Status of work on the International Classification of Status in Employment

Transcription

1 ESA/STAT/AC.267/20 9 May 2013 UNITED NATIONS DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS STATISTICS DIVISION Expert Group Meeting on International Statistical Classifications New York, May 2013 Status of work on the International Classification of Status in Employment David Hunter, ILO

2 International Labour Organization Status of work on the International Classification of Status in Employment David Hunter, Department of Statistics Introduction 1. The current version of the International Classification of Status in Employment (ICSE- 93) was adopted through a resolution of the Fifteenth International Conference of Labour Statisticians (ICLS) in January It classifies jobs with respect to the type of explicit or implicit contract of employment between the job holder and the economic unit in which he or she is employed. It aims to provide the basis for the production of internationally comparable statistics on the employment relationship, including the distinction between salaried employment and self-employment. 2. The following five categories are specified, with the last four defined as the selfemployed.: Employees Employers Own-account workers Members of producers cooperatives Contributing family workers 3. There is concern that these categories do not provide sufficient information to adequately monitor changes in employment arrangements that, in many countries, are blurring the boundaries between self-employment and salaried employment. It is also felt that the classification does not provide sufficient detail for the provision of statistics that adequately satisfy user needs. 4. The 18 th ICLS identified the changing structure of the labour force, including a revision of ICSE-93, as a priority for the future methodological work of the ILO in labour statistics. The draft resolution concerning statistics of work and of the labour force if adopted by the 19 th ICLS, may also have a significant impact on the scope and nature of statistics on status in employment, and lead to a change in the boundary between employment and other forms of work. It has not been possible, therefore, to develop a

3 complete proposal for the revision of ICSE-93 in advance of the ICLS. Any such this proposal would have to anticipate the outcome of deliberations on labour force and work statistics at the same conference. 5. The ILO is therefore preparing a working paper that will summarize the known problems with ICSE-93, as well as the range of existing national practices with respect to statistics on status in employment and other aspects of the employment relationship. This paper will also identify ways in which either ICSE-93 could be modified, and/or other standard classifications and variables could be developed as a complement to Status in Employment, in order to better reflect contemporary realities and economic and social concerns. It will present various options for the revision of ICSE-93 that reflect possible outcomes from the ICLS deliberations on standards for statistics on work and the labour force and work statistics. The working paper will be released in advance of the ICLS and made available as room document during the conference. Applications and statistics required 6. Statistics classified by status in employment are used for a wide variety of purposes in both economic and social analysis. They provide important information on the nature of the economic risk and authority that the employed population experiences at work, and on the strength and nature of the attachment of the employed population to the employer, as a potential indicator of precarious employment situations. Changes in status in employment distributions may reflect the relationship between economic cycles and employment in higher risk, lower income, less secure, or precarious working situations (for example, the extent to which persons who lose jobs in paid employment engage in various forms of self-employment). Increases in the number of persons employed as contributing family workers may reflect a deterioration in labour market conditions. 7. Economic and labour market policy analysts use statistics on status in employment to assess the impact of self-employment and entrepreneurialism on employment and economic growth and to evaluate the consequences for government policies related to economic development and job creation. Data classified by status in employment are also required as an input to the compilation of national accounts. 8. In social statistics status in employment is an important explanatory variable and is frequently used as an input variable in the production of statistics on the socio-economic status of persons and households. 9. Reflecting these diverse uses, statistics on status in employment are widely collected in household-based collections such as labour force surveys, social surveys and population censuses as well as in employer surveys. The current situation 10. In addition to the five substantive categories of status in employment, the 15 th ICLS resolution provides advice on the possible statistical treatment of particular (optional) groups. It notes that, according to national circumstances, some of these groups may need to be separately identified, either as sub-categories of the five groups listed above, or as groups that cut across two or more of the substantive groups. These groups include, but are not limited to the following:

