure to COVID-19. While the gig economy offers increased flexibility to both employers and workers, as a rule, gig economy workers have little or no access to unemployment benefits, health insurance or sick leave benefits available to other workers.

Changes in the organization and structure of work, as well as the evolving nature of the employment relationship, have had broad-ranging impacts on societies and individuals, particularly on disadvantaged groups who encounter difficulties in accessing, remaining and advancing in employment and decent work. Each State is responsible for identifying the appropriate methods for adapting to developments in the national labour market, for identifying situations in which workers are no longer protected and for designing the most appropriate means of dealing with these situations. In-depth tripartite consultations on these ongoing changes and their impacts would be of great value to identify appropriate corrective measures.

General Survey, paragraph 1067 (a).

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Strategies for the transition to formality

An inclusive, integrated and comprehensive strategy, across a range of policy areas, is required to ensure that national employment policies facilitate the transition from the informal to the formal economy. Strategies should take into account national contexts and should be developed in consultation with the social partners, including representatives of workers and economic units operating in the informal economy. General Survey, paragraph 400.

Immediate responses to the pandemic cannot separate health from economic impacts. As such, they must follow a multi-track strategy:

  • Reducing exposure to the virus and risks of contagion
  • Ensuring access to health care
  • Providing income and food support to compensate for the loss of economic activity;
  • Reducing and preventing damage to the economic fabric
  • Preserving employment

Countries have adopted a panoply of different measures aimed at progressively extending rights to informal workers and economic units. These include: access to social security and maternity protection; occupational safety and health; and minimum wage protections. Local development strategies are also necessary for urban and rural areas, including agriculture, along with an appropriate legislative framework.

The basic elements of these fundamental frameworks must be implemented at all levels of supply chains, and include:

Social dialogue and collective bargaining are essential to ensure the engagement of actors in the real economy in developing and implementing consensus-based responses that support decent work and promote an equitable and sustainable recovery from the crisis.

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Homework takes different forms

National lockdown measures have drastically reduced demand in many sectors, such as the garment sector, where home work is prevalent. Those workers who produce for global supply chains are particularly affected by this, as their incomes depend heavily on now suspended orders from high-income countries. Entire communities may depend heavily on such work, which has often already been produced, but was not paid for.

Convention No.177 calls for the development of a national policy on home work with the aim of improving home work conditions and equality of treatment. Key issues include: freedom of association and collective bargaining rights, remuneration, working time, and occupational health and safety.

Telework is also a form of homework​

During the pandemic, many workers have teleworked or are still teleworking, often full-time and for long periods. Telework has been facilitated by developments in technology and the way that work is being organized in different economic sectors. Although it is not suitable for all circumstances, where it is an appropriate option, telework can help ensure business continuity and preserve jobs. Provisions governing the use of telework in accordance with principles of decent work should form part of policy responses during the pandemic and beyond.

The advantages of teleworking, such as a reduction in daily commutes and more flexible work arrangements, may be offset by the tendency to work longer hours, blurring of the lines between professional and personal life, and the intensification of work. There is also the risk that excessive remote supervision by employers could interfere with workers’ privacy interests. It is important to note that the Home Work Convention applies to those who telework on a regular basis, but not to those in office-based work who occasionally telework. General Survey, paragraphs 616 and 617.

General Survey, paragraphs 616 and 617.

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Equality of opportunity and treatment for persons with disabilities

It is essential to guarantee equality of opportunity and treatment for workers with disabilities in all phases of working life, especially given that almost everyone will acquire a temporary, chronic or permanent impairment at some point in their lives, whether due to accident, illness, or simply the aging process. General Survey, Paragraph 641.

In promoting employment and decent work for persons with disabilities on an equal basis with other workers, it is crucial to raise awareness of their capacities. Equality of opportunity and treatment includes equal access to education, vocational rehabilitation and training–including lifelong learning– to enable persons with disabilities to find, remain and advance in employment.

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The COVID-19 pandemic is creating a multi-dimensional crisis for young people around the world

Equality of opportunity and treatment in employment and occupation is a core principle of the ILO’s decent work agenda. To apply this fundamental principle, countries should seek to develop and implement inclusive national employment policies, addressing the needs and concerns of all members of the population, especially those more vulnerable to exclusion.

Everyone should have the opportunity to access full, productive and freely chosen employment. Against a backdrop of growing inequalities, the close link between productivity and poverty reduction should be re-examined. It is also critical for everyone to enjoy equal access to quality education and training, which includes lifelong learning and provides opportunities to access, remain in and advance in employment.

Even prior to the pandemic, around one-fifth of young people worldwide (267 million) were not in employment, education or training (NEET). This rate is particularly high for young women in lower-middle income countries, where it reaches almost 40%. The current trilemma that the crisis poses for youth is:

  1. Disruption to their education and training
  2. A wave of job losses
  3. Increased job-search difficulties

One of the overall objectives of a national employment policy should be to achieve greater equality of opportunity in terms of access to employment and decent work. This must include equality of treatment concerning conditions of work and protection of specific groups of workers. General Survey, Paragraphs 785 and 791.

