Informality, employment contracts, and social insurance coverage: rights-based perspectives in a developing world context

10 June 2013

This contribution critically reflects on rights-based perspectives in relation to the extension of social security, in particular social insurance coverage to those who work informally, with a focus on the developing world. It is argued that the traditional social security concept is insufficient in this regard, mainly as a result of its particular focus on formal employment-based social insurance, its emphasis on state-regulated and formal forms of social security, and a narrowly focused risk/benefit approach, which does not reflect the true needs and situation of those who work informally. Domestic (social security) legal systems, as is the case with international standards embedded in most of the International Labour Organization (ILO) instruments, have a primary focus on those in the formal economy, who work within the framework of an identifiable employment relationship. In addition, there appears to be little scope to apply employment contracts outside the framework of the traditional employment relationship to support coverage extension of social insurance arrangements. Alternative approaches to and opportunities for coverage extension are suggested. These include: adopting innovative conceptual approaches to extend coverage beyond those who work in terms of a contract of employment; using contractual tracking approaches and deeming measures; and deliberately widening the base of social insurance coverage through targeted accommodation of informal workers. Finally, it is argued that there is need for a strengthened rights-based framework, supported and informed by suitable international standards, regional norms, and constitutional prescriptions, to ensure that social security, in particular social insurance coverage, is extended to informal workers.