Problems with the Government’s Legislative Bill on Non-Regular Workers and Related Views

- Ministry of Labor Notice No. 2004-111, Proposed Act on the Protection, etc. of Fixed-Term and Part-Time Workers -

- Ministry of Labor Notice No. 2004-112, Proposed Partial Amendment to the Act on the Protection, etc. of Dispatched Workers -

1. Meaning and Background of the Legislation

Recently, as the business environment has changed rapidly, employment arrangements have become more diverse, and reflecting this trend, the number of workers in non-regular forms of employment has been increasing. This phenomenon is not unique to Korea, but is a general trend appearing worldwide in terms of the labor market. Today, labor market flexibility has become a measure of a country’s national competitiveness.

In particular, because protection for regular workers is very strong in Korea, many firms show a preference for non-regular workers. However, as polarization in working conditions among workers and rigidity in corporate personnel management have recently come to the fore, both labor and management strongly called for the need to revise employment-related laws.

Accordingly, beginning in July 2001, the Tripartite Commission established a special committee on non-regular workers and began discussions on measures to protect them, but no agreement was reached, so the discussions were concluded and the results were transferred to the government.

Referring to the results of the Tripartite Commission’s discussions, the government, after consultations with relevant ministries, issued advance legislative notice on September 11, 2004 of the proposed enactment of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers and the proposed amendment to the Act on the Protection, etc. of Dispatched Workers.

2. Problems with the Government’s Legislative Bills

The basic direction of the government’s legislation is to eliminate unreasonable discrimination against non-regular workers and otherwise protect them, while at the same time enhancing employment flexibility so as to strike a balance between the two.

However, when one examines the contents of the bills announced this time, most of them concern the protection of non-regular workers, while in terms of securing employment flexibility, the only measure is the expansion of the scope of eligible dispatched work.

More specifically:

First, establishing procedures for remedying discrimination through the Labor Relations Commission is premature and will impose a heavy burden on firms in actual implementation.

At the present point, when no clear standards have been established for distinguishing discrimination from differences or for identifying unreasonable discrimination, if procedures for discrimination relief are created, not only will applications for relief flood in, but objectivity and fairness in judgments cannot be guaranteed.

Second, restrictions on dismissal and obligations of direct employment will impose excessive burdens on firms.

Although the contract term for fixed-term work has been expanded from one year to three years in the name of improving employment flexibility, this has no real effectiveness from the standpoint of enhancing flexibility.

At present, although contract terms are set at within one year, firms can in practice continue using fixed-term workers for a certain period without real restriction through contract renewals, or terminate the contractual relationship when necessary. Therefore, expanding the contract period to three years and applying dismissal restriction provisions once that period is exceeded can actually be seen as strengthening employment rigidity compared with the present.

In a situation where dismissal is difficult, requiring the dismissal restriction provisions to apply unconditionally once a certain period has passed will place a considerable burden on firms. And even for the workers concerned, because they may be dismissed before three years have elapsed, this is also negative from the standpoint of employment stability.

Third, setting a three-month suspension period is excessive regulation.

Even if the scope of eligible dispatched work is expanded as announced by the government, if a suspension period is imposed, employment will instead become more rigid and dispatched work will contract sharply. Because of the suspension period, firms will end up unable to use dispatched work arrangements any longer. By undermining the continuity of work, this means that even if the scope and period of dispatch are expanded, dispatched work ultimately will no longer be usable, and as a result there is a strong possibility that the employment situation of dispatched workers will worsen.

3. Conclusion

At first glance, the government’s legislative bills may appear to relax regulations by extending the period of use for fixed-term workers and the dispatch period for dispatched workers, and by converting the eligible dispatched work system to a negative list approach.

However, looking at the overall contents—including employment obligations and restrictions on dismissal, the introduction of a suspension period when using dispatched workers, prohibition of discrimination and relief procedures, and the creation of penalty provisions for employers—they in fact have a strong tendency toward strengthening regulation.

Moreover, while thoroughly ignoring the issue long raised by the business community of easing overprotection for regular workers, the legislation consistently provides one-sided protection for non-regular workers, creating the problem that it is being pushed in a direction that further reinforces rigidity in the labor market.

This is a serious problem even in light of the global trend toward strengthening national competitiveness through more diverse forms of employment and greater labor market flexibility, as well as the pressing national tasks of job creation and economic revitalization. It should be clearly recognized that improving labor market flexibility leads directly to stronger corporate competitiveness and will also greatly help resolve the urgent problem of unemployment among young people and middle-aged and older workers.

Jungtae Kim (Director, Korea Employers Federation)

Wiki:

https://www.cfe.org/w/bbsDetail.php?idx=78

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Original title: 비정규직관련 정부입법안의 문제점 및 의견

Author: Jeong-tae Kim

Date: 2004-10-19

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=bill&pn=3&idx=25835