Looking to the future

A new generation of inclusive, evidence-based and gender-responsive employment policies based on international labour standards can provide a solid foundation to build for the future. The principles of the instruments examined in the 2020 General Survey and the Committee’s conclusions and recommendations on the effective application of these principles are more relevant than ever in the context of COVID-19 and its aftermath. Based on the guidance provided by the instruments under review, governments, with the participation of workers’ and employers’ organizations, as well as representatives of those members of civil society affected by the measures taken, have the tools to design and implement a new generation of gender-responsive inclusive policies and programmes. The employment instruments can thus contribute to ensuring resilient societies, economies and institutions capable of building a brighter, more inclusive future of work.

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Designing a new generation of employment policies and programmes

Many governments have taken a range of immediate and longer-term measures to mitigate the impact of the crisis on enterprises, workers, jobs and livelihoods. These include measures to:

(a) Stimulate the economy and employment

In order to address the devastating impact of COVID-19 on the demand and supply sides of the labour market, governments have adopted a broad range of measures to stimulate the economy, support enterprises, jobs and incomes, including through active fiscal policies, accommodative monetary policies and provision of financial support for enterprises and workers in specific sectors.

(b) Support enterprises, jobs and incomes

Throughout the pandemic, governments have given priority to providing income compensation to workers and reducing the risk of more job losses through employment retention programmes, subsidized recruitment for eligible enterprises, including small and medium size enterprises, as well as training and placement services to enhance workers’ employability and facilitate their redeployment from one job to another.

At the same time, the pandemic has alerted the international community to the urgent need to accelerate progress in building, strengthening and progressively expanding social protection systems, including social protection floors. Countries have adopted a wide variety of employment retention measures, including work-sharing, shorter workweeks and wage subsidies. Some enterprises have agreed to take on workers from other firms in hard-hit sectors. Other measures seek to help enterprises survive the crisis through grants, subsidies and loans, the payment in whole or in part of rent and utility costs, debt payment moratoriums or the deferral of social security and pension contributions.

(c) Protect workers in the workplace

As enterprises and workers resume their activities, the main challenges include keeping workers safe and preventing the spread of the virus. Occupational safety and health measures have been adapted in most countries though the establishment of workplace policies that set out basic measures to prevent the transmission of COVID-19, including the use of masks, protective clothing, social distancing and engineering controls in many workplaces.

Executive summary.

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COVID-19 has increased existing uncertainties in determining when an employment relationship exists

It is more urgent than ever to develop clear criteria for determining the existence of such a relationship in light of the transformations in the world of work due to the pandemic. Almost half of the world’s workers (47 per cent) are self-employed. Measures intended to increase flexibility and adaptability to the crisis are affecting the working conditions of millions, and in many cases modifying the employment relationship.

In some countries, the measures adopted include the temporary suspension of the effects of labour contracts. In such cases, workers, in principle, do not receive their wages; although, sometimes a specific COVID fund has been established to cover such wages. Other measures consist of the suspension of acquired contractual rights.

The situation of workers on temporary contracts is clearly more precarious than that of workers on permanent contracts. Indeed, in the context of the pandemic they have been the first to be laid off. In some countries, measures have been taken to expand the rights of these workers and the maximum duration of these temporary contracts has been extended during states of emergency as a way of mitigating the impact of the crisis on enterprises and reactivating the labour market.

This reactivation has translated at the same time into an increase in part-time work, on-call work and zero-hour contracts as well as platform work. Many platform workers have performed functions considered essential during the pandemic, such as home delivery services; however, they have been exposed to increased risk of infection without access to personal protective equipment, social distancing measures, or even the right to health care or social protection in the event of illness. Moreover, those workers in sectors that were disrupted found themselves without any income or social protection. The pandemic has highlighted the precarious situation of these workers and raised awareness of the need to take action to improve their working conditions.

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Informality must be addressed as a matter of urgency

Those in the informal economy have been affected to a greater extent than in past crises, resulting in an increase in the rate of relative poverty. According to ILO estimates, 1.6 billion informal economy workers, representing 76% of informal employment worldwide, have so far been significantly affected by the lockdown measures. Many are self –employed; moreover, many informal workers cannot work remotely from home. For these workers, choosing to stay home and not work often means losing their jobs and livelihoods. In turn, defying preventive measures exposes them and their families to the virus. Moreover, they generally have little or no access to health-care services or social protection. Economic units in the informal economy, which account for eight out of every ten enterprises globally, are facing a similar situation.

