Moonlighting in Montenegro

Three Times Illegal

Nearly 40 percent of workers employed in the private trade, catering and civil engineering sectors in Montenegro work illegally.

AIM Podgorica, December 14, 2000

Recently, the Centre for the Development of Industrial Democracy in cooperation with the Alliance of Independent Trade Unions of Montenegro carried out a survey on labour-legal and social status of employees of the so called small-scale private sector. The sample covered 700 workers from trade, catering and civil engineering firms in eight Montenegrin communes. The authors of the survey selected these branches because the largest number of private enterprises operates in these sectors.

In the course of past year there were 15,244 small-scale enterprises in Montenegro, out of which 11,370 were active. (Active enterprises are considered those which carried out financial transactions through their gyro accounts in the course of the last two months.) The majority of these enterprises operate in trade sector - 45.07 percent of the total number, 13.34 percent in catering and tourism, and 19.2 percent in transportation, etc.

However, a large number of newly-established enterprises did not result in higher employment. The number of unemployed in Montenegro is still very high and represents one of the gravest economic and social problems. In the last couple of decades the total number of unemployed in Montenegro has been constantly growing, while the number of employed has been radically decreasing. According to the official 1990 data the number of employed workers in Montenegro fell from 165 thousand to 115 thousand, while at the same time the number of unemployed increased from 58 thousand to over 80 thousand.

This average is higher in some communes in the north of Montenegro, which are worst affected by unemployment. In Berane, Rozaje and Bijelo Polje the number of unemployed is higher than the number of those who are working. The overall ratio of unemployed persons to employed workers is 70.3 in Montenegro as a whole, while in the commune of Berane it is 134, in Bijelo Polje - 125, Mojkovac - 156, Plav - 125, etc. This ratio is much more favourable in Podgorica - 59.5, in Niksic - 79, etc.

Naturally, the official data do not reflect the actual situation since much higher number of employed persons are unregistered. Moonlighting (illegal work, actual work - labour relation, informal work) relates to the work which a person carries out for an employer, but without legal basis, i.e. illegally, or carries out prohibited work, while the term grey economy relates economic activities which are not in line with or are contrary to legal regulations. OECD defines grey economy as illegal unregistered production, while according to the International Labour Organisation (ILO) grey economy is informal sector which is characteristic for all developing and countries in transition and implies very small production, service or distribution units in urban centres of developing countries.

They often employ only family members. These small enterprises and workshops are called informal sector because they are not registered with the authorities and are not included in the national statistical data. They generally either have no or very limited access to organised market, credit institutions, professional training services and other public institutions. These are mostly unregistered activities and illegal facilities, and even when they operate in accordance with certain regulations, they are always outside the scope of labour or social security legislation. Trade unions and employers organisations never include producers and workers from the informal sector (grey economy).

Assessments of the number of unregistered employed persons in Montenegro vary. Estimates of the Employment Office of Montenegro, for example, mention some 64 thousand unregistered jobs in Montenegro. According to these estimates out of the total number of 15 to 20 thousand workers who are, more or less, on forced vacations, some 4 thousand are moonlighting. Also, out of over 80 thousand unemployed, some 30 percent work illegally. According to this Office, some 10 percent of pensioners, as well as 25 percent of the total number of 25 thousand refugees are engaged in these unregistered activities. On the other hand, experts from the Faculty of the Economy in Podgorica say that the labour force employed in the informal sector amount to as many as 85 thousand people. According to these estimates, this year the share of unregistered jobs in the total labour force has reached 31 percent.

However, the survey of the Centre for the Development of Industrial Democracy shows that as many as 38.59 percent of workers employed in catering, trade and civil engineering sectors are working off the books. Also, almost one third of them keep working like this for over two years. There are many more illegally employed women (35.32 percent of interviewees), than man (4.23 percent), and the majority are either very young or very old workers. Among the young ones which make over one half of the interviewees, some 43.26 percent are working illegally, while every interviewee over 55 years of age is unregistered.

It is interesting that the majority of workers in private trade, catering and civil engineering sectors (44.23 percent) are paid between DM 100 and 200 and that, in contrast to those working in the social sector, they receive their wages regularly. However, a vast majority of interviewees (between 70 and 90 percent) do not get meal, transportation or holiday allowances. Also, working hours in this sector are longer than the law proscribes. The majority of interviewees (83 percent) do not have two days off a week, and 63 percent of them never take paid vacations.

Despite everything, the majority - i.e. more than 60 percent of interviewees, are satisfied with their work and as many as 85 percent of them consider that they are treated very well or, simply, well by their employer. According to pollsters such answers rather point to their fear of employers than reflect their honest opinion of their benefaction and care for their workers. Because, asked where is it better to work today in Montenegro, choosing between private employers, transformed social enterprises, public enterprises or institutions, the majority still prefers working for state authorities.

This survey should make it possible for Montenegrin Trade Unions to more seriously work on attracting privately employed workers to their membership. In addition, the pollsters hope that this will enable the launching of new initiatives for the integration of the existing informal sector into the legal economic sector. The plan is for this survey to encourage social dialogue needed for the establishment of a new strategy of active employment policy and specific employment programme, as well as for the resolution of problems of grey economy and moonlighting in Montenegro. According to survey investigators, that implies better functioning of all institutions of the labour market, especially by creating a system of flexible employment, changing of tax and education systems and their coordination with the requirements of technological development and needs of the enterprise sector through programmes of vocational orientation including re-training and additional training, professional specialisation of labour force and financing of self-employment.

Dragan DJURIC

(AIM)