4 - Owner-managers of incorporated enterprises; - Employees with fixed-term contracts; - Workers in casual, short term and seasonal employment; - Outworkers - Contractors - Workers engaged by labour hire companies - Work gang members - Franchisees - Sharecroppers - Communal resource workers - Subsistence workers. 11. These groups are not organized into a coherent classificatory framework and the advice provided in the ICSE-93 resolution is not definitive about the treatment of some groups. For example, owner-managers of incorporated enterprises and contractors may be classified as employees or as self-employed according to national circumstances. 12. Owner-managers of incorporated enterprises are workers who have arrangements whereby the worker and the establishment that they own and operate are separate legal entities. This generally means that there are limitations on personal legal and financial liability in relation to the activities of the establishment, implying that they are exposed to less financial and legal risk than (other) self-employed workers. Legally and for national accounts purposes these workers are considered as employees of the establishment they own and may receive a regular salary. In other respects they closely resemble the selfemployed. They singly or jointly control the enterprise in which they work. They may or may not have paid employees on a continuous basis and they may have assistance from contributing family workers. 13. Contractors, according to the ICSE-93 resolution, are either registered with authorities as a separate business unit responsible for the relevant forms of taxes, or the employing organization is not responsible for relevant social security payments, or the contractual relationship is not subject to national labour legislation applicable, for example, to 'regular employees'. They hold explicit or implicit contracts which correspond to those of 'paid employment', generally with a single employer. Whilst they may be considered from a legal point of view to be self-employed, the reality of their employment situation is little different from that of paid employees. 14. A review of national practices with respect to the compilation of statistics on status in employment, conducted by the ILO in 2012, showed that almost all countries that have recently conducted a labour force survey compile statistics on status in employment. In most cases the classification of status in employment used is based on or related to ICSE- 93. In national adaptations of ICSE-93, some countries have created additional detailed categories and inconsistently included some of the groups identified above in the top level categories of ICSE-93. Countries have also created additional variables and classifications to measure particular aspects of the employment relationship.

5 15. The ILO review revealed that a significant minority of countries separately identify workers engaged by labour hire companies, and subsistence workers. Most countries produce statistics on workers in casual, short term and seasonal employment, but this is most frequently done as part of a separate variable. In addition to the groups specified in the 15 th ICLS resolution as possibly requiring separate identification according to national circumstances, a significant number of countries compile statistics on apprentice and trainee workers or on domestic workers, as part of the status in employment variable. 16. A relatively small number of countries provide separate statistics for owner managers of incorporated enterprises and for contractors. In those cases where they are not separately identified, it is not always clear whether these two groups are treated as selfemployed. There is significant variation in practice among countries. As a result, there are serious implications for the international comparability of statistics classified by status in employment, especially with respect to aggregate statistics on the dichotomy between self-employment and salaried employment. 17. Very few countries use the substantive category Members of producers cooperatives. Employment in this group exceeded one per cent of total employment in only 3 of these countries in Issues to be addressed in revising the International Classification of Status in Employment 18. In light of these findings, it is proposed that work to review ICSE-93 should focus on the boundary between self-employment and other forms of employment and on the treatment and need for separate identification of the following groups of workers: Fixed-term, casual, short term and seasonal employees Paid and unpaid apprentices, trainees and interns Owner-managers of incorporated enterprises Contractors Members of producers cooperatives Domestic workers Workers engaged by labour hire agencies 19. Subsistence workers, or producers of goods for own consumption, are also an important group about which there is a significant demand for statistical information. The draft resolution concerning statistics of work and the labour force, however, identifies the production of goods for own consumption as a separate form of work no longer to be counted as employment. The inclusion of this group in a future international classification to replace ICSE-93 would thus extend the scope of the classification beyond employment, to embrace other forms of work. 20. These issues raise questions about what the most appropriate scope of the successor to ICSE-93 might be. Is there a need, for example, for a single international classification of status of worker or forms of work that includes categories for some or all forms of work such as volunteer work and own-production work as well as detailed categories related to status in employment? Is it preferable, on the other hand, to retain a classification that is restricted to employment?

