In the wake of increased flexibility of the labour market, there has been an increase of dependent and independent home-based workers, which has led ILO to adopt the 1996 Home Work Convention that covers specifically the dependent home-based workers, called homeworkers. The Convention calls for improving statistics on homeworkers This has significant implications for statistical definitions and concepts. Statistics concerning this kind of employment are very scarce, and no broad consensus exists as to its suitable definition and its place in the classification structure, as homeworkers exhibit simultaneously characteristics of paid employees and of self-employed. The present paper takes up these issues relating to relevant definitions and classifications:

Homeworkers (dependent) are workers with the following characteristics: (1) they work at home outside the establishment that buys their products, either goods or services; (2) they agree by prior arrangement to supply goods or services to a particular enterprise; (3) their remuneration consists in the prices paid for their products and (4) they do not employ workers on a regular basis. They may or may not contribute tools, equipment and other material inputs. These workers should be classified in a separate group called "homeworkers" different from "employees" and "own-account workers". (Experiences in Indonesia show that home should be defined broadly and include places near the residential areas of homeworkers such that they can still perform their domestic work.)

Independent home-based workers are those who work at their home and deliver their products or services to any prospective buyer. Their characteristics are those of the self-employed and they should be classified as part of the group "own-account workers".

The present situation in the labour market is characterized by many employment situations which are intermediate to the classical dichotomy of "paid employment" and "self-employment". According to a recent publication, workers "... fall along a continuum of possible labour relationships from full-time employees to casual employees, to dependent workers to semi-dependent workers, to self-employed or fully independent workers". And specifically that "homeworkers... represent a fundamental challenge to the inherent dualism of labour law".This also challenges the application of the classification of the International Classification of Status in Employment (ICSE).

Entrepreneurs can change to relevant line of production which do not receive large capital in terms of buildings, machinery an all the costs related to it. However, there are no available statistics to document this trend as the category of "homeworkers" is not present in the relevant classification. For example, in Indonesia the number of homeworkers is significant, but "a separate measure of them is lacking because there is no question in the surveys identifying homeworkers as a separate category for enumeration", they are subsumed into salaried or own account workers. (Ushaimi)

Though it is difficult to follow the development of this specific category of workers, some figures are available on home-based workers which shed light on their importance: in Bostwana 77% of enterprises are located in households, in Kenya 32%, in Lesotho 62%, in Malawi 54%, in South Africa 71%, in Swaziland 68%, in Zimbabwe 77%.

Real life presents employment situations which are intermediate between the specific categories listed in ICSE. For statisticians in charge of collecting data. ICSE does not present a clear instruction for the classification of groups such as owner managers of incorporated enterprises, homeworkers, subsistence workers. It only makes a reference to such groups in Section IV of the ICSE Resolution, where it says: "Some of the groups represent subcategories or disaggregations of one of the specific ICSE categories. Others may cut across two or more of these categories."

ILO has made proposals in a preparatory meeting of ICLS to introduce innovations that would reflect the changes in the employment relationships in the labour market. However "many of the proposed detailed groups could not unambiguously be allocated to one and only one of the familiar aggregate ICSE groups." The question remains then what to do with those which research must be done on how best tostructure the classification and the kinds of questions needs to capture the dimension of this important group of workers. Until this is done the data cannot be allocated. As ICSE in its current form does not answer the question, and convey a biased impression of the employment situation of a country.

In order to find a classification to guide effectively the decision of statisticians in this matter, we must examine the criteria and concepts on which it is based. The following definitional criteria underlie the classification of employment:

a) Location

b) Contribution to the cost of production

c) Ownership of means of production

d) Risk

e) Kind of supervision

f) Existence of a contract or arrangement

g) Degree of autonomy and economic independence

h) Remuneration

i) Sale of work or of goods and services

j) Payroll

a) Location. This refers to the place, rural or urban, where the work is carried out. All those who work outside the establishment to which they sell their products are called "home-based workers". Some of them possess a certain degree of autonomy and economic independence and are referred to as "independent home-based workers" (and in some publications simply as home-based worker) others do not have that degree of autonomy and are called dependent home-based workers, or simply homeworkers. This is the category exclusively covered by the Convention. The degree of autonomy and economic independence is further examined in par.b) below. Occasionally salaried employees may perform some work as employee at home, but they are not considered homeworkers. (Conv. Art. 1b)

b) Contribution to the cost of production. There exists a substantial difference in this respect between homeworkers and salaried employees. The fact that the work is being done by a homeworker, at the homeworker’s premises means that not only the rent but also cleaning, heating, electricity, and similar expenses are paid by the homeworker. Enterprises with salaried workers have to pay such expenses themselves. That can represent a substantial difference in costs, especially in labour-intensive industries. And it explains the extended use of homework in such industries.

