It has been 5 years since the system for correction of discrimination against non-regular workers was implemented, and a number of cases have been handled and related discussions continued. At the end of last year, some parts of the laws related to non-regular work were revised, including the period for application for correction of discrimination, which has been extended to 6 months from the current 3 months. Correction of discrimination through labor inspections will also begin this coming August 2, without requiring application from individual employees.
Meanwhile, stronger proposals have been made, such as the ’Recognition of Right to Union Representation,’ and are now pending in the 19th National Assembly. The issue of discrimination against non-regular workers is getting more attention, while the criteria used to determine whether unreasonable discrimination exists or not are very complicated and somewhat unclear.
[Figure 1 ] Discrimination through various allowances
Against this backdrop and to assist individual companies, the guidelines analyze by category several cases handled by the courts and the Labor Relations Commission. Through these cases, individual companies will be able manage their workforces without violating the law.
What is the System for Correction of Discrimination?
Currently, the “Act on the Protection, etc. of Fixed-term and Part-time Employees” and the “Act on the Protection etc., of Dispatched Workers” provide procedures for correction of discrimination against ‘fixed-term, part-time, dispatch employees’. An employee claiming discriminatory treatment may request correction of that discriminatory treatment from the National Labor Relations Commission (NLRC). The NLRC may issue a correction order to the employer, if the alleged treatment meets the criteria for discrimination in Table 3 of Labor News:
[Table 1] Criteria for Determining Discrimination
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Point 1
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C Who: Fixed-term, part-time, dispatched employees
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Point 2
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C Compared to who: Regular, full-time employees engaged in the same or similar job at the same workplace
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Point 3
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C What: Wages and other working conditions
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Point 4
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C Actual discriminatory treatment? Is payment etc. actually less favorable?
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Point 5
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C Justifiable reason: because of differences in performance, duty or necessary qualifications?
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Persons committing unjustified discrimination and deadline for correction
Non-regular employees who believe they have been unfairly discriminated may apply to the NLRC for correction of the discriminatory treatment against ‘the person(s) committing unjustified discrimination’. In short, the employer becomes a respondent for correction of discrimination. For dispatched employees, either the sending employer or the using employer may be the respondent.
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Employees need to apply to the NLRC for correction within 3 months after the alleged discrimination occurred. This deadline will be extended to 6 months, effective from August 2, 2012.
Requirements for issuance of corrective order for discrimination
1. Existence of a comparable employee engaged in the same or similar work
In order to determine the existence of disadvantageous treatment of fixed-term, part-time or dispatched employees, there needs to be an employee who is engaged in the same or similar work.
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The basic requirement for determining discrimination is the existence of a comparable employee who is engaged in the same work. Therefore, the most important point in applying for correction of discrimination is whether the duties carried out by two different types of employee are either the same or similar. There are no clear rules regulating the definition of ‘same or similar work’ so standards are generally drawn from judicial precedent.
【Criteria for determining same or similar work】
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1. First, core duties are compared.
2. Second, if regular workers carry out the same peripheral jobs, ‘same or similar work’ is determined based on the importance of those peripheral duties.
☞ If the level of importance of those peripheral duties is the same or greater than the common duties, they shall not be determined as ‘same or similar work’. But if the peripheral duties are of minor importance, they shall be determined as ‘same or similar work’.
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Following are some examples which can be referred to when needing to determine the existence of “same or similar work.”
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1. An employee of a primary contractor company wrapping small tires and a subcontract employee wrapping large tires in the same workplace: Same or similar work
2. Driver of a medium-sized bus (non-regular worker) & driver of a large-sized bus (regular worker): Same or similar work
3. Non-regular employees collecting toll fees and regular employees supervising and operating tollbooth facilities: Not same or similar work
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2. Scope of prohibited discrimination (Wages and other working conditions)
Discrimination in ‘wages and other working conditions’ is prohibited according to the Act on the Protection, etc of Fixed-term and Part-time Employees. However, the courts and the NLRC have widened this scope to include discrimination in wages and other working conditions as determined by law, through collective bargaining and in the Rules of Employment.
