METHODOLOGY
The subtopics in a Decent Work Check (DWC)42 have been used to structure 46 questions under the indicators in constructing this Index. 46 data points are obtained across 10 indicators, each of which contains four to five binary questions. Each indicator represents an aspect of work which is considered important for achieving decent work43 (Table 1). The scores for each indicator are obtained by computing the unweighted average of the answers under that indicator and scaling 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. Each sub-component with four questions has a score of 25. For sub-components with five questions, the individual score is 20. A Labour Rights Index score of 100 would indicate that there are no statutory decent work deficits in the areas covered by the database.
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Table 1 |
Labour Rights Index |
| 1/10 Fair Wages (0-100) | |
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1 |
Does the law prescribe minimum wage rates in the country? |
| 2 | Does the law require regular payment of wages? |
| 3 | Does the law require overtime compensation to be at least 125% of the regular hourly rate? |
| 4 | Does the law require additional compensation for working on a weekly rest day? |
| 5 | Does the law require additional compensation for night work? |
| 2/10 Decent Working Hours (0-100) | |
| 1 | Does the law stipulate general working hours as 48 hours or lower? |
| 2 | Does the law restrict maximum working hours, including overtime to 56 hours per week? |
| 3 | Does the law require a weekly rest of at least 24 consecutive hours? |
| 4 | Does the law require paid public holidays? |
| 5 | Does the law require at least three working weeks of paid annual leave? |
| 3/10 Employment Security (0-100) | |
| 1 | Does the law require written employment contracts or at least written employment particulars? |
| 2 | Does the law restrict the hiring of fixed-term contract workers? |
| 3 | Does the law limit the length of the probation period, including renewals to a maximum of 3 months? |
| 4 | Does the law require a 30-day notice before contract termination? |
| 5 | Does the law require severance pay at the rate of at least two weeks of wages for every year of service? |
| 4/10 Family Responsibilities (0-100) | |
| 1 | Does the law require parental leave for parents? |
| 2 | Does the law require at least one week of paid paternity leave for fathers? |
| 3 | Does the law require flexible working arrangements for workers with family responsibilities? |
| 4 | Does the law require paid nursing breaks? |
| 5/10 Maternity at Work (0-100) | |
| 1 | Does the law prohibit inquiring about pregnancy during recruitment? |
| 2 | Does the law require paid maternity leave of at least 14 weeks? |
| 3 | Does the law require cash maternity benefit be at least 66.67% of a worker’s former wage? |
| 4 | Does the law require maternity benefit be paid through contributory social insurance or universal benefits system? |
| 5 | Does the law protect workers from dismissals during or on account of pregnancy? |
| 6/10 Safe Work (0-100) | |
| 1 | Does the law require the provision of free personal protective equipment to workers from the employer, when necessary? |
| 2 | Does the law require the employer to train workers on health and safety issues? |
| 3 | Does the law restrict work that is prejudicial to the health of the mother or the child? |
| 4 | Does the law provide for employment injury or disease benefits? |
| 7/10 Social Security (0-100) | |
| 1 | Does the law provide for the old-age pension? |
| 2 | Does the law provide for dependants’/survivors’ pension? |
| 3 | Does the law provide for unemployment benefits? |
| 4 | Does the law require paid sick leave for the first six months of sickness? |
| 5 | Does the law provide for invalidity benefits? |
| 8/10 Fair Treatment (0-100) | |
| 1 | Does the law prohibit discrimination in employment matters? |
| 2 | Does the law require equal remuneration for men and women workers for work of equal value? |
| 3 | Does the law prohibit sexual harassment in employment? |
| 4 | Does the law allow women to do the same jobs as men? |
| 5 | Does the law guarantee basic labour protections to the gig economy workers? |
| 9/10 Child and Forced Labour (0-100) | |
| 1 | Does the law prohibit employment of children? |
| 2 | Does the law set employment entry age equal to or higher than the compulsory schooling age? |
| 3 | Does the law prohibit the employment of children in hazardous work under the age of 18 years? |
| 4 | Does the law prohibit forced labour? |
| 10/10 Trade Union (0-100) | |
| 1 | Does the law allow workers to form and join unions of their own choice? |
| 2 | Does the law allow workers to bargain collectively with employers through their representative unions? |
| 3 | Does the law provide for the right to strike? |
| 4 | Does the law prohibit employers from terminating employment contracts of striking workers? |
To illustrate the scoring process in the Index, the Netherlands, for example, receives a score of 100 under the indicator of Safe Work. This signifies that the country legally provides a safe working environment to workers. However, under the indicator of Fair Treatment, the Netherlands scores 80 since legislation does not guarantee basic rights for platform (gig) workers.
