Extending labour inspections to the informal sector and agriculture, CPRC Working Paper No. 154

Abstract

Labour inspections could, in theory, improve labour standards and help countries move towards decent work goals and the elimination of chronic poverty. But, in practice, inspections are either not conducted or do not result in penalties for those who break the law. Using the case of India, and examining labour contracts and standards in selected informal agricultural and non-agricultural occupations, the author identifies the reasons for this state of affairs: corrupt and under-resourced labour departments; subcontracting arrangements where employer-employee relationships are difficult to prove; little political commitment to improving labour standards; and poor coverage of new categories of work by existing labour laws. The paper also documents how, in the absence of an effective labour inspection machinery, civil society organisations and the media have successfully mobilised consumers and NGOs in the West to put pressure on suppliers in global value chains to improve labour standards and eliminate child labour. Those sectors that are being watched include the garment industry, stone quarries, the carpet industry and cottonseed production, all of which have links with rich countries. But occupations in sectors that are not linked to the outside world, such as work in sugar fields and in construction, continue to violate labour laws with impunity. The author concludes that regulation is important in a context where employer-employee relations are highly unequal and where workers in the informal sector are adversely incorporated into markets and value chains. More political commitment from national governments and more resources from governments and donors are needed for improving labour standards, and conventional inspections need to be replaced by multi-party inspections involving the media, researchers, NGOs, advocacy groups and human rights organisations. The author also concludes that, contrary to popular belief, there is a need for new legislation for categories of work that fall outside existing legislation