Uruguay: promoting decent work and social inclusion through ratifying and implementing Convention 181

Uruguay is among the first countries in South America to ratify the ILO’s Private Employment Agencies Convention C181 in 2004. Implementation has been done through, for instance:

• defining the categories of workers and types of services for which private employment agencies may charge a fee under specific circumstances,
• improving mechanisms concerning the application of sanctions to private employment agencies engaged in fraudulent practices and abuses, particularly with regard to migrant workers,
• and promoting cooperation between public and private employment agencies and compiling and disseminating data.

The ratification and implementation helped Uruguay shape a fairer and more transparent labour market for workers to realise their full potential, create a conducive environment for private employment agencies, and build social cohesion. 

Over the past decades, the labour market in Uruguay has witnessed enormous positive changes after the financial crisis in 2002. More job opportunities are generated, private employment agencies are regulated, the standard of protection of workers’ rights is established, the right to work is ensured, and social protection is strengthened.

This overall positive labour market performance also facilitates the implementation of policies to address challenges such as the demographic trend of an aging population, persistent skill mismatches between demand and supply of labour; and segregation in employment, with young people (aged 15–25) at disadvantage.

Promoting decent jobs for inclusive employment

Uruguay’s ratification of C181 represents the starting point for developing an adequate regulatory framework for the employment and recruiting industries. This acknowledgement of the role of private employment agencies is an important step for a country to adapt to the changing dynamics of the current world and to promote decent jobs, while also protecting the workers that use these services.

Mr. Daniel Pérez, National Employment Director of the Ministry of Labour and Social Security, explains that the cooperation between public employment services and private employment agencies helps "share and disseminate information and address employment with proper terminology to improve transparency and the functioning of the labour market, promote joint projects for vocational training, and exchange vacancy announcements for workers and enterprises that could favour job-placement, income, entry, and even mobility in the labour market".

The implementation of C181, together with other conducive labour market policies, contributed to the unemployment rate falling from a maximum of 17% in 2002 to 9.3% in 2015.

Moreover, private employment agencies offer critical support to employers and workers in adapting to severe socio economic crises like the pandemic in Uruguay. With these positive mediations from both public and private actors, the labour market experienced an "accentuated recovery process from the job crisis" in 2021, as Pablo Mieres, Uruguay’s Minister of Labour and Social Security highlighted.

A tripartite advisory approach to ensure fair recruitment

As part of the efforts to promote fair recruitment in connection with Convention 181 in Uruguay, a tripartite advisory commission of relevant stakeholders composed of representatives from the Ministry of Labour and members from the major associations of workers and employers has been established. The commission meets regularly to follow up on the application of the Convention's provisions. Such social dialogues have promoted transparency and social cohesion in the labour market.

Easier registration, better licensing, more effective regulation

The number of agencies that have registered within the Ministry of Labor and Social Security in Uruguay has increased. In addition, the number of workers hired through or within the agencies has been growing. The Ministry is also considering launching campaigns to increase the number of registered agencies and aim for 100% coverage.

The government has the duty to register, authorise, collect information, and control private agencies. In cases of breach of the conditions to operate, an inspection takes place, and sanctions can be imposed according to law. Contacted agencies that operate without the proper registration will be guided through the registration process.

Under the law, all private employment agencies must register and repeat a reporting procedure once a year. C181 lays the foundation for a modernized approach to align existing practices with the realities of today's labour markets. In Uruguay, with the support of the ILO, it is materializing by way of a computerized employment registry, easing agency registration as well as acting as a smart portal that collects reports.

Joining hands with ILO to embrace challenges and promote decent work

While C181 has brought positive changes to the labour market, some challenges remain. There is a need to demand guarantees from the registered employment agencies since there may be agencies that compete under unequal or unfair conditions in terms of formality. ILO has been working in tandem with Uruguay to mitigate any tensions that might arise.

The implementation of C181 removes barriers to job opportunities. It enhances the joint action with public employment services to propel a human-centered job recovery in the unexpected socioeconomic crisis. The right to negotiate is respected and represented. The regulatory framework of registration and licensing helps ensure employers compete in a fair environment.

To learn more about the Conventions, the ratification, and supports to member States, please read more at ILO Employment Services Portal and/or contact employmentservices@ilo.org. 

References:

• ILO, (2015). Public Employment Services in Latin America and the Caribbean, Uruguay. Available at: https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_policy/---cepol/documents/publication/wcms_426617.pdf   
• Convention No. 181: Uruguay – CEACR, observation, 2010.
• ILC. (2014), 103/V/1. International Labour Conference, 103rd Session, Report V(1). Transitioning from the informal to the formal economy
• ILO, (2014). Notes on Formalization. Reduction of informal employment in Uruguay: policies and outcomes. Regional Office for Latin America and the Caribbean.
• ILO, (2022). ILOSTAT: https://ilostat.ilo.org/data/
• ILO, (2018). Women and Men in the Informal Economy: A Statistical Picture (third edition). Geneva.
• ILO, (2022). Technical tripartite webinar for the ratification campaign of ILO Conventions on Employment Service, and Private Employment Agencies.
• ILO, (nd). State of Skills: Uruguay
• Merco Press, (2022), Employment grows in Uruguay after pandemic lull
• Torres, J. L., & McKenzie, S. (2020). Youth Unemployment in Uruguay. Available at SSRN 3772486. (IMF Working Paper)
• Van Haasteren, F. C. (2017). Decent Flexibility: ILO-Convention 181 and the Regulation of Agency Work. Kluwer Law International BV.
• CEACR. (2015): Individual observation concerning Private Employment Agencies Convention, 1997 (No. 181), Uruguay (ratification: 2004). Available at: http://www.ilo.org/dyn/normlex/en/f?p=1000:13100:0::NO:13100:P13100_COMMENT_ ID:3186572 [Oct. 2015].