6 21. Any movement in the boundary between employment and other forms of work arising from the adoption, at the 19th ICLS, of a resolution concerning statistics of work and the labour force, would add to the already pressing need to update ICSE-93 so that it can be used to adequately measure changes in the nature of the employment relationship and provide a stronger basis for the production of internationally comparable statistics. 22. It is proposed to seek advice from the 19th ICLS on the revision of ICSE-93 during a session that will take place after detailed discussion of the draft resolution on statistics of work and the labour force. Advice will be sought in particular on the issues outlined below 1) The need for separate identification in the successor to ICSE-93 of any of the groups workers identified in paragraph 18 above. 2) Whether there any other groups that need to be separately identified 3) Whether the classification be restricted to employment as defined in the final resolution on statistics of work and the labour force, or extended to include some or all other forms of work. 4) The most appropriate framework for the classification structure, taking into consideration the issues, options and scenarios presented in the ILO Working Paper. 5) The appropriate timeframe for completion of work to update ICSE-93 and what mechanisms should be used to support ILO work and facilitate formal adoption of the new classification. For example, should the ILO be mandated to seek adoption of the successor to ICSE-93 by a tripartite meeting of experts on labour statistics, as was the case with ISCO-08, rather than waiting until the 20 th ICLS? 23. The ILO is seeking guidance on and support for its work on updating ICSE-93 from the Working Group for the Advancement of Employment and Unemployment Statistics. This group was originally established to assist the ILO in the development of proposals for the draft resolution on statistics of the labour force and work. Its involvement in the work on status in employment reflects the fundamental importance of status in employment as a core element of labour force statistics and as a complement to statistics on employment and unemployment. In view of the relatively small number of categories likely to be included in the successor to ICSE, detailed involvement of specialists in classification may not be necessary. 24. The Expert Group may wish to discuss the issues identified above and provide guidance on the review process.

7 Annexe Possible approaches to the structure of the successor of ICSE-93 A number of possible scenarios could be envisaged in an updated ICSE. For example it would be possible to include contractors and/or owner managers of incorporated enterprises either as self-employed or as employees in paid employment, while providing sufficient detail to allow input of data for SNA purposes. Alternatively, it may be more appropriate to abandon the dichotomy between self-employment and paid employment, as this distinction may not be considered relevant to groups such as contractors, and owner-managers of incorporated enterprises. Separate identification of these groups at the detailed level would facilitate production of data for national accounts purposes. Under any of the above scenarios, it would be possible to create additional categories for regular, short-term/casual/seasonal employment, and for apprentices and trainees at the second or third level of a classification hierarchy. The outline of possible classification structures according to each of the approaches described above is presented below. In each case this could be a standalone classification or it could be embedded within a broader classification of forms of work. For the sake of simplicity, members of producers cooperatives have not been separately identified within all of these scenarios. They could easily be incorporated if it is shown that there is an ongoing demand for their separate identification. The first two options are presented as if both contractors and owner-managers of incorporated enterprises would be treated in the same way. Adjustments could easily be made if it was decided that one of these groups should be treated as self-employed and the other as employees.

8 Structure 1: Include contractors and/or owner managers of incorporated enterprises as self-employed Self-employed - Employer In own incorporated enterprise In own unincorporated enterprise - Own account worker In own incorporated enterprise In unincorporated enterprise - Independent contractor (in a third party enterprise) - Contributing family worker Employees - Regular employee - Casual, short-term or seasonal employee - Apprentice, trainee or intern - Domestic employee Structure 2: Include contractors and owner managers of incorporated enterprises as employees Self-employed Employer in unincorporated enterprise Own account worker in own unincorporated enterprise Contributing family worker Employees In own incorporated enterprise With employees Without employees Regular employee Casual, short-term or seasonal employee Apprentice, trainee or intern Independent contractor (employed in a third party enterprise)

9 Structure 3: Abandon dichotomy between paid employment and self-employment Employers - In own incorporated enterprise - In own unincorporated enterprise Own account workers - In own incorporated enterprise - In own unincorporated enterprise Independent contractors Contributing family workers Employees - Regular employee - Casual, short-term or seasonal employee - Apprentice, trainee or intern - Domestic employee Structure 4: Proposal inspired by analysis of current national practices Employees - Permanent employee - Temporary employee Fixed-term Seasonal Casual On-call Apprentice, trainee or intern - Workers on oral agreement - Domestic employee Self-employed - With employees in incorporated enterprise - With employees in unincorporated enterprise - Without employees in incorporated enterprise - Without employees in non-incorporated enterprise - Contractors Others forms of employment - Contributing family worker - Member of producers cooperatives - Other forms of employment not elsewhere classified