The majority of the world’s workers are engaged in informal employment, resulting in low and unstable income, the weakening of labour rights, and limited access to social protection that disproportionally affect women, migrants, and young workers. Rather than treating informality as a marginal issue, the policy profile recognises the systemic underpinnings of informal work and proposes a labour formalisation strategy through a combination of policies designed to include all workers. A comprehensive approach, with effective incentive, compliance and enforcement measures is proposed, in line with ILO Recommendation No. 204. These include tackling undeclared work and stepping up labour inspection, legal recognition and extension of labour rights, universal and inclusive social protection, strengthening and guaranteeing freedom of association and collective bargaining, and creating pathways to formal work. The policy profile highlights existing examples in Brazil, Uruguay, South Africa and India driven where trade union advocacy and social dialogue succeeded in expanding social protection and labour rights to informal workers. It proposes a gradual, rights-based process supported by international standards such as the International Labour Organization Recommendation Transition from the Informal to the Formal Economy (No. 204). By prioritising worker protection, income security, and workers’ voices, labour formalisation is an important component within the broader strategy for reducing poverty and inequality by advancing fundamental rights for all workers.
