Transitioning from informal to formal employment |30 March 2023
Minister Francourt addressing the gathering
• Government departments discuss drivers of informality
The Employment department has started discussion to address the drivers of informality in the country and how to encourage workers in the informal sector to transition into formal jobs.
A consultant from the International Labour Organisaiton (ILO), Stephane Peuse, has been in the country for the past two weeks, where he held several meetings with government departments to discuss the challenges they face and listen to their suggestions on ways to remedy the situation.
On Monday the department held a roundtable session at the STC conference centre, to look at factors driving people into informal employment.
The 2020 National Statistics Bureau on informal employment put the number of people working in the sector at 8204, which represented 16.9 percent, among which 74 percent were men.
According to the department’s chief policy analyst, Susan Morel, this was quite significant and the country needs to come up with strategies and recommendations to encourage them to leave the informal sector and move into the formal setting.
“For each of these people, their circumstances are different. Either they are doing casual work where they are not paying any taxes or contributing towards pension or the business is not registered to the Seychelles Licensing Authority or the Seychelles Revenue Commission. So, they are doing their economic activity in an informal way,” she explained.
Ms Morel said that there are a lot of disadvantages as well since being in informal employment means the person’s work is not safe or secure, and the person might not get enough rest compared to an employee in the formal setting.
“We also need to find mechanisms to entice them to transit to the formal sector because Seychelles depends a lot on foreign labour as our demand for employment is high. So we need the maximum of locals to be working and contributing into the economy,” said Ms Morel.
At Monday’s roundtable, the participants were separated into four groups where they each addressed a topic. Group 1 focused on Regulation and some of the points raised were that informal employment encourages higher wage, promotes human trafficking and other forms of abuse, as well as encourages unsafe work practices leading to injuries which are not covered under the insurance. Some of their recommendations were to amend relevant laws regarding business registration, license and tax, increased enforcement and inspections.
Group 2 addressed Production and the challenges highlighted were the impact of informal employment on service delivery, skills mismatch, and lack of expertise among others.
Group 3 comprising employers and workers organisations pointed out that agreements in the informal sector are mostly done verbally, leaving no proof of records, and informal workers could not be properly organised and had no specific location.
The last group which focused on working conditions and social protection stated that those workers could not be covered under any legal framework for assistance as was the case during the Covid-19 pandemic.
All the points raised and their recommendations will be compiled into a report by the ILO consultant and submitted to the Employment department, which will be advising them on the policies to facilitate the transition from informal to formal jobs.
When addressing the participants at the end of the session, the Minister for Employment and Social Affairs, Patricia Francourt, said she hoped the recommendations put forward would “indeed help to make a difference in the lives of those working and doing business in the informal economy. We equally anticipate that your input will be a contribution in bridging the skills and labour shortage gap”.
She urged those working in informal employment to take the opportunities available as being in a formal employment has many benefits.
“For example, formal employment can bring in a stable income for the family, enhances social protection, work is more decent and safe, workers contribute to the economy and they also contribute to their pension that they can benefit from in their old age. Job security also brings in peace of mind, you can plan better for the future. There is also opportunity for career advancement and training,” concluded the minister.
Patsy Canaya