Scoring along these lines for a country as above, the overall score of the Netherlands is determined by taking the unweighted average of the scores for all 10 indicators on a 0-100 scale, where 0 represents the worst regulatory performance and 100 the best regulatory performance in the labour market. The Netherlands scores 88 overall. For a comparison with other countries, please refer to the scores table at the end of this report.
The labour legislation of the 115 countries, applicable on 1 January 2020, is the source of information used to answer questions in the Labour Rights Index. The Index does not take into account COVID-19 related labour market measures, initiated by countries44. Strengths and limitations exist with this approach (Table 2). While the Labour Rights Index has been designed to be an easily replicable tool to benchmark countries, there are certain advantages and limitations. In order to ensure comparability of data across 115 economies, specific assumptions have been made. The indicators in the Index are based on standardised assumptions to make the laws comparable across countries. For instance, an assumption used for this Index is that the worker in question who is affected by the labour laws has experience of one year or more at a workplace, as questions on annual leave and severance pay can only apply to this kind of worker. Hence, the workers with temporary contracts of a duration less than one year may not have access to such rights.
Another assumption underlying the Index is that the focus is on the labour legislation, which applies to the most populous province/state/area of a country. This allows the Index to give a more accurate depiction of a country’s labour rights as the labour laws affect most of its population, even though the legislation affecting workers in areas with lower populations may be different.
Furthermore, the Index is also based on labour legislation which applies to the formal economy in the private sector. Despite more than 60 per cent of the global workforce in need of transitioning from informal to formal economy45, 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. ILO Recommendation 204 also recommends gradual transition from the informal to the formal economy through enactment of necessary legislation and reduction of barriers for transition. 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. Other than statutes, the Labour Rights Index also takes into account general or inter-professional collective agreements, applicable at the national level. For countries where minimum wages are determined through collective bargaining, sectoral agreements (for major economic sectors) can also be taken into account for responding to questions on compensation for overtime and night work.
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Table 2: Strengths and Limitations of the Labour Rights Index |
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| Feature | Strength | Limitation |
| Standardised assumptions | Makes labour legislation comparable across countries and methodology uncomplicated | Limits legislation under review |
| Focus on workers having one year or more at a workplace | Allows maximum coverage of labour rights | Does not consider the rights of casual and temporary workers. Non-standard workers may not have access to some of the workplace rights and components under the Labour Rights Index |
| Coverage of most populous province/state/area46 | Makes labour legislation comparable across countries where different areas have different labour laws for their populations; Gives a more accurate picture of a country’s labour rights | Can decrease representativeness of labour rights where differences in laws across areas exist |
| Focus on the formal economy | Retains attention on the formal sector where labour laws are more applicable | Does not cover the rights of the workforce in the informal economy, which could have a substantial part of the labour force in some countries |
| Use of codified national labour legislation only47 | Allows actionable indicators since the law can be changed by policymakers | Where lack of implementation of labour legislation, making changes solely in the law will not gain the desired outcome; Does not consider socio-cultural norms |
Moreover, this report acknowledges the presence of gaps between legislation and its practice. For instance, gaps could stem from the lack of implementation of laws because of, either poor enforcement, weak design, or limited capacity. Still, observing differences in legislation helps give a clearer understanding of where labour rights may be limited in practice.
