Casual Workers and the Necessity to Organize

Monday, November 3, 2014 - 05:48

The Center for Trade Union and Workers Services "CTUWS" organized on 30th October 2014 a roundtable discussion under the title "Casual Workers' Sector .. Problems and Solutions" for tens of the representatives of the independent trade unions which were established during the past few years in the casual workers sector. They included the trade unions for street vendors, contracts, constructions and wood industries, drivers and recruitment companies.

The CTUWS presented an initial working paper which handled in particular the problems of insurance coverage for casual/seasonal workers and treatment of the marginalization of millions of casual workers in these sectors who work outside the legal structures and the current formal economic and social systems. Such marginalization establishes a very serious condition for the stability of the Egyptian society and its ability to be balanced and achieve progress. The paper indicated as well that the failure of these millions to integrate with the existing structures and systems refers to deficiencies in these economic, social and legal systems and to the dire need for developing them in order to cope with the actual changes of the socioeconomic activities on the ground and the actual needs of those people who live on this ground.

The paper referred also to the circle of casual work in Egypt through the last two decades which widened to include bigger numbers of workers diversified industrial sectors. Labour structures changed considerably step by step through the last two decades to the extent that casual labour is estimated to represent three quarters of the Egyptian labour force. It is difficult, in this respect, to rely on official statistics or accurate scientific standards as long as we are outside the organized frameworks. However, one can see with one's own eyes this phenomena, which is widespread and has deep social effects, by observing the large scale marginalized sectors which exist outside the organized economic and social frameworks.

Casual (or seasonal) workers are found mainly in several principal sectors such as the contracting sector which includes building and construction workers and allied crafts. Street vendors, seasonal agricultural workers in addition to small and micro enterprises and the so called "staircase industries". These sectors represent about 40% of the national economy and employs 8 million workers according to the most modest estimations. Official statistics exclude other sectors which cannot be overlooked such as land transport in particular (a considerable part of which is still informal), mines and quarries (in Shak el Te'baan and Minia) and a part of the workers in the formal (private) economic sector particularly tourism and oil industries and services. Most of the workers in these sectors are casual (seasonal and non registered) workers in the full sense of the term.

The round table relied on presentations made by representatives of the trade unions on the main problems facing the workers of each of the participating categories. Street vendors presented the problems which faced them during the past period. Their main problems are summed up in the following:

• The necessity to confront the media campaign launched by the executive authority which shows street vendors as outlaws and groups of thugs merely because they call for fixed locations for them and defend their sustenance.
• The necessity to accelerate organizing about 3 million street vendors throughout Egypt in trade unions to represent them and defend their causes. This would be a step to establish an Egyptian professional federation for street vendors which can sit with the concerned bodies and negotiate on their problems.
• The necessity to propose solutions for the problem of providing specific locations for street vendors, sit down with the officials to discuss them and reach radical solutions. The participants who representing street vendors in Greater Cairo emphasized that there are several public spaces which can be subject to negotiation in lieu of the places which the officials propose but the street vendors refuse because they are far from populated areas.
• The necessity to prepare a legal form to provide insurance coverage for street vendors.

Representatives of several independent trade unions for workers in the contracting, building, construction, fisheries and land transport workers indicated that workers in building, construction and allied industries represent the vast majority of casual workers in Egypt. Their main problem is to have an insurance system which avoids the shortcomings in the current system. A special insurance system was developed for some categories of casual workers. According to a suggestion by the Social Insurances Organization at its session held on 9/10/1988 the Minister of Insurances issued the decision No. 74 for the year 1988 concerning the workers in contracting, quarries and salt marshes workers.

Then the Minister of Finance issued the decision No. 554 for the year 2007. Chapter 7 of that decision concerned waged workers. It covered workers in the above mentioned three sectors in addition to workers in building and constructions.

Finally, the Minister of Finance issued the decision No. 517 for the year 2009 amending some provisions of the previous decision to include oil and land transport workers to the list of beneficiaries.

It can be said that this system transcends the direct labour relationship between the insured (personally) and the employer. Instead, it establishes a collective virtual relationship between employers who are the contractors or owners of quarries and salt marshes on one hand and the (casual) workers of these sectors on the other hand. The value of insurance subscription is estimated at a virtual salary. The subscription is paid by each party separately and according to completely different mechanisms.

This system led only to the accumulation of the funds resources by the equivalent of 74 billion Egyptian Pounds whereas the workers remained without insurance coverage for the following reasons:
• The system was applied as if its main objective was to collect money not to provide insurance coverage for the casual workers. The employers' share is collected in the same manner of collecting taxes. It is deducted from their invoices by the cut-off system. In case the employers fail to pay their contributions their final invoices are withheld. In addition, salaries are calculated according to the size of the contract or the rental value of the quarry or salt marches. This method is very much similar to the method of tax collection.
• The government was very much keen to collect the employers' share separate from the workers themselves. But it did not activate the mechanisms which are supposed to be used at the other party of the system (the insured). According to the regular system. the worker has to go to the concerned insurance office and apply to be registered in the records of the Ministry of Manpower to obtain a Skills Certificate according to which his insurance salary is calculated. Then the worker has to go to the concerned insurance office for medical examination to determine his ability to practice the required profession.
• When the worker is insured, he is supposed to pay his contribution monthly. If he fails to pay his contribution for one month he will be considered as unemployed for that month and it will be deducted from his insurance period.
What happens on the ground is that the insurance offices do not have any mechanisms to complete this process. Many of the insurance offices employees do not have any idea about the system to the extent that they ask the worker to pay his contribution as well as that of the employer!

Moreover, it is difficult for the workers to recognize the system individually. They even do not know their insurance rights. And because they do nottrust the government bodies, they consider any money collected from them as lost money. So they do not apply for social insurance registration.

The participants reached a consensus that the main problems of millions of casual workers are social insurance and health insurance. In addition, there are special problems for each category of these workers which ought to be discusses in separate workshops in order to reach radical solutions by their representatives.

The participants called for societal dialogue regarding developing social protection and insurance coverage for casual workers through an integrated legal structure. Their recommendations included composing a general central committee from all the social parties. The government (the Ministry of Manpower and the Ministry of Insurances) and the representatives of the employers, the trade unions and the organizations representing casual workers. The Committee will:
- Make inventory for the workers who became unable to work and develop a system to provide them with monthly pensions from the money accumulated in the Fund regardless of whether they had previous contributions or not (i.e. consider their contribution as virtual).
- Develop mechanisms jointly with trade unions and labour organizations to register casual workers at the Labour Offices and the Social Insurance Offices and regulate their contributions in the insurance fund.
- Re-estimate the salaries' value and the contribution percentage to be paid monthly according to a new actuarial account that takes into consideration the interests of the insured and their right to social protection instead of accumulating money in insurance funds without benefitting from them.

The participants agreed to form a permanent body comprising all the concerned sectors capable of negotiating on all the problems of the casual workers sectors.

Center for Trade Union and Workers Services
3rd November 2014