Thursday, June 27, 2019
Business Planning Halted Due to Labor Policy Uncertainties
Employers, Workers at Odds over Key Issues
Business Planning Halted Due to Labor Policy Uncertainties
  • By Jung Suk-yee
  • February 7, 2019, 10:34
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Employers and workers are still at odds over key issues related to more flexible working, a new minimum wage determination method, and discussions regarding ratification of the core conventions of the International Labour Organization (ILO).

The business community is jittery as three major labor policies are still up in the air. The policies are related to more flexible working, a new minimum wage determination method, and discussions regarding ratification of the core conventions of the International Labour Organization (ILO).


South Korean entrepreneurs and workers have been in conflict with each other over the issues since last year. The Economic, Social and Labor Council, a presidential advisory body, is currently advocating the expansion of flexible working whereas the Korean Confederation of Trade Unions is preparing a general strike at the end of this month against it. The government is planning to lengthen the unit period of flexible working from up to three months to six or 12 months mainly in the shipbuilding, construction and IT industries. The government is going to push ahead with the legislation procedure if no agreement is reached within the council by the middle of this month.

When it comes to the core conventions of the ILO, both sides are in conflict over alternative work in the event of a strike and a ban on strikes at workplaces and no agreement is likely to be reached by the end of this month. “The business community’s burden will soar once dismissed or unemployed persons are allowed to join labor unions and the three labor rights are guaranteed for workers such as insurance planners and golf caddies in the framework of the conventions,” the Korea Employers Federation explained, adding, “Without the alternative work and the ban on strikes, South Korean enterprises’ productivity and business performance will deteriorate to a significant extent.”
 

The government, in the meantime, is working on the new minimum wage determination method to have the bill approved by the National Assembly next month while the labor community is opposed to it. According to the government, the Minimum Wage Council needs to be divided into two panels so that the negative effects of a rapid increase in minimum wage can be addressed.


South Korean companies’ business plans for this year can be seriously affected if the three issues are not handled enough within this month. “We are in urgent need of more flexible working because we have subsidiaries in the energy sector,” an official as a major business group said. “Our regular plant maintenance scheduled for the first half will go awry unless the unit period is lengthened immediately.”