This study also recognises the presence of social, economic and cultural factors affecting the practice of legal rights. For example, women may not be working at night although legally allowed, as social and cultural norms could restrain such options. Poverty-stricken areas may have children under the minimum working age being employed for long hours and not in light work. Workers may be doing overtime exceeding the weekly hour limit because the culture at their organisations may view such workers as harder working and thus more deserving of a reward. The Labour Rights Index 2020 acknowledges the restraints of its standardised assumptions and focus on codified law. Even if these assumptions do not cover all the labour force in the country, they ensure the comparability of data.
Unlike other indices, the Labour Rights Index does not consider ratification of international conventions in its scoring or rating system, since mere ratification is not a good indicator of actual implementation of international labour standards. It uses the standards prescribed in these Conventions (e.g. 14 weeks of maternity leave or minimum age for hazardous work as 18 years) and scores countries on that basis.
All the 10 indicators and 46 evaluation criteria of the Labour Rights Index are grounded in substantive elements of the Decent Work Agenda. The legal basis for all components (regulatory standards) emanates from the UN or ILO Conventions. Tables 3 explains in detail these legal sources.
In summary, the Labour Rights Index methodology has various useful features. The methodology;
- Is transparent and based on facts taken directly from codified laws.
- Uses standardised assumptions for data collection, thereby making logical comparisons across countries.
- Allows data to identify the labour rights and their presence (or lack of) in the legislation of 115 countries.
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Table 3: Labour Rights Index Indicators and ILO Conventions |
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| Indicators and Components | Source of the Regulatory Standard | |
| 1. Fair Wages | ||
| 1 | Minimum wage (statutory or negotiated) | Article 23 of the Universal Declaration of Human Rights; Article 3 of Minimum Wage Fixing Convention 1970 (No. 131); Article 7 of the International Covenant on Economic, Social & Cultural Rights (Fair Wage clauses) |
| 2 | Regular wage | Article 12 of Protection of Wages Convention 1949 (No. 95); Article 11 and 12 of Social Policy (Basic Aims and Standards) Convention 1962 (No. 117) |
| 3 | Overtime premium (≥125%) | Article 6 of Hours of Work (Industry) Convention 1919 (No. 1); Article 7 of the Hours of Work (Commerce and Offices) Convention 1930 (No. 30) |
| 4 | Weekly rest work compensation (time-off) | Article 5 of the Weekly Rest (Industry) Convention, 1921 (No. 14); Article 8(3) of the Weekly Rest (Commerce and Offices) Convention, 1957 (No. 106)48 |
| 5 | Night work premium | Article 8 of Night Work Convention, 1990 (No. 171) |
| 2. Decent Working Hours | ||
| 6 | General working hours (≤48 hours per week) | Article 2 of Hours of Work (Industry) Convention 1919 (No. 1); Article 3 of the Hours of Work (Commerce and Offices) Convention 1930 (No. 30); Article 1 of the Forty-Hour Week Convention, 1935 (No. 47) |
| 7 | Maximum working hours (≤56 hours per week) | Para 17 of the Reduction of Hours of Work Recommendation, 1962 (No. 116); Article 6(2) of Hours of Work (Industry) Convention 1919 (No. 1); Article 7(3) of the Hours of Work (Commerce and Offices) Convention 1930 (No. 30) |
| 8 | Weekly rest (≥24 hours) | Articles 3-6 of Hours of Work (Industry) Convention 1919 (No. 1); Article 2 of Weekly Rest (Industry) Convention 1921; Article 6 of Weekly Rest (Commerce and Offices) Convention 1957 |
| 9 | Paid public holidays | Article 5 of Working Conditions (Hotels and Restaurants) Convention 1991 (No. 172); Article 6 of Holidays with Pay Convention (Revised) 1970 (No. 132); Article 7 of the Part-Time Work Convention, 1994 (No. 175) |
| 10 | Annual leave (≥3 working weeks) | Article 3 of Holidays with Pay Convention (Revised) 1970 (No. 132) |
| 3. Employment Security | ||
| 11 | Written employment contract | Articles 7-8 of the Domestic Workers Convention, 2011 (No. 189); Part II of the Private Employment Agencies Recommendation, 1997 (No. 188) |
| 12 | Fixed term contract (≤5 years) | Article 2(3) of the Termination of Employment Convention 1982 (No. 158); Article 3(2) of the Termination of Employment Recommendation, 1982 (No. 166) |
