Bills proposed in the 19th National Assembly
1,134 bills are pending in the National Assembly’s standing committee as of August 20, 2012 starting from the opening on May 30. Of those, 207 bills (18.3%) are currently stalled in both the Environment & Labor Committee (85 bills) and the Health & Welfare Committee (122 bills). Considering the fact that the average number of bills pending in the 15 standing committees is 75.6, the number of bills pending related to labor and welfare concerns is substantially higher than other issues.
In particular, 64 of the 85 bills pending in the Environment & Labor Committee are related to labor issues. Sim Sang-jeong, floor leader for the Unified Progressive Party (UPP), proposed 8 revision bills (12.5%) on the Trade Union & Labor Relations Adjustment Act (TULRAA), while the Democratic United Party (DUP) has presented 41 bills (64.1%) so far.
Those bills mean that, as initially feared, pro-labor lawmakers are focusing on legislative activities favoring the interests of labor. Because most of such bills are motivated by a political desire to win support from labor, politicians are expected to accelerate their steps toward a pro-labor movement and use their legislative activities as promotional tools ahead of the upcoming presidential election. Hence, the Korean Employers Federation has expressed business opinions on these issues and suggested appropriate responses to the increasingly pro-labor revision bills.
Increase of pork-barrel bills under the name of ‘economic democracy’
(1) Individual labor relations
The proposed revision bills on the Labor Standards Act, which is about the relationship between individual workers and their employers, aims to i) expand the scope of application of the Labor Standards Act, ii) realize the principle of equal pay for work of equal value, iii) reduce working hours and iv) strengthen the conditions required to dismiss workers for managerial reasons. Since these revision bills conflict with the current economic situation in Korea, there is a very real concern that employment conditions are likely to deteriorate due to a lack of labor market flexibility.
In Korea, before implementing the principle of ‘Equal pay for work of equal value’ in the workplace, the current seniority-based wage system needs to be reformed. However, since trade unions strongly oppose the introduction of a productivity-based wage system, there exist some limitations in realizing the principle of equal pay for equal work in Korea.
In addition, due to the inflexibility of labor in Korea, it is very difficult for companies to maintain an appropriate number of employees under rapidly-changing economic conditions.
[Table 1] Bills regarding Individual Labor Relations
| Issue | Main Features | Title of Bill (presenter) |
| Wider scope of application | – Apply the Labor Standards Act to small businesses with four employees or fewer | Labor Standards Act(Han Jeong-ae, Sim Sang-jeong) |
| Shorter working hours | – Include holiday work as part of extended work hours- Delete the provision to allow businesses to be exempted from statutory working hours | Labor Standards Act(Han Jeong-ae, Sim Sang-jeong) |
| Equal treatment | – Realize the principle of ‘Equal pay for equal work’ | Labor Standards Act(Hong Yeong-pyo, Sim Sang-jeong) |
| Dismissalfor managerial reasons | – Strengthen conditions required to dismiss workers for managerial reasons- Create new provisions for the application of preferential re-employment and punishment for violators | Labor Standards Act(Hong Yeong-pyo , Sim Sang-jeong) |
Under these circumstances, a revision bill with a focus on the reduction of working hours might put even more burden on companies attempting to secure flexibility in labor management and therefore threatens not only the competitiveness of a corporation but also flexibility within the labor market.
Of particular concern, revision bills designed to strengthen the conditions required to dismiss workers for managerial reasons deprive a company facing serious management difficulties of the chance to restructure, which could ultimately result in massive layoffs due to corporate bankruptcies.
(2) Collective labor relations
As of August 20, the floor leader of the Unified Progressive Party (UPP), Sim Sang-Jeong, has submitted several revision bills including proposals to revise the Trade Union & Labor Relations Adjustment Act (TULRAA). Even though these revision bills contain only partial amendments to the TULRAA, they can be seen as full-scale amendments because their aim is to completely restructure existing collective labor relations. With no social consensus, sudden and radical changes in labor relations are highly likely to cause confusion in the workplace.
[Table 2] Bills regarding Collective Labor Relations
| Issue | Main Features | Title of Bill (presenter) |
| Labor disputes | – Delete the provision requiring legitimacy of labor disputes- Delete the provision banning demands for wages during labor disputes
– Exempt unions from responsibility for damage compensation without criminal liability and limit the right to seized property |
TULRAA(Sim Sang-jeong) |
| Time-off &multiple union systems | – Delete the provision regarding the time-off system and single bargaining channel- Delete the provision banning wage payment for full-time union officials | TULRAA(Sim Sang-jeong) |
| Lockout | – Strengthen the conditions required to impose a lockout | TULRAA(Sim Sang-jeong) |
* TULRAA: Trade Union & Labor Relations Adjustment Act
In particular, it is very dangerous to eliminate the provision to limit the range of legal labor disputes because trade unions are exempt from responsibility for their activities. If trade unions recklessly enter into a politically-motivated strike and a company has to take the loss and damage caused by that strike, this would mean there are no minimum safeguards for stable industrial relations in Korea. Moreover, the revision bills aim to delete the provisions of the time-off system and single bargaining channel from the TULRAA. This would deny the efforts made by labor, management and government which have contributed to social dialogue and agreement over the last 13 years. Such attempts would turn our stabilized industrial relations into militant confrontations led by some of the more notorious hard-line trade unions which are riddled with corruption and irregularities.
