Trends in Government

Government to seek implementation of major labor reforms at the workplace level

 

The Ministry of Employment & Labor announced four key labor reform tasks whose implementation at the workplace will be backed up by labor inspections and wage/collective bargaining guidelines.

* The Four key labor reform tasks: ① Refrain from wage increases for the top 10% of high-income employees and expand youth employment; ② Shift from seniority-based wage systems to job- and performance-based ones; ③ Promote fair human resource management (HRM) practices; and ④ Strengthen protection for vulnerable workers.

 

[Table 1] Government Guidelines on the Four Labor Reform Areas

Four Key Labor Reform Areas

Labor Inspections

Wage/Collective Bargaining Guidelines

Refrain from increasing wages for top 10% of high-income workers

&

promote youth employment

▴Provide guidance on setting reasonable compensation levels considering factors such as the extended retirement age and labor productivity

▴Urge large and public companies to refrain from excessive wage increases

▴Use funds thus saved to create more jobs

Shift from seniority-based wage systems to job- & performance-based ones

▴Select 1,150 target workplaces to encourage adoption of a peak wage system

▴Promote job- & performance-based wage systems without severe wage reductions

Promote fair HRM practices

▴ Inspect workplaces engaging in unfair labor practices such as prolonged non-compliance with Labor Relations Commission orders for worker reinstatement without justifiable reasons, and physical abuse ▴Establish a support team for competency-based HRM

Strengthen protection of vulnerable workers

▴Inspect industrial complexes for illegally dispatched workers

▴Inspect workplaces employing a large number of youth

▴Regular, frequent inspections for discrimination against non-regular workers

▴Establish guidelines on employment security for fixed-term workers

▴Revise guidelines on protecting working conditions for in-house subcontracted workers

Other

▴Correct illegal or unreasonable collective agreements

 

 

Meanwhile, as the MOEL will implement guidelines on protecting fixed-term and in-house subcontracted workers and strengthen labor inspections, enterprises are likely to have more personnel management difficulties.

 

[Table 2] Government Guidelines on Fixed-term and Subcontracted Workers

Main Points

Fixed-term

workers

▴Convert employment status of fixed-term workers doing regular/continuous work into open-ended contract employment when the work has continued for two years and is expected to continue in the future

▴There shall not be discrimination between workers whose status is converted to open-ended contract employment and other workers engaged in the same or similar kind of work

▴Unreasonably short employment contract periods shall be prohibited if the intention is to repeatedly renew a fixed-term employment contract

In-house subcontracted workers ▴Primary contractor companies shall make efforts to pay the contract price in an appropriate manner (in terms of wage etc.) to prevent unreasonable discrimination between in-house subcontracted workers and the primary contractor’s workers doing the same or similar kind of work

▴Subcontractors shall make efforts to ensure that there is no unreasonable discrimination between in-house subcontracted workers and the primary contractor’s workers doing the same or similar kind of work

▴ Primary contractor and subcontractor companies shall share necessary information between them to prevent unreasonable discrimination between their workers

 

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