| 13 | Probation period (≤3 months) | Article 2 of the Termination of Employment Convention 1982 (No. 158) |
| 14 | Termination notice period (1 month) | Article 11 of the Termination of Employment Convention 1982 (No. 158) |
| 15 | Severance pay (≥14 days per year of service) | Article 12 of the Termination of Employment Convention 1982 (No. 158) |
| 4. Family Responsibilities | ||
| 16 | Parental leave | Article 1 of the Workers with Family Responsibilities Convention, 1981 (No. 156); Paragraph 22 of the Workers with Family Responsibilities Recommendation, 1981 (No. 165); Paragraph 10 of the Maternity Protection Recommendation, 2000 (No. 191) |
| 17 | Paternity leave (≥1 week) | 2009 ILC Resolution Concerning Gender Equality at the Heart of Decent Work |
| 18 | Flexible working arrangements | Article 1 of the Workers with Family Responsibilities Convention, 1981 (No. 156); Paragraph 18 of the Workers with Family Responsibilities Recommendation, 1981 (No. 165); Article 9(2) of the Part-Time Work Convention, 1994 (No. 175) |
| 19 | Nursing breaks | Article 10 of the Maternity Protection Convention, 2000 (No. 183) |
| 5. Maternity at Work | ||
| 20 | Prohibition on inquiring about pregnancy | Article 9 of the Maternity Protection Convention, 2000 (No. 183) |
| 21 | Maternity leave (≥14 weeks) | Article 4 of the Maternity Protection Convention, 2000 (No. 183); Article 11 of UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) |
| 22 | Cash maternity benefits (≥66.67% of former wage) | Article 6 of the Maternity Protection Convention, 2000 (No. 183) |
| 23 | Source of maternity benefits (social insurance or state financing) | Article 6(7) of the Maternity Protection Convention, 2000 (No. 183) |
| 24 | Protection from dismissals (pregnancy/maternity) | Article 8 of the Maternity Protection Convention, 2000 (No. 183); Article 11 of UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) |
| 6. Safe Work | ||
| 25 | Personal protective equipment (free of cost) | Article 16 and 21 of the Occupational Safety and Health Convention, 1981 (No. 155) |
| 26 | Training on health and safety | Article 19(d) of the Occupational Safety and Health Convention, 1981 (No. 155) |
| 27 | Restriction on work (prejudicial to health of mother or child) | Article 3 of the Maternity Protection Convention, 2000 (No. 183) |
| 28 | Employment injury benefits | Part VI of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 7. Social Security | ||
| 29 | Old age pension | Part V of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 30 | Survivors’ pension | Part X of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 31 | Unemployment benefits | Part IV of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 32 | Sickness benefits (≥ 6 months) | Part III of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 33 | Invalidity benefits | Part IX of the Social Security (Minimum Standards) Convention, 1952 (No. 102) |
| 8. Fair Treatment | ||
| 34 | Prohibition of employment discrimination | Article 2 of the Discrimination (Employment and Occupation) Convention, 1958 (No. 111); Article 8 and 9 of the Maternity Protection Convention, 2000 (No. 183); Article 4 of the Vocational Rehabilitation and Employment (Disabled Persons) Convention, 1983 (No. 159); Article 1 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98); Article 5 and 27 of the Convention on the Rights of Persons with Disabilities |
| 35 | Equal remuneration for work of equal value | Article 2 of the Equal Remuneration Convention, 1951 (No. 100) |
| 36 | Prohibition of sexual harassment | Article 7 of the Violence and Harassment Convention, 2019 (No. 190) |
| 37 | Absence of restrictions on women’s employment | Article 2 of the Discrimination (Employment and Occupation) Convention, 1958 (No. 111) |
| 38 | Basic labour protections for gig workers | Global Commission on the Future of Work 201949; Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), 2017 |
| 9. Child and Forced Labour | ||
| 39 | Prohibition on child labour (<15 years) | Article 2 of Minimum Age Convention 1973 (No. 138); Article 32 of the Convention on Rights of Child |
| 40 | Age (employment entry ≥ compulsory schooling) | Article 2(3) of Minimum Age Convention 1973 (No. 138) |
| 41 | Prohibition on hazardous work for under 18 | Article 3 of Minimum Age Convention 1973 (No. 138) |
| 42 | Prohibition on forced labour | Article 2 of the Forced Labour Convention, 1930 (No. 29); Protocol of 2014 to the Forced Labour Convention, 1930; Article 8 of the International Covenant on Civil and Political Rights |
