Informal employment in Europe: No legal or social protection for the worker

Zero-hour contracts, or informal employment, keep the employee vulnerable, and the rate in Europe remains high in several countries.

Informal employment lacks legal and social protection for the worker

Informal employment refers to work without a contract, legal protection or social security, and opens the worker up to potential problems. 

According to the International Labour Organisation, in 2023, 58% of the global workforce is engaged in informal employment; removing agricultural workers, the figure then drops to 50%.

Informal employment in Europe is lower than the global average

In Europe, informal employment accounted for 1 in 5 workers, and while it is lower than the global average, a considerable number of workers in European countries still work under zero-hour or “casual” contracts. 

According to the International Labour Organisation’s dataset for 2023, Hungary and Poland hold the highest rates of informal employment among EU countries, with 17.8 per cent and 9.8 per cent, respectively. 

For context, in other EU member states informal employment is much less prevalent, with rates falling below 2 per cent in a third of EU countries.

Malta recorded the lowest informal employment rate at 0.7 per cent, followed by Slovenia at 1 per cent, and Belgium and Bulgaria both at 1.3 per cent.

Spain‘s informal employment rate, according to the International Labour Organisation dataset, is at 2.6 per cent.

Zero-hour contracts remain prevalent in the UK

The UK’s informal employment rate for 2018, the last recorded dataset, stands at 6.5 per cent, the highest rate among Europe’s top five economies. 

Professor Mihails Hazans, who has extensively researched informal work across the continent, attributes this to the fact that “a written contract is not required in the UK”, which can increase the rate of informal work, in addition to the gig economy, which is based on flexible, temporary or freelance jobs often lacking formal contracts.

Referring to the European Social Survey data set, the professor from the University of Latvia found that the UK’s rate of informal employment is actually higher than the International Labour Organisation’s (ILO) estimate.

Compared to the ILO’s recorded data, the informal employment rate in the UK, in 2018, was 8.5 per cent; this rate then increased to 13.3 per cent in 2022, before declining to 8.9 per cent in 2023.

Across Europe, Professor Hazans attributes the rate of informal contracts to social norms, traditions, and legislation which are key factors contributing to the disparities in informal employment across Europe.