On 29 December 2014, the Ministry of Employment and Labor announced ’Comprehensive Measures of Non-Regular Workers’. The Ministry asked Special Committee on Labor Market Structure Improvement under Economic Social Development Commission (ESDC) to make official discussion on the measures. The Committee will finish discussion by March 2015 and draw conclusion. Upon context of the conclusion, the measures will be adjusted and complemented.
Comprehensive Measures of Non-Regular Workers
This comprehensive measures aim at △preventing abuse of non-regular employment and eliminating unreasonable discrimination and △providing detailed measures targeting various types of employment such as fixed-term employment. Also, this aims at promoting reasonable HR management through improving regulations regarding wage, working hours and employment contract to rectify the dual structure of the labor market.
1. Improvement of working conditions for non-regular workers (by employment type)
① (Common) Increase basic income and strengthen social safety net
￭ Increase minimum wage to an appropriate level (reflecting income distribution adjustment rate)
￭ Prohibit payment of less-than-minimum wage for simple laborers and impose fines immediately for violations
￭ Develop measures for comprehensive reform of employment insurance system including the coverage and re-employment
￭ Introduce the retirement pension fund in small-sized workplace with less than 30 employees and support low-wage workers to join the retirement pension scheme
￭ Make a certain amount of subrogation payments to employees whose wage in arrears; and provide loans to employers
② (Fixed-term workers) Reduce employment instability and discrimination, and enhance opportunities to convert status to regular employment
￭ Promote to convert non-regular workers engaged in regular and continuous jobs, to regular employment.
▲ Develop ‘Guideline for non-regular worker’s job security’ (convert non-regular workers engaged in regular and continuous jobs to regular workers; and recognize their previous work experience), ▲ provide subsidies to promote conversion of employment status to regular employment (50% wage increase), ▲ limit the use of fixed-term and dispatched employment in core jobs related to safety, including railways, aviation, and ships; and require to directly hire persons in charge of occupational safety
￭ Extend the period for hiring fixed-term workers and reduce the disparity
▲ Extend employment period for non-regular employees desiring to stay (within 2 year temporary employment period at age 35 or older) and compensate with an end-of-employment payment if employee’s status is not converted to regular employment, ▲ apply severance pay system to non-regular workers whose service period is 3 months or longer, ▲ limit the number of contract renewals (3 times maximum)
￭ Enhance effectiveness of discrimination remedy system
▲ Permit trade unions to apply for remedy for discrimination on behalf of employees, ▲ strengthen labor inspection on discriminative employment rules and collective bargaining, ▲ order to rectify any discriminative treatments in terms of welfare benefits for all employees
③ (Daily Contract workers) Improve working conditions including wage guarantees etc.
￭ Improve working condition of daily workers engaged in construction projects
▲ Increase the retirement mutual aid benefit, ▲ expand loans for living expenses, ▲ make subrogated payment to workers belong to an unlicensed constructor, ▲ establish employment support centers and provide more education/training during winter
￭ Strengthen protection for contract workers
▲ Develop standards to distinguish recess hours from working hour of surveillance/intermittent workers such as security guard, ▲ pay unemployment benefits to workers aged 65 or over who continue working for different contractors, ▲ protect workers engaged in emotional labor (stipulate employers’ obligation to prevent)
④(Dispatch Subcontract workers) Enforce rational regulations and market mediation measures to prevent abuse of subcontracting
￭ Establish in dispatch job market
▲ Enhance inspection over illegal dispatch in contract work and in-house subcontracting, ▲ introduce a certification system for employment agencies (to hire agency workers on regular basis and improve their working condition), ▲ specify details in dispatch (stipulate payment for dispatch employment such as labor costs and maintenance etc.) and make/distribute standard employment contract forms, ▲ offer financial subsidies to employer or using employer who convert dispatched workers into regular workers
￭ Deregulate dispatch employment (permit retirement-age persons, high-paying professionals, etc. to be engaged in dispatched work)
￭ Restrict licensing system on subcontracting hazardous/dangerous works, and extend primary employer’s joint responsibility for occupational safety and health measures at workplace
⑤ (Independent contractor) Handle grievances of those requiring protection
￭Expand the number of job classifications applied by employment/industrial accident compensation insurance (currently 6 job classifications are covered by employment insurance, with 6 others covered by industrial accident compensation insurance → cover 3 additional job classifications with each insurance)
￭ Provide low-interest personal loans for living expense to low-income independent contractors
￭ Develop and implement ‘guidelines to protect independent contractors’ (making written contracts, restrictions on contract termination, payment methods, etc.)
