South Korea

10 Srpen 2021

Working life in South Korea

About

  • Autor: Dr Myung Joon Park and Dr June Namgoong
  • Institution: Korea Labor Institute (KLI)
  • Published on: Úterý, Srpen 10, 2021

This profile describes the key characteristics of working life in the Republic of Korea (South Korea). It aims to complement other EurWORK research by providing the relevant background information on the structures, institutions and relevant regulations regarding working life. This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, and equality and non-discrimination at work.

Key figures

Key figures

Comparative figures on working life in South Korea

 

2012

2019

Change in % and percentage points (pp), 2012–2019

 

South Korea

EU27

South Korea

EU27

South Korea

EU27

Real GDP per capita

22,106

25,700

26,731

28,600

20.9%

11.3%

Unemployment rate – total

3.2

10.5

3.8

6.3

0.6 pp

-4.2 pp

Unemployment rate – women

3.0

10.6

3.6

6.5

0.6 pp

-4.1 pp

Unemployment rate – men

3.4

10.4

3.9

6.1

0.5 pp

-4.3 pp

Unemployment rate – youth

9.0

23.3

10.4

14.3

1.4 pp

-9.0 pp

Employment rate – total

59.6

71.7

60.9

73.9

1.3 pp

2.2 pp

Employment rate – women

48.6

65.5

51.6

68.2

3.0 pp

2.7 pp

Employment rate – men

71.1

77.8

70.7

79.6

-0.4 pp

1.8 pp

Employment rate – youth

24.1

42.4

26.5

50.1

2.4 pp

7.7 pp

Sources: Korean Statistical Information Service – figures for South Korea; figures for real GDP per capita converted from US dollars to euro (all currency conversions carried out on 21 June 2021). Eurostat – Real GDP per capita, EU27 (chain linked volumes [2010], in euro) and percentage change 2012–2019(both based on tsdec100). Unemployment rate by sex (percentage of active population) and age (youth, aged 15 to 24), EU27 – annual average, % [une_rt_a]; Employment rate by sex and age – annual average, % [lfsi_emp_a].

Background

Background

Economic and labour market context

As a mature industrialised country, South Korea is a member of the Organisation for Economic Co-Operation and Development (OECD), the World Trade Organization, Asia-Pacific Economic Cooperation and the G20. Its main industries include electronics, telecommunications, automobile production, chemicals, shipbuilding and steel. However, services contribute more than half of the country’s gross domestic product (GDP). In 2017, 4.8% of the labour force worked in agriculture, 24.6% in industry and 70.6% in services. Unemployment stands at 3.7%, with a relatively high youth unemployment rate of 11.5%, while the working age population is disproportionately highly educated. The major issues with regard to the country’s labour markets are dualisation (i.e., different wage ‘tiers’ based on employment type) and polarisation (i.e., growing income gaps) resulting from neo-liberalist policies and an economic structure in which big businesses far outweigh small and medium-sized enterprises (SMEs). South Korea’s economy was harmed by the coronavirus disease 2019 (COVID-19) crisis but to a lesser extent than the economies of other countries, owing to the country’s relatively successful anti-COVID measures and a robust healthcare system.

Legal context

Some of the key items of labour legislation are listed below.

Key items of legislation regulating individual employment relationships include:

  • the Labor Standards Act
  • the Equal Employment Opportunity and Work–Family Balance Assistance Act
  • the Minimum Wage Act
  • the Act on the Guarantee of Employees’ Retirement Benefits

Key items of legislation on safety and health in the workplace include:

  • the Occupational Safety and Health Act
  • the Industrial Accident Compensation Insurance Act

Key items of legislation governing the collective dimension of labour law include:

  • the Trade Union and Labor Relations Adjustment Act
  • the Act on the Promotion of Employees’ Participation and Cooperation

A number of revisions, sometimes significant and sometimes less so, are made to nearly every instrument of labour law legislation and regulation each year in South Korea. The year 2019 was no exception. A complete overhaul of the Occupational Safety and Health Act was one of the most important changes to South Korean labour law in 2019.

The key legal instrument that sets out rules concerning industrial relations in South Korea is the Trade Union and Labor Relations Adjustment Act. The purpose of the act is, as stated in Article 1, ‘to maintain and improve the working conditions of workers and enhance their economic and social status by guaranteeing the rights of association, collective bargaining and collective action as prescribed in the Constitution, and to contribute to the maintenance of industrial peace and the development of the national economy by preventing and resolving industrial disputes through the fair adjustment of labour relations’. Under the act, trade unions and employer associations are the organisations empowered to represent workers and employers. Collective bargaining, industrial action and collective agreements are the main tools and mechanisms through which industrial relations and conflicts are managed.