(3) Non-regular workers & in-house subcontract workers
A number of revision bills regarding non-regular workers have also been presented. The major features of those bills are to i) strengthen the discrimination correction system, ii) limit the reasons for hiring non-regular workers, and iii) provide for more direct employment.
These focus on more protection for non-regular workers and tighter regulations for employers without considering current business conditions and the reality of the labor market. In particular, limiting the reasons for hiring non-regular workers is likely to cause a serious loss of non-regular jobs, which will in turn aggravate employment conditions in the future.
During this National Assembly session, many bills which aim to expand the scope of labor laws have been submitted under the reason that in-house sub-contract workers and atypical workers are vulnerable groups. Tighter legislative regulations on the relations between sub-contractors and primary contractors might distort the nature of those contractual relationships and eventually cause serious confusion in the workplace.
[Table 3] Bills regarding Non-regular & In-house Subcontract Workers
| Issue | Main Features | Title of Bill (presenter) |
| Non-regular workers(Fixed-term and Part-time Employees, Dispatched Workers) | – Prohibit discrimination on bonuses- Expand a recognized discrimination case to same or similar discriminations
ü Stipulate the principle of equal pay for equal work in labor law – Limit the reasons for hiring temporary and dispatched workers – Stipulate the criteria distinguishing ‘dispatched work’ and ‘outsourcing’ – Regard illegal dispatch as direct employment |
Act on the Protection, etc., of Fixed-term and Part-time Employees, Act on the Protection, etc., of Dispatched Workers(Lee Hahn-koo)
Labor Standards Act (Hong Yeong-pyo, Sim Sang-Jeong)
Act on the Protection, etc., of Fixed-term and Part-time Employees (Park Jie-won, Sim Sang-Jeong)
Act on the Protection, etc., of Dispatched Workers (Eun Su-mi) |
| In-house sub-contract workers | – Introduce discrimination correction system- Ban on indirect employment for permanent and regular work
– Primary contractor and sub-contractor share the responsibility for unfair labor practices against the trade union of in-house sub-contract workers |
Act on the Protection, etc., of In-house Sub-contracted Employees (Lee Hahn-koo)
Labor Standards Act (Sim Sang-jeong)
TULRAA (Sim Sang-jeong) |
| Those in atypical employment | – Recognize as workers and grant the three labor rights, and apply Industrial Accident Compensation Insurance benefits same as workers. | Labor Standards Act ･TULRAA· Occupational Safety & Health Act, Act on the Collection, etc. of Premiums for Employment Insurance & Industrial Accident Compensation Insurance(Sim Sang-jeong) |
(4) Minimum wage
A minimum wage should be decided considering the purpose of guaranteeing workers’ livelihood, as well as carefully reviewing business conditions. Nevertheless, the proposed revision bill to set the lower limit of the minimum wage at ‘the level of 50% of the average salaried pay’ is unrealistic, and difficult to find being implemented in any other country. If the lower limit of the minimum wage is set, the actual minimum wage will increase excessively, while small and medium businesses will feel a greater burden when hiring employees. It is of special concern that a sudden abolition of the provision to reduce the minimum wage would result in an increase in labor costs, thereby enhancing job insecurity for a vulnerable group.
In addition, some bills attempt to reform the method of appointing public interest members to the Minimum Wage Council, in an effort to improve the decision-making process of minimum wage. They suggest that workers and employers organization should recommend public interest members to the Council, or that the President, the National Assembly and the Chief Justice of the Supreme Court should each appoint three public interest members.
(5) Employment and discrimination
The plans for revision of the Act on Employment Promotion for Youth, which force a company to hire jobless youth for 3-5% of its work force, will hinder a company’s autonomy to use the best human resources available and could even bring about a congestion of personnel. Moreover, excessive protection for regular workers blocks the development of company competitiveness and hinders job creation. Concerns are rising that employment rigidity would be intensified if companies are forced to post types of employment, since the posting could have a detrimental effect on the reputation of companies and force them to give non-regular workers regular employment.
[Table 4] Bills regarding Employment and Discrimination
| Issues | Main Features | Name of Bills (presenter) |
| Youth employment | – Private companies over a certain size should hire jobless youth for 3-5% of their workforce. | Act on Employment Promotion for Youth(Yoon Young-seok, Kim Tae-won, Oh Jae-se, Park Nam-chon) |
| Posting types of employment | – Increase transfer from non-regular to regular workers through posting situation of employment type | Framework Act on Employment Policy(Lee Hahn-koo) |
| Ban on academic discrimination | – Ban on discrimination based on academic background | Act on Academic Discrimination (Kim Ki-hyun) |
Meanwhile, Kim Ki-hyun (Saenuri Party) has proposed a bill to ban academic discrimination. However, an academic background is not a fundamental trait such as a disability or gender, but rather is a trait dependent upon the individual’s efforts and choices. Academic background should be an indicator that demonstrates the different qualities of human capital in the labor market, not a criterion to determine discrimination.
It is dangerous to replace market order with political logic Even though the world economy is slowing down and Korean economy is experiencing hardships, bills related to democratization of the economy seem to only emphasize distribution through regulations on companies. It is clear that companies will lose their competitiveness and that our economy (and therefore job creation) will be negatively affected if these bills are enacted.
It is irresponsible for the governing and opposition parties to claim that economic democratization is the panacea for the current economic situation. The claim is designed only to win votes in the presidential election. Democratization of the economy is not a solution for the crisis we are facing.
We need a true democratization of the economy which sets a minimum of regulations of the government, promotes autonomy of industrial relations and respects order in the free market.