There are many interpretations regarding the scope of ‘working conditions’ but in general, the NLRC includes in working conditions all payments resulting from employment relations, even if they may not directly relate to the supply of labor.
3. Disadvantageous treatment
Disadvantageous treatment refers to inferior treatment that fixed-term, part-time and dispatched employees receive in terms of wages or other working conditions when compared to regular employees carrying out the same or similar work. If an employer is regarded to have treated an employee disadvantageously, the next important step is to demine whether or not there are justifiable reasons for doing so. Whether such reasons exist or not for disadvantageous treatment in wages can be determined in the following ways.
【In principle, disadvantageous treatment is determined by comparing the details】
If there are detailed categories in wages paid to fixed-term, part-time and dispatched employees, they shall be compared with those of regular employees.
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【In addition, disadvantageous treatment may be determined by categorizing wage items】
An employee who is disadvantaged in some particular wage items but receives better treatment in others may not be regarded as receiving disadvantageous treatment as the payment received by both types of employee would be the same or similar.
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4. Justifiable reason
There are no clear rules for defining ‘justifiable reason’ but generally, disadvantageous treatment should not be determined simply according to how the employee feels. If an employer has justifiable reason, a correction order may not be issued even should an employee claim to be disadvantageously treated. Some cases handled by the NLRC provide a guidance on determining the existence of “justifiable reason”:
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Type 1
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Disadvantageous treatment can be justifiable when differences in employment conditions, standards and procedures determine wage amount.
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Type 2
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The scope of individual duty is directly related to quality and quantity of work and becomes an important factor in determining wages.
Therefore, disadvantageous treatment in wages and working conditions from differences in individual responsibility is considered justifiable.
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Type 3
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For fixed-term employment with short working periods, disadvantageous treatment in wages and/or other working conditions is justifiable.
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Type 4
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Disadvantageous treatment is justifiable if the labor productivity of non-regular employees is lower than that of regular employees.
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Type 5
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Some cases of disadvantageous treatment may be justifiable on the grounds of collective bargaining.
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Illegal dispatch and discrimination
In-house subcontract is a civil contract between individual companies. There is no employment relationship between the primary contractor and its subcontract workers. For legal in-house subcontracts, discrimination between workers of the primary contractor and its subcontractor companies are not an issue. However, Article 21 (Prohibition, Correction, etc., of Discriminatory Treatments) in the Act on the Protection, etc., of Dispatched Workers applies if it is proven that the primary contractor directly oversees and commands subcontract workers thus making the dispatch illegal.
When determining discrimination related to illegal dispatch, the following differences should be noted when comparing non-regular workers with those who are directly employed.
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【Note1】Money, valuables or amenities that are provided to workers based on the fact that they are direct employees shall not be considered when determining discrimination against dispatched workers
– It is reasonable that dispatched workers are not provided the same money, valuables or amenities as employees who are directly hired.
【Note 2】The entity required to carry out a corrective order differs between cases involving temporary workers and those dispatched (subcontract) workers. Sending employers and using employers have the following obligations:
※ The Act on the Protection, etc., of Dispatched Workers states that sending employers (subcontractor companies) are responsible for paying wages to dispatched workers (subcontract workers), and thus responsibility for discrimination correction in wages lies with the sending employer (subcontractor company).
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Points to be considered for preventing disputes over discrimination
1. CEOs should pay attention to the “Guidelines for Protection of In-house Subcontractors” newly introduced by the Ministry of Employment and Labor (MOEL) and the related discussion on the monitoring to prevent discrimination.
CEOs need to fully understand the two new systems to be introduced starting 2 August, 2012.
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* The deadline for applications for correction of discrimination shall be 6 months from the day the alleged discrimination occurred (currently 3 months).
* Even without workers’ request for correction of discrimination, the MOEL can monitor for any discriminatory actions on a regular basis and ask the National Labor Relations Commission to issue a corrective order
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In addition, CEOs need to compare the practices at their workplaces with the regulations of the MOEL, as found in “Guidelines for Preventing Discrimination in Employment on the Grounds of Employment Status” (November 2011).
【Main Details of the “Guidelines for Preventing Discrimination in Employment on the Grounds of Employment Status”】
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▣ Employers should work to avoid discrimination against workers on the grounds of employment status with regard to valuables or bonuses provided for employee benefit.