Industrial relations context

During the early decades of the 20th century, Korea was colonised by Japan. In its invasions of China and Manchuria in the 1930s and 1940s, Japan used Korea, in particular the northern part of the peninsula, as a base camp for military action. Naturally, militarisation accelerated industrialisation in the region. Often disregarded by Japanese employers, Korean workers frequently engaged in organised struggle and protest, which formed part of a wider anti-imperialist campaign. While the northern part of the peninsula was becoming more industrialised, the southern part remained an agricultural economy. Korea was divided into two occupation zones, north and south, after the Second World War, and after the Korean War (1950–1953) the two regimes, socialist North Korea and capitalist South Korea, became firmly established during the Cold War era.

Following a military coup in 1961, South Korea accelerated its industrialisation. Throughout the 1960s and 1970s, with a strong state driven by a military regime intervening in and controlling the economy, South Korea achieved enormously rapid economic growth and dramatic industrialisation with an export-oriented strategy. Annual double-digit GDP growth was achieved during this time. From the mid-1970s, economic development plans resulted in the expansion of heavy industries such as chemicals, shipbuilding, automobile production and steel manufacturing.

However, this growth-oriented regime excluded and oppressed labour. Autonomous organisation and industrial action by workers were banned, with worker organisations disbanded or attacked politically by the authoritarian state. On the wave of democratisation in the 1980s and 1990s, industrial conflicts rose up, with industrial relations becoming more conflict-oriented, while the legacy of state intervention and worker oppression further constrained social partnership. The year 1987 saw a great rise in the labour movement, which swiftly transformed industrial relations. For a decade, until the Asian financial crisis in 1997, the nation was able to make gradual progress with regard to labour relations, partly as a result of increased pressure for greater democracy.

The shock of the crisis was enormous. As a remedy, the government accelerated the liberalisation of the national economy. In the name of global competitiveness, employment relationships became unstable and labour markets more deregulated (and thereby more polarised). Non-standard employment increased substantially. While unionised employees (those working in large enterprises and the public sector) benefited from collective bargaining, most workers were unable to have even their basic socioeconomic interests represented. Some of them became engaged in a struggle for both acknowledgement and representation. Consequently, industrial relations in South Korea are still characterised by conflict.

Actors and institutions

Actors and institutions

As in other democratic countries, the most important actors in industrial relations in South Korea are trade unions. Two trade union confederations lead the way: the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU). On the side of employers and businesses, the Korea Enterprises Federation (KEF) and the Korea Chamber of Commerce and Industry (KCCI) are currently the main actors in industrial relations. In government, the Ministry of Employment and Labour (MOEL) is responsible for managing industrial relations. In addition, the Economic, Social and Labour Council (ESLC), the institutionalised social dialogue body, plays a core role as a forum for and a facilitator of industrial relations; it has 17 members comprising representatives of the social partners and government and experts representing the public interest. Recently, some local governments have paid more attention to issues relating to employment and labour, even attracting investment to create jobs and creating inclusive labour policies in public organisations. In companies with more than 30 employees, a labour–management cooperation body with employee and employer representation must be established.

Public authorities involved in regulating working life

The MOEL is the major public authority responsible employment policies and industrial relations in South Korea. The ministry supports autonomous dispute settlements within the principles of the rule of law, addressing undesirable practices such as illegal strikes, and encouraging mutually beneficial and cooperative relationships between labour and management. It supervises the various standards that both workers and employers are to comply with, covering, for example, labour contracts, rest/holidays/leave, wages, retirement pay, employment relationships and dismissal. The MOEL also seeks to prevent industrial accidents by ensuring safe and pleasant working environments.

The MOEL establishes and coordinates employment policies and strategies, resolving mismatches in the labour markets through an advanced employment service, providing employment security programmes to prevent unemployment and promote employment, and working to create decent jobs by analysing the labour markets and implementing employment services and job creation programmes. It also aims to foster and oversee the employment service industry, formulating related policies and institutions, such as employment insurance policies. The ministry offers comprehensive support for skills development activities carried out by employers, jobseekers and employed people by providing financial subsidies and sharing the cost of facilities. It also seeks to create a culture of equality at work for women, people with disabilities, older people, young people and minors, foreign workers and others, and to build a society based on the spirit of togetherness.

Furthermore, MOEL is responsible for managing the ESLC, the comprehensive social dialogue body established under law at national level. The ministry also manages the regional concertation bodies, made up of representatives of the social partners and civil society, that have been established under the Economic, Social and Labour Council Act. The Korea Labour Foundation is also run under the auspices of the MOEL; it takes a softer approach, facilitating industrial cooperation and labour market innovation. Alongside the MOEL, the Ministry of Planning and Budget plays a substantive role in regulating labour markets and working conditions, since it distributes funds to each ministry.

Representativeness

The Act on the Establishment and Operation of the Economic, Social and Labour Council determines the representativeness of social partner organisations at national level as follows. On the workers’ side, the following are considered representative and may serve on the ESLC: (i) representatives of employee organisations that are national-level trade union associations and (ii) persons who are recommended by employee organisations that are national-level trade union associations and are requested by the chairperson to be appointed. On the employers’ side, the following are considered representative and may serve on the ESLC: (i) representatives of national-level employer organisations and (ii) persons who are recommended by national-level employer organisations and are requested by the chairperson to be appointed. Based on this act, the two national trade union confederations (the KCTU and the FKTU) usually represent workers, and the KEF and the KCCI are their counterparts representing employers.

Trade unions

About trade union representation

In South Korea, the right of workers to join trade unions, as a key constituent of the right to freedom of association, is guaranteed under the Constitution and more specifically the Trade Union and Labor Relations Adjustment Act. In particular, Article 33(1) of the Constitution explicitly in principle confers on workers ‘the right to independent association, collective bargaining and collective action’. Article 5 of the Trade Union and Labor Relations Adjustment Act confirms the constitutional right by stipulating that ‘workers shall be free to establish a trade union or to join it’ and the articles that follow elaborate on this statutory right. It is noteworthy, however, that the Constitution grants the rights to association, collective bargaining and collective action to only some groups of public officials designated in the Trade Union and Labor Relations Adjustment Act. Furthermore, it either restricts or denies the right to collective action of workers employed by important defence industries. The Act on the Establishment and Operation, etc., of Public Officials’ Trade Unions and the Act on the Establishment and Operation, etc., of Trade Unions for Teachers are the items of legislation that set out the details of these circumscribed rights.

Trade union membership and trade union density, 2012–2019

 

2012

2013

2014

2015

2016

2017

2018

2019

Source

Trade union density in terms of active employees (%) *

9.9

10.1

10.1

10.0

10.0

10.5

11.6

n.a.

OECD/AIAS ICTWSS database 2021

Trade union density in terms of active employees (%) *

10.3

10.3

10.3

10.2

10.3

10.7

11.8

12.5

MOEL

Trade union membership (1,000s) **

1,781

1,848

1,905

1,939

1,967

2,089

2,332

n.a.

OECD/AIAS ICTWSS database 2021

Trade union membership (1,000s) **

1,781

1,848

1,905

1,939

1,966

2,088

2,331

2,531

MOEL

Notes: * Proportion of employees who are members of a trade union among all employees;  ** Total number of trade union members (including self-employed workers and non-active union members, i.e. students, retirees and unemployed people) at national level. AIAS = Amsterdam Institute for Advanced Labour Studies; ICTWSS = Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts; n.a. = not available.

Sources: OECD/AIAS ICTWSS database 2021; MOEL

Main trade union confederations and federations

There are two trade union confederations in South Korea. The FKTU was the sole official and legal union federation under the two authoritarian regimes from the 1960s to the 1980s. With democratisation, employee organisations became differentiated (both in form and number) as the independent labour movement rose up. As a result of the wave of democratisation after the Great Workers’ Uprising of 1987, a new confederation was launched in 1995, the KCTU. The KCTU has acted as a more radical alternative organisation for workers, while the FKTU has pursued a moderate path of democratic reform. For the past three decades, the two confederations have competed and cooperated on representing workers’ interests in South Korea. The KCTU is more involved and powerful in collective bargaining and wage bargaining at enterprise level, while the FKTU is involved to a greater degree and more skilled in social dialogue at national level. The former is more oriented towards campaigning and social movements while the latter focuses on lobbying policymakers and participating in policymaking.

Main trade union confederations (in order of membership size)

Full name

Abbreviation

Members in January 2017

Members in December 2019

Involved in collective bargaining?

Korean Confederation of Trade Unions

KCTU

963,035

1,044,672

Yes

Federation of Korean Trade Unions

FKTU

954,546

1,018,358

Yes

Sources : KCTU and FKTU

Competition for membership between the two confederations has become fierce in recent years. While the FKTU has tried to defend its status as the primary union confederation (in terms of membership size), the KCTU has constantly increased its membership. In particular, the KCTU has made a strategic effort to organise non-standard workers. Facilitated by labour-friendly policies of the current government, the KCTU achieved the status of the country’s primary union confederation for the first time in 2019, which provoked the FKTU. Currently, the confederations organise more than one million workers each.

Since its establishment, the KCTU has strongly emphasised the principles of industrial unionism, seeking to overcome the limitations of enterprise unionism. The Korean Metal Workers’