c) Ownership of means of production. Salaried person use means of production of the owner of the enterprise in which they work They contribute to the process of production only their work. If persons contribute in addition to their work also some capital, whatever its size, they differ from that of a salaried worker. That is precisely the case of the homeworkers. Homeworkers contribute not only their work, but also capital in the form of the place of work, and sometimes also tools, machines and some material inputs. The amount of capital does not matter, in fact it may be minute

d) Risk. Risk is another criterion that distinguishes the salaried employee from the homeworker. There can be several types of risk in economic relationships. There is the typical risk of the entrepreneur (financial miscalculations) and the worker's risks due to the precariousness of employment and to accidents in the process of production. One of these are fires which may affect the person of the worker and in the case of homeworkers also their property. Salaried employees generally do not incur losses of property in the process of production, but homeworkers do. It is the homeworker who bears the risk of such hazards. Health hazards in the case of those who work at their homes may affect the whole family. Surveys show that work irregularity and health hazards are the risks most frequently mentioned in the complaints of homeworkers.

e) Kind of supervision. There is no supervision in the case of homeworkers, like the one that can be carried out when a person works at the factory or shop. The provider of work does not have any direct supervision in the production carried out by the homeworker. He may however refuse to accept the product, if he considers that it does not conform to the specifications given by him. Remuneration. The remuneration can be of two different types depending on whether what is paid for is work or a good or service. It is a wage or a salary (compensation of employees in the national accounts) in the first instance and a price in the case of goods or services..

f) Existence of a contract or arrangement. A contract can be in writing or purely verbal and an arrangement can be more or less binding. In extreme cases, and this seems to be the prevailing situation in the case of homeworkers, the arrangement can be repealed at any moment. The usual situation of the homeworker is that there is no formal employee -employer relationship but an implied arrangement that the products will be accepted if specifications are met.

g) Degree of autonomy and economic independence. The degree of autonomy and economic independence is determined by the economic relations of the workers: whether they deal with a single person or establishment with whom they have some kind of arrangement, or act independently in the market. In the first case the worker is classified as a homeworker, in the second case as an independent home-based worker or own-account worker. Doubts may arise when a worker, who habitually sells to one purchaser, turns to the market for selling some goods or services in the market. The decision should be based on which of the two outlets is more important in terms of the value of sales.

h) Remuneration for work relates usually to the time element (although sometimes also to pieces produced) while prices reflect the value of goods and services. This latter is the case of the homeworker, so that what he/she receives is a price per unit of product he/she sells. In terms of the national accounts, what is paid to an employee is called compensation of employees, while the income of a person producing goods or services combining her own work with some capital, is called mixed income. Accordingly a homeworker perceives mixed income

i) Sale of work or of goods and services. This is a fundamental criterion, as it determines not only what kind of remuneration is received, but also the position within the classification structure and the national accounts. The question is whether what is sold is work in itself or the result of work, namely goods and services. On this the Convention is adamant: it is the result of work in the form of goods and services that counts. Thus the question whether homeworkers sell their work or their wares has been answered: they do not sell work, they sell the results of their work. Sale of work refers to the contribution of only one factor, namely labour, while in the case of sales of goods or of services both labour and capital are involved.

j) Payroll. Salaried workers and employees are on the payroll of the employing organization. In labour market theory it is accepted that this contributes to the existence of a stable and responsible labour force. However, this implies, as ICSE points out, that the employing organization "is responsible for payment of relevant taxes and social security contributions where the contractual relationship is subject to national labour legislation." While it is true that labour legislation varies from country to country, most countries have in this respect some regulations that represent costs to the employer. Such additional costs can be avoided by using homeworkers, who do not appear on the payroll, because the corresponding transactions are recorded as purchases of goods or services. Part of the present trend of "putting out", "maquila" and "outsourcing" can be explained by this effort to cut labour costs.

National accounts. The concepts expressed above refer to employment. The economic aspects appear in the national accounts. The 1993 System of National Accounts employs the concept of "outworker", who can be an employee or a self-employed worker. (Para 7.27) reads: "Outworkers have some of the characteristics of employees and some of the characteristics of self-employed workers. The way in which they are to be classified is determined primarily by the basis on which they are remunerated: (a) The person is remunerated directly, or indirectly, on the basis of the amount of work done, ...irrespective of the value of the output produced or the profitability of the production process. This kind of remuneration implies that the worker is an employee; or (b) the income received by the person is a function of the value of the outputs from some process of production for which that person is responsible, however much or little work was put in. This kind of remuneration implies that the worker is self-employed." Moreover, SNA reminds us that "outworkers meet some production costs themselves: for example, the actual or imputed rent on the buildings in which they work; heating, lighting and power; storage or transportation; etc." (Para 7.26). And it draws attention to the fact that "When the outworker is an own-account worker, the payment from the enterprise to the outworker constitutes a purchase of intermediate goods or services. When the outworker is an employee, the payment constitutes compensation of employees and is therefore paid out of the value added of the enterprise. Thus, the autoworker's status affects the distribution of value added between enterprises as well as the distribution of incomes between compensation of employees and net mixed income." (Para 7.30)