Blurring boundaries: informal practices in formal employment in Ireland

• Published date: 01 July 2018
• Date: 01 July 2018
• Author: Alicja Bobek,James Wickham
• DOI: http://doi.org/10.1111/irj.12225

Blurring boundaries: informal practices in

formal employment in Ireland

Alicja Bobek and James Wickham

ABSTRACT

Formal and informal employment have traditionally been perceived as separate. This

division usually has a social, geographical and temporal character. However, it has

also been argued that formal and informal economic practices are not necessarily

distinctive and often coexist within the same spaces, firms or even jobs. This article

explores the blurring boundaries between formal and informal work. By using

examples from four sectors of the Irish economy, we demonstrate how some

employers ‘informalise’working conditions of their formal employees. As we show,

such informalisation is mainly focused on cutting employment costs and setting

earnings below the minimum wage. This has resulted in a further erosion of the

formal–informal division in some sectors of Ireland’s post-recession labour market.

1 INTRODUCTION

There is no surprise that employers need, and will, aim to cut their costs, especially at

times of crisis. While some manufacturing production can be shifted offshore in order

to achieve cuts, most of services as well as place-specific activities (e.g. construction)

must remain onshore (Freeman and Ogelman, 2000: 117). In such cases, cuts may

be made by reducing the costs of employment. This can be performed through redun-

dancies or through lowering wages; some employers may also start to engage irregu-

lar workers to save on taxation and social security payments.

The latter strategy can be associated with either casualisation or informalisation of the

employment relationship. The former takes place when formal jobs become informalised

while the latter involves different types of practices hidden from authorities, for example,

tax evasion or envelope payments (e.g. De Stafano, 2016; Williams, 2009). Quite impor-

tantly, as we demonstrate in this article, such forms of employment coexist with formal

employment and are often place within formalised businesses and organisations.

Traditionally, informal jobs were found at the bottom of the highly developed

countries labour markets. They were the ‘bad’,‘3D’jobs: dirty, demanding and dan-

gerous (Dickens and Lang, 1988). Within the dual labour market theory framework,

such jobs were not only poorly paid but also lacked clear career prospects and had a

lower social standing (Piore, 1979). Their irregular status has also been often associ-

ated with migrant work and can be further linked with the migrant division of labour

or so-called superdiversity (e.g. Ram et al., 2017a; Vertovec, 2007; Wills et al., 2009).

❒Alicja Bobek, Trinity College Dublin, Ireland and James Wickham, Trinity College Dublin, Ireland.

Correspondence should be addressed to: Alicja Bobek, Department of Geography, Trinity College

Dublin, Ireland; email: bobeka@tcd.ie

Industrial Relations Journal 49:4, 336–351

ISSN 0019-8692

© 2018 Brian Towers (BRITOW) and John Wiley & Sons Ltd

In this article, we use theexample of changing employment relationships in different

labour market sectors during and after the recession in Ireland in order to demonstrate

possible patterns of jobs informalisation and casualisation. As we demonstrate both

informalisation and casualisation of employment could be observed in Ireland over

the past few years, while the actual reduction of jobs (with some exceptions) did not

occur on a massive scale.

1

Instead, more peopleare now employed on a part-time basis

or have flexible contracts, more workers are taken on as subcontractors and new

entrants are frequently being forced to go through extensive periods of low-paid

internships and training schemes. Although not straightforwardly irregular, these types

of work lie in-between formal and informal: they operate within the regulatory framework,

but the framework itself is often bent or silently violated. The boundaries are thus blurring:

regular jobs are not so regular anymore. As we will argue in this article, with the ongoing

informalisation of working conditions, many of the jobs located in the formal economy

now have features that are usually associated with irregular employment.

This article is basedon the Working Conditions in Irelandproject

2

,whichinvestigated

how jobs have been changing in Ireland from the boom through the crisis and into a

possible recovery. The study involved the analysis of existing statistical data and

interviews with experts; central to the study were qualitative interviews withindividuals

employed in four sectors: construction, hospitality, financial services and information

and communication technology (ICT). Construction and hospitality were chosen as

examples of ‘bad job’sectors; the number of people employed in these sectors also fell

during the recession. Financial services and ICT, on the other hand, are traditionally

understood as ‘good job’, higher-skilled sectors. While the financial sector was affected

by the economic crash, ICT actually continued to grow despite the overall downturn.

The article is organised as follows. We first discuss the theoretical framework of the

analysis, including the discussion of boundaries between formal and informal work.

The second section of the article focuses on the Irish labour market. By using exam-

ples from construction, hospitality, ICT and finance, we explore the blurring bound-

ary between formal and informal work. Three types of employment are analysed in

detail: casual (flexible hours) contracts, bogus self-employed and low-paid internships

and training schemes.

2 FORMAL AND INFORMAL WORK: BLURRING BOUNDARIES

Within Western societies, the informal economy and informal employment are often

defined in opposition to the legally regulated formal sector (Harding and Jenkins,

1989). Furthermore, the informal economy is also perceived as a separate system,

which is not part of activities either governed by the state or run by big corporations

and therefore tends to be attributed to those located at the margins, or outside of

highly developed societies (e.g. Slavnić, 2010).

These divisions also have a spatial and social character. In geographical terms, the clas-

sical dual economy approach draws global as well as regional and intra-urban divisions

(Williams, 2009). It is assumed that the informal economy dominates in the developing

countries and in poorer regions of the highly developed parts of the world. For example,

1

For example, while the economic downturn resulted in massive reduction of persons employed in the Irish

construction industry, employment levels in other sectors, such as hospitality, finance or ICT remained rel-

atively stable throughout the recession.

2

‘This study was conducted in TASC: Think-tank for Action on Social Change' and funded by FEPS:

Foundation for European Progressive Studies.’

337Blurring boundaries

© 2018 Brian Towers (BRITOW) and John Wiley & Sons Ltd