￭ Develop standard employment contract forms by job classification (expand to 11 from the current 2 types) and actively use dispute settlement process
￭ Improve working conditions of domestic workers (push forward with the bill, tentatively titled ‘Act on the use of domestic service and employment promotion for domestic workers’)
⑥ (Public sector) Establish regular employment practices, and improve working conditions and payment system for non-regular workers in the public sector
￭ Set the limit on the use of non-regular workers, and make persistent efforts to convert those engaged in regular and continuous work into regular workers
￭ Extend welfare credit (to purchase social welfare services) and bonuses to non-regular and open-end contract workers
￭ Take the quantity and quality of employment (type of employment, working condition, etc.) into account when allocating the government budget
￭ Improve wage structure of (workers with open-ended contract, non-regular workers in schools, etc.) in the public sector
￭ Strengthen guidance for protecting contract workers (by creating and disseminating a manual for service contract)
⑦ (Co-prosperity between large enterprises and SMEs, and between primary contractors and subcontractors) Encourage co-prosperity through active support such as financial assistances and incentives
￭ Offer financial assistance and tax benefits to large companies which provide support to their partner firms through employee welfare funds
￭ Introduce a ‘joint employee welfare fund,’ and offer financial assistance and tax benefits to those companies that join
￭ Develop and distribute ‘profit-sharing model,’ and support labor and management in large enterprises carrying out social responsibilities
￭ Give credits to companies who make efforts for co-prosperity when government grant related awards
2. Enhance labor market vitality
ㅇ Work on institutional improvement including wage, working hour, employment contract and etc., in order to enhance regular employment capacity through making HRM reasonable
￭ Gradually reduce the total working hours, with institutional improvement for flexible use of working hours
▲ Include holiday work(16 hours per week) into extended work (12 hours per week), whereas allow extra work (8 hours) upon agreement between the labor and management ▲ Reduce the number of industries exempt from working hour regulations (currently 26 industries→ 10 industries)
▲ Extend discretionary work types such as direct support for R&D, business planning (high-incomers) and etc. ▲ Extend the unit period of the flexible working hours system (employment rules: 2 weeks →1 month, labor and management agreement: 3 months → 1 year) ▲ Clarify application of working hour regulations to manager-level employees, etc.
￭ Reform wage system into job/performance-based one and spread wage peak system
▲ Provide more information on wage statistics, support voluntary reform on wage system in private sector through establishing 「Wage system reform supporters」 ▲ Increase financial assistance for introduction of wage peak system (USD 7,640 → USD 9,920) ▲ Clarify the scope of ordinary wage (stipulate definitions in the law and etc.)
￭ Clarify criteria* and process for termination of employment contract
▲ Strengthen procedural requirements to rehire workers who are dismissed for managerial reason, if the business gets back on the rails ▲ Develop guidelines on criteria and process of employment termination (assessments based on objective and reasonable criteria; efforts to avoid dismissal such as providing chances for improvement, redeployment, etc.; process fairness and related internal regulations)
￭ Improve criteria and process to change employment rules
▲ Clarify the process to change employment rules in order to apply reasonable working conditions according to changing circumstances such as introduction of retirement age extension, wage peak system and etc. (establish logical criteria to qualify ‘social norms’ that are recognized by juridical precedents) ▲ Revise the regulations on worker representatives who are recognized in case of no majority trade union (Trade Union and Labor Relations Adjustment Act)