Labor Reform Milestone
Four representatives of the nation’s labor, management, and government sectors have come to an agreement on labor market reform. Although the deal needs to be approved by the Federation of Korea Trade Unions (FKTU) on Sept. 14, they turned the corner in labor market reform.
“We have drawn up a tentative agreement document since we agreed on two key issues – dismissal of underperforming workers and change in employment rules,” said Kim Dae-hwan, chairman of the Economic and Social Development Commission in a briefing at the Seoul Government Complex on Sept. 13. Therefore, an agreement was tentatively reached by labor, management, and the government for the first time in 17 years, since a compromise among them which legalized layoffs in Feb. 1998.
“We will prepare measures to make an improvement to overall labor contracts with the participation of labor, and management, and experts,” said Labor Minister Lee Ki-kweon, Korea Employers Federation (KEF) Chairman Park Byoung-won, FKTU representative Kim Dong-man and Kim Dae-hwan, chairman of the tripartite commission in the agreement. Moreover, “We will clarify and honor conditions and procedures for change in employment rules,” they added. “During this process, the government will not unilaterally implement the new system. The government will deliberate with labor and management enough.”
This means that they agreed that even though the government will prepare guidelines on key issues such as the dismissal of low-performing workers and change in employment rules, the government will legalize them in the long term without unilaterally implementing them. This agreement includes the expansion of youth employment and the extension of periods of the employment of temporary workers. The tentative agreement is expected to expedite debates on labor market reform. The government is planning to reflect the agreement in a consultation on five major labor reform laws between the ruling Saenuri Party and the government that will be held on Sept. 14.
In addition, the government will devise measures about other issues such as the extension of temporary workers’ employment periods and the expansion of business types for contract-based workers via deliberations with labor and management and experts, to reflect them in bills when a regular National Assembly meeting ratifies.
“We will carry out a consultation based on the agreement and push forward with related legislation,” Labor Minister Lee said. “Labor, management and the government hammered out the deal from the point of the general good,” a Cheong Wa Dae spokesperson said. “The agreement is quite meaningful in that it will realize economic innovation and expand youth employment. Even though the procedure is not completed yet, we see it as a de fecto agreement.”