| 10. Trade Union | ||
| 43 | Right to unionise | Article 2 of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) |
| 44 | Right to collective bargaining | Article 4 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), Article 2 of the Collective Bargaining Convention, 1981 (No. 154) |
| 45 | Right to strike | Para 751, Compilation of decisions of the Committee on Freedom of Association, 2018 |
| 46 | Prohibition on replacing striking workers | Article 1 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98) |
WEIGHTS
The Labour Rights Index does not use weights. Each indicator features either four or five underlying components framed as questions. Every component contributes equally to the indicator and every indicator contributes equally to the overall score. The overall score (from 0-100) is calculated from a simple unweighted average of scores from 10 indicators.
As pointed out at the outset, the indicators and components of the Labour Rights Index cover the employment lifecycle of a person. Consider the example of annual leave and sick leave. While annual leave is accessed by a greater percentage of workers every year compared with sick leave, giving them weights (whether equal or unequal) would be arbitrary and would not serve the purpose.
Similarly, consider the example of child labour and forced labour questions. While the majority of workers may not have to experience these menaces, it is a harsh reality for many, at least in developing countries. Giving weights would mean prioritizing one component over the other.
Countries at different stages of development may also have different legal provisions. For example, as is evident throughout the study, work-life balance and gender equality related legislation is also linked with economic development. With certain exceptions, mostly high-income countries have instituted provisions on paternity leave and parental leave. If these components are given higher weightage than the other, developing countries’ scores will be comparatively much lower.
Greater weightage to certain areas of labour law can create an inherent bias and also lead to the agents’ skewed efforts to initiate reforms in areas with higher weights. Countries will inherently target laws with greater weightage.
If giving weights would be an option, fundamental principles and rights at work would be given higher weights. These are freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation. However, the ILO has also started giving importance to other workplace rights. The 2019 Declaration notes that “all workers should enjoy adequate protection in accordance with the Decent Work Agenda, taking into account:
- respect for their fundamental rights;
- an adequate minimum wage, statutory or negotiated;
- maximum limits on working time; and
- safety and health at work.”
Similarly, social protection, or social security (both terms are used interchangeably), is enshrined as such in the Universal Declaration of Human Rights (1948) and the International Covenant on Economic, Social and Cultural Rights (1966). ILO Recommendation 202 suggests that member States should establish and maintain national social protection floors as a nationally defined set of basic social security guarantees which secure protection aimed at preventing or alleviating poverty, vulnerability and social exclusion.
Hence, instead of preferring one component or indicator over the other, the Labour Rights Index has been developed without assigning weights.
RANKING
Similarly, the Labour Rights Index does not “rank” countries.
The ordinal ranking method (for example, “first”, “second” and “third”) is problematic as it leads to naming and shaming of countries at the bottom of the list. Moreover, as argued by the Doing Business Report 2016, rankings may encourage the agents (being ranked) to “game the system”.50 There is a risk that the agents may divert a disproportionate amount of resources and efforts to the areas which are measured/scored, while leaving aside areas which are equally important but not scored. To deal with this issue, the Labour Rights Index does not use ordinal ranking, although it covers the whole gamut of labour rights.
The Index does not aim at producing a single number in the form of ranking. Rather it gives a run down on the local labour legislation, supported by detailed Decent Work Checks, updated annually.
The Labour Rights Index however does place 115 countries into 6 categories and rates these from “Decent Work” to “Total Lack of Decent Work”.51