| After Trade Union ‘A’ failed to reach agreement with its management during collective bargaining, it went on strike for 10 days. According to the principle of “no work, no wage” the employer did not pay wages to employees for those 10 days and also notified Union A several times that the number of days of paid annual leave was to be reduced the following year.
Trade Union A insisted that the employer should not disadvantage its employees in any way due to legal industrial action and, while it was accepted that wages would not be paid, the same number of holidays and leave days should be granted. If a strike is legally justified, should the employer give as many holidays and leave days as stipulated in the law even though its employees did not work on required work days? ※ Note: this article is about legal strikes, but the conclusion can be applied to the calculation of child-care leave as well. |
When strikes occur, the first concern of companies might be disruption of production or resulting financial damage. Besides these, many issues regarding labor management can arise. In terms of legitimate industrial action, trade unions often demand their employers provide the same level of working conditions as before, which can become an additional source of conflict between labor and management.
As the trade union right to strike is enshrined in the Constitution and labor laws of Korea, employees who participate in a strike should not be put at any unfair disadvantage. “Unfair disadvantage” refers to discriminatory actions in terms of wages, employee welfare, promotion, etc. over other employees who did not join the strike.
Although Korean labor law prohibits unfair discrimination against employees who join industrial action, it does not mean that an employer is obligated to pay wages to them for the time they did not work, and these can be deducted from their normal wages on the grounds of the principle of “No work, no wage.” Recently, more employees are aware that they cannot demand wages for industrial action periods. However, does the same rule apply to the calculation of holidays and leave?
Does the principle of “no work, no wage” apply to holidays and leave?
Since the Korean Supreme Court established the “no work, no wage” principle regarding strike periods, this principle has been stipulated in labor laws. Notwithstanding, controversy over employee rights to take time off on holidays or leave continues. In particular, employees often request their employer to protect their holidays and leave days, as the Labor Standards Act states, even during a strike. Are such requests reasonable?
According to the Labor Standards Act, employers should grant at least one paid holiday to employees who have worked each day of the previous week. Also, 15-day paid annual leaves should be given to employees who have worked 80% or more of the required days. Given these provisions in the Act regarding holidays and leave, the most critical factor to securing weekly holidays and annual leave is employee “workplace attendance.”
As holidays and leave are supposed to be granted only to employees who have provided labor service for a certain period of time, their right to holidays and leave is not secure unless they fulfill the required number of work days. Furthermore, according to the “no work, no wage” principle, the Supreme Court has ruled that the number of paid weekly holidays and annual leave days can be reduced in proportion to days not worked even though the employee concerned fulfills the requirement for paid weekly holidays and annual leave.
When the “no work, no wage” principle is applied to the calculation of holidays and leave, the important issue is the method used to calculate days worked by an employee or absences from the workplace. When employees do not work during a legal strike as in the above-mentioned case, things become more complicated.
Under current labor laws, some cases of absence are regarded as actually working. Periods of suspension due to work-related accidents, periods of pre- and post-natal leave, and other special circumstances allow absences to be counted as normal days worked.
However, there is no specific legal provision regarding absence during periods of legal strikes or childcare leave. So far, whether these periods are considered absences has only depended on interpretation. However, the Supreme Court recently decided that if an employee did not actually work even during a justified strike, days not worked cannot be deemed as days worked. As legal strikes are part of employee labor rights, days not worked during a strike cannot be defined as absences, but they also cannot be regarded as normal days worked because the employee did not actually work. The same rule also applies to periods of childcare leave.
Given the Supreme Court’s intention behind this ruling, any absence, regardless whether caused by legal strike or childcare leave, can be reason to reduce the number of weekly holidays and annual leave days.
The number of annual leave days can be reduced in proportion to the number of days not worked
According to current Korean labor law, employers should grant at least 15 annual leave days with pay to employees working 80% or more required work days. However, if an employee does not work due to a strike, the number of annual leave days can be reduced.
If, for example, employees stage a strike for 10% of their contractual working days, the number of annual leave days the employees receive can be reduced in proportion to the days not worked during the strike: 15 days X 0.9, not 15 days. Even should a trade union demand more than the 15-day statutory annual leave as given in previous years, employers are not obligated to do so. For absences due to childcare leave, the same rule can apply.
This is a logical rule from the perspective of “No work, no wage.” As paid annual leave is meant as remuneration for employee labor service in the preceding year, it is reasonable to reduce the days in proportion to days not worked.
For strikes running a consecutive 7 days, weekly holidays should be given without pay
According to the Labor Standards Act, employers shall grant a paid weekly holiday to employees working the entire preceding week. Most companies set Sunday as the paid weekly holiday, which means it is paid leave. As only employees who worked the entire previous week are legally entitled to one weekly holiday with pay, in cases of absence due to industrial action, payment for weekly holidays can be a controversial issue.
During a one month strike by Trade Union ‘A’, employers are not obligated to pay wages for the 4 or more weekly holidays. Given the above-mentioned requirements for paid weekly holiday, employees who participate in Trade Union A’s strike should not be paid wages for those 4 weekly holidays (Sundays).
If an employee was absent from work in the previous week, is the employee given a weekly holiday at all? Yes, the employee has a right to the weekly holiday regardless of his/her reasons for absence, but without pay. When considering the alternative (one employee showing up on Sunday to replace the missed day), treating Sunday as unpaid leave seems more reasonable.
If wages for weekly holidays are already included in employee monthly salaries, the wage for one day should be deducted from the monthly salary when a weekly holiday is to be treated as unpaid. Weekly holidays need to be protected whether employees work all the previous week’s required working days or not. The only thing affected is whether these days are paid.
When strikes occur, controversies and opinions surface regarding HR-related issues such as weekly holidays and annual leave. This article is about legally-justified strikes. Hence, if an employee is absent from work due to participation in an illegal strike, the employee’s right to holidays or leave should be restricted. In addition, such absence may be justification for further disciplinary action.