1. Valuables provided in terms of employment benefits, including uniforms or holiday gifts
2. Money provided in terms of employment benefits including meal allowances, money gifts for family occasions, or payments for regular checkups
3. Bonuses
4. Use of amenities such as cafeterias, commuter buses, daycare facilities, or parking lots
5. Leave days in addition to statutory holidays
▣ Consultations should be held between labor and management to identify and reduce discrimination against non-regular workers in terms of employment
1. Give non-regular workers the same opportunity as regular workers in terms of vocational training programs
2. Give non-regular workers adequate information on recruitment of regular workers, and make efforts to give them priority for hiring as regular workers
3. Consult regularly to reduce discrimination through collective bargaining or Labor-Management Committees
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Trends in future legislation should be carefully observed since bills with tougher restrictions against discriminatory actions are pending in the National Assembly, including the bill that lets trade unions apply for corrective orders, representing individual workers.
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Trade Unions apply for corrective orders, representing individual workers
■ Monetary compensation (up to 10 times the amount of damage) for
deliberate and repeated discriminatory actions
■ Extends validity of corrective orders within the workplace where
discriminatory actions occurred.
■ Prohibits discrimination regarding payment of management bonuses,
etc.
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2. Companies need to look at the jobs carried out by regular and non-regular workers, and identify whether the workers are doing the same jobs. Wage systems that reflect performance and importance of jobs should be prepared.
Length of service is significant in the current wage systems of many companies. It is true that current wage systems do not appropriately reflect the value of jobs, its importance, or particular responsibilities. Such systems also cannot properly reflect job-oriented factors such as the performance. Reasonable classifications are required of wage items emphasizing workers’ capabilities and job performance and systems that can determine wages based on these factors.
Current wage systems should be replaced with job- or performance-based systems. In particular, CEOs should pay attention to whether any non-regular workers perform the same tasks as regular workers. It is important to prevent such job-sharing or substitution.
3. It is necessary to establish a separate rule (e.g. Rules of Employment) for non-regular workers, and clarify the scope of money and/or valuables, and the required conditions.
Separate Rules of Employment for non-regular workers are required, which can be used to justify discrimination in the event of applications for correction. Nevertheless, internal regulations do not have absolute legal force, but are just for figuring out specialty and convenience of managing jobs from different types of employment. Illogical restrictions will be determined as unreasonable discrimination, such as internal regulations excluding the payment of money or other valuables to non-regular workers.
Therefore, appropriate reasons for discrimination should exist in the differences in working conditions, such as different quality of jobs, scope of responsibilities and years of service.
4. If new job categories are established according to job characteristics, working conditions can be differentiated in accordance with those characteristics.
It is possible to set different working conditions for different occupational groups, if the differences in jobs and the value are properly reflected. Questions may arise if new working conditions are set for open-term contract workers who used to be temporary workers. If this is the case, a new agreement between the contracting parties is the answer in principle. If there are no additional conditions, the existing conditions can be considered to apply. Even if new working conditions for such workers are set, it is recommended that basic welfare be provided in consideration of the desire for workers’ sense of unity and loyalty to the company.
For these reasons, the MOEL’s “Guidelines for Protecting In-house Subcontractors” recommends that employers provide the same amenities to all workers, such as use of the cafeterias, commuter buses, daycare facilities, or parking lots and opportunity to receive money gifts for family occasions.
5. It is not appropriate to discuss the use of non-regular workers and their treatment as part of the issues of collective industrial relations.
The MOEL’s “Guidelines for Protecting In-house Subcontractors” recommends discussions on reducing discrimination through collective bargaining or Labor-Management Committees, something which trade unions are also demanding. Nevertheless, reducing discrimination and disparity in working conditions should not be the issues to be discussed during collective bargaining or Labor-Management Committees. Instead, grievance-handling systems can serve as a communication channel to seek improvement, depending on circumstances of specific workplaces and types of temporary workers. Therefore, it is desirable for labor and management to resolve unreasonable discrimination through legal procedures, and to refrain from establishing their own procedures through bargaining or agreements.