The subcontracted baker issue in Paris Baguette (PB) has concluded 4 months after the Ministry of Employment and Labor (MOEL) stated “PB will be fined KRW 10 million (USD 9,326) per baker, if it does not directly hire its 5,309 subcontracted bakers.” The company and the bakers agreed on hiring through a subsidiary of PB, and of which PB is the largest shareholder.
On 11 January, PB announced that the company had drawn up an agreement with the Federation of Korea Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU), to directly hire the bakers through establishment of a subsidiary. This was the same day when the MOEL had stated that the fine against PB would come into force, if the company had not directly hired those bakers who had not signed a written statement that they did not desire to be directly hired by PB.
Through this agreement, the subcontracted bakers will be hired by the subsidiary, which PB 51% owns. The remaining 49% of shares will be owned by the franchise store owners. Wages of the bakers will increase by 16.4%, with the store owners to bear part of the increase. The welfare benefits will be identical to those provided to PB’s direct employees.
However, some point out that the government-enforced regulations do not consider reality and added to the controversy by allowing civic and political groups to weigh in on the issue.