The effects of the crisis have varied across the different sectors of the informal economy. In addition, workers and economic units in the informal economy are in many cases difficult to reach, which means that they often do not receive the assistance that they need. Digital technology has proven to be an effective tool to identify or facilitate the self-identification of workers and enterprises in the informal economy to enable them to have access to benefits. Nevertheless, information management systems are still inefficient in many countries, resulting in the exclusion of many people in need of assistance.

As the impact of the pandemic continues to intensify around the world, rapid diagnostics are being conducted to assess the impact on the economy of existing policies. The lack of occupational safety and health measures, barriers to safe workplaces and markets, increased risks of child labour and debt bondage are some of the many problems faced by those working in the informal economy.

The Addendum also highlights measures taken by governments and the social partners to prevent the informalization of enterprises and jobs, to ensure an adequate level of income or income support and to extend social protection.

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Home work in the framework of the COVID-19

The pandemic has accentuated the need for a comprehensive integrated policy framework to protect the labour rights of traditional homeworkers as well as of the increasing numbers of teleworkers. On the one hand, some economic sectors where home work is prevalent have faced a substantial drop in demand for their products, with a consequent decline in income for homeworkers. The garment sector has been particularly affected by this situation. On the other hand, vast sectors of the economy have turned to teleworking, when it was possible given the characteristics of the job and the technical possibilities of the companies. In fact, some jobs can be broken down into separate tasks that can be performed anywhere, thereby expanding the range of jobs suitable for telework.

However, working from home also entails risks, including responsibility for operational and material costs, difficulties in reconciling work and family responsibilities, excessive working hours without the right to disconnect, lack of privacy and even violence and harassment.

This situation has given rise to a broader debate on the implications of home work, and in particular telework, for both workers and employers. Several countries have already taken measures, through legislation or collective bargaining, to address these issues.

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Ensuring a disability-inclusive response to COVID-19

Persons with disabilities must be included and involved in all stages of response and recovery to ensure the development and implementation of policies and programmes that meet their concerns and ensure equality of opportunity and treatment in the labour market. Persons with disabilities already tend to face discrimination and exclusion in employment. The pandemic has starkly accentuated existing stigma and increased existing vulnerabilities and risks. Indeed, the COVID-19 pandemic has created new barriers for the access of persons with disabilities to services and support. They may be significantly affected by disruptions to the services on which they normally rely. Moreover, social isolation and loneliness during lockdown may have severe psychological impacts, leading to mental illness.

Persons with disabilities may need specific protection or accommodation to enable them to work safely. Reasonable accommodations at workplaces can vary from no- or low-cost solutions ranging from flexible working hours to assistive devices such as screen reading software. Telework may be also a solution for workers with disabilities. It is important to recall that due to their high incidence in informal employment, many persons with disabilities have little or no access to social protection. The coverage gaps are significant in some developing countries.

The Addendum underlines the diverse measures taken by governments for persons with disabilities, particularly those that are self-employed or in the informal economy. These measures range from cash transfers to flexible working arrangements and paid leave for family members of persons with disabilities. Persons with disabilities who continue to work should be provided with accessible and updated information on the health risks of COVID-19 and on how to protect themselves and prevent further transmission. Moreover, organizations of and for persons with disabilities should be consulted when designing, implementing, monitoring and reviewing response and recovery measures.

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Building a better future for all after COVID-19 through a process of inclusive social dialogue

Global crises, such as the current one generated by the pandemic, tend to follow the fault lines of society, throwing existing inequalities into sharp relief. The virus knows no borders or social barriers, yet not all people have the same resources to protect themselves and to cope with the consequences of the pandemic.

Containment and social distancing measures have disproportionately affected many sectors where women predominate, such as the garment manufacturing industry, health, communications, care, and domestic work. Also, containment measures, and in particular the closure of schools and childcare facilities, have increased the burden of unpaid care in the home. These tasks are still, in many cases, disproportionately performed by women. The increased work and family obligations due to confinement have created additional psychological pressure with consequent risks to the mental health of many workers, particularly women.

Young people often experience great difficulties in entering the labour market. The pandemic and containment measures are affecting young people primarily in three ways: interruption of education, training and apprenticeship reduces their employability; the employment crisis makes it even more difficult for them to find work; and the wave of job losses has led to reduced earnings and deteriorating working conditions. The consequences of the pandemic could result in the emergence of a « lockdown generation ».

Migrant workers, older workers, domestic workers, indigenous and tribal peoples, people living with or affected by HIV or AIDS and rural workers are also disproportionally affected. These groups are generally concentrated in low-paid jobs and in those sectors most affected by the pandemic, sometimes in precarious employment conditions, including in the informal economy. In addition to having been historically subjected to stigmatization, discrimination and exclusion, they are now also experiencing increasing levels of violence and harassment.

The design and implementation of the new generation of national employment policies must take into account all aspects of economic and employment growth. It must also be inclusive, consensus-based and ensure equality of opportunities and treatment for all.

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Promoting employment and decent work in a changing landscape