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What is the Labour Rights Index?
The Labour Rights Index is a de jure index that measures the major aspects of employment regulation affecting a worker during the employment life cycle in 135 countries. It limits itself to the presence or absence of relevant labour legislation only.
What is new in the 2022 edition of the Labour Rights Index?
- It has 20 new countries, thus raising the number of countries to 135;
- It now includes more contextual indicators to help understand the scores in a country;
- It gives a complete legal basis for each component score, adding to the transparency on how each country was scored and rated;
- It shares relevant legislative trends since 2020, whether there has been a reform or if the legislation has remained the same;
- It showcases the covid-19 and labour market reforms with regard to paid sick leave, prohibition on dismissals, reduction or waiving off the social security contributions, etc
- It illustrates the ratings in the form of regional maps as well.
How is Labour Rights Index data collected?
The Labour Rights Index has 10 indicators and 46 components or evaluation criteria. The scoring is based on an analysis of thousands of pages of labour legislation. Instead of engaging outside experts, the work is done solely by the WageIndicator Labour Law Office, i.e., the Centre for Labour Research (Pakistan) with support from WageIndicator country teams.
How are the Labour Rights Index questions chosen?
The Index looks at every aspect of the working lifespan of a worker and identifies the presence of labour rights, or the lack of it, in national legal systems worldwide. It covers 10 topics/indicators and 46 components/evaluation criteria. All of these are based on substantive elements of the Decent Work Agenda. All these are grounded in UDHR, five UN Conventions, five ILO Declarations, 35 ILO Conventions, and four ILO Recommendations.
How are the questions scored?
The Labour Rights Index measures major aspects of employment regulation that affect a worker during the employment life cycle. The Index provides an overall score for each of the 135 countries covered. 46 data points are obtained across 10 indicators of four to five binary questions, where each indicator represents an aspect of work which is considered important for achieving decent work.
The scores for each indicator are acquired by computing the unweighted average of the components under that indicator and measuring the result to 100. The final scores for the countries are then determined by taking each indicator's average, where 100 is the maximum score to achieve.
Certain assumptions for scoring exist in the methodology. The following assumptions are used by the Labour Rights Index. The worker in question:
- Is skilled;
- Is a minimum wage worker;
- Resides in the economy's most populous province/state/area;
- Is a lawful citizen or a legal immigrant of the economy;
- Is a full-time employee with a permanent contract in a medium-sized enterprise with 60 employees;
- Has work experience of one year or more;
- Is assumed to be registered with the relevant social security institution and for a long enough time to accrue various monetary benefits (maternity, sickness, work injury, old age pension, survivors', and invalidity benefit); and
- Is assumed to have been working long enough to access leaves (maternity, paternity, paternal, sick, and annual leave) and various social benefits, including unemployment benefits
How can Labour Rights Index findings be used?
The Labour Rights Index is essentially directed at governments and international organisations, targeting trade union federations, multilateral organisations and national level organisations like government agencies. It is aimed to be a tool for policymakers. However, most of all, the Index can be used by workers.
National scores can be used as starting points of negotiations and reforms by the civil society organisations. Ratings can be made prerequisites for international socio-economic agreements to ensure compliance with labour standards, similar to EU's GSP+ and USA’s GSP which require compliance in law and practice with certain labour standards in order to avail certain trade benefits through reduced tariffs.
The Labour Rights Index is also a useful benchmarking tool that can be used in stimulating policy debate as it can help in exposing challenges and identifying best practices. The Index provides meaningful input into policy discussions to improve labour market protections at the country level.
The Labour Rights Index is a repository of 'objective and actionable' data on labour market regulation along with the best practices which can be used by the countries worldwide to initiate necessary reforms. The comparative tool can also be used by Labour Ministries for finding the best practices within their own regions and around the world.
Does the study measure implementation?
Labour Rights Index is a de jure index and it measures presence or absence of relevant legislation only. While recognizing the existence of implementation gaps in legislative provisions, well-drafted and inclusive laws are still a precondition for attaining decent work. There is not a single country where workers have attained decent work without legislation. Implementation is critical; however, it is difficult to take a de facto approach and measure the labour rights situation across 135 economies and 46 evaluation criteria in a comparable and cost-effective way. The detailed country profiles provide a list of contextual indicators including but not limited to labour force, GDP per capita, share of informal employment in the country, trade union density, work injuries, etc. to contextualise the scores given to a country. The scores must be interpreted and seen together with this contextual information.
Does the Labour Rights Index include information affecting workers in the informal sector?
The Index is based on labour legislation which applies to the formal economy in the private sector. Despite the fact that more than 60 percent of the global workforce is in need of transitioning from informal to the formal economy, focusing on the labour laws affecting the formal sector retains attention on the sector since the labour laws in the formal economy are more applicable and that is the ultimate goal. Focusing on the formal economy and its applicable legislation also indicates the kind of rights that will be available to the informal economy workers on successful transition to the formal economy. However, to recognise the new forms of work, legislation affecting gig economy workers has been made part of the Index.
How frequently are the scores updated?
The Labour Rights Index is biennial and updated every two years. The first version of the Index was launched in September 2020. The second edition of the Index in 2022 takes into account labour legislation, in effect on 1 January 2022. The Index is updated every two years. It is also planned to extend the coverage to 145 countries in the coming years. These mainly include countries from Central Asia, Sub-Saharan Africa, and some South American countries. Any future legal updates which lead to changes in the scores will also be included.
What when you work in the informal sector? How useful is the Index?
The Labour Rights Index shows the statutory labour rights for the workers in formal employment relationships because this is where the labour law applies. The informal economy, as defined by ILO Recommendation 204 on Transition from Informal to Formal Economy, refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements. A country's labour law, based on minimum employee threshold, is not applicable to the informal sector. However, people in the informal sector can use the country profiles in the Index to know about basic labour rights that are available in the country and launch advocacy campaigns through their representative organisations to have access to the same or similar labour rights. The first step for the informal sector workers should be to get all those rights which have been guaranteed to the formal sector workers. The next step could be striving towards the rights set in the international labour standards.
What when you work part-time? How useful is the Index and what can you learn from it?
The Labour Rights Index does not take into account part-time work legislation. However, it is already planned to include equal treatment of part-time workers with full-time workers in the upcoming editions of the Index. The current Index still gives pro rata treatment to part-time workers when compared with full-time workers.
Being unemployed due to COVID-19, how can the Index help you?
The current version of the Labour Rights Index showcases, for each of the 135 countries, the COVID-19 and labour market reforms with regard to paid sick leave, prohibition on dismissals, reduction or waiving off the social security contributions, etc. The topics covered under the Index also help you to know about your rights during the pandemic. These rights include the right to sickness benefit, the right to personal protective equipment, and the right to unemployment benefits.
A linked exercise that the WageIndicator Foundation has done after COVID-19 is to create a repository of labour market reform measures initiated by the Governments. That can be used by the unemployed along with the Index. Please find the overview of the Labour Market Reforms here.
Does the Labour Rights Index cover both public and private sector labour legislation?
The Labour Rights Index and its base document. i.e. the Decent Work Checks are mainly focused on legislation in the private sector. The public sector jobs are comparatively more secure and have access to many workplace rights. In many countries, the same labour legislation exists for both public and private sector workers, except some differences in the right to collective bargaining and the right to strike. In countries where separate labour legislation exists for the public sector, e.g. India, the Index considers only the private sector labour law.
However, considering the fact that the public sector comprises more than 10% of total employment in a country, the Index may in the future start covering the public sector legislation in WageIndicator countries and also analyse it. The legislation in the public sector may still not be used for scoring purposes but it can be shown how legislation differs in both sectors.
One of the assumptions in the Index is that the “worker is a full-time employee with a permanent contract in a medium-sized enterprise with 60 employees”. Does it mean that the Index does not cover small enterprises?
The Labour Rights Index covers all such enterprises, irrespective of their size, where private sector labour law is applicable. However, to ensure comparability of data, such standardised assumptions are used. For example, in Pakistan, industrial sector workers are eligible for severance payment if they are working in an enterprise employing at least 49 workers. Pakistan and Sri Lanka are such countries where different legislation exists for industrial and non-industrial sectors. To take such differences into account, standardised assumptions have been used. The World Bank, in both its reports, The Doing Business Report and Women, Business and Law Report, uses a similar assumption.
Does the Index cover only labour law or rules and regulations as well?
The Labour Rights Index is based on Decent Work Checks, a product of WageIndicator which summarises labour legislation on 13 topics and 48 sub topics. These documents take into all labour legislation which includes labour law as well as any rules and regulations notified under it.
In case of doubt about scores, where can one check the law?
The current version of the Index provides the legal basis for each of the 46 components for all 135 countries. In addition, the Labour Rights Index is based on Decent Work Checks which are available both as standalone documents and are also available onWageIndicator country websites as Labour Law pages. A user can access either of these resources and look into actual text. We also provide reference to actual law in these pages. At the same moment, it is also recommended to have a look at the LRI methodology to better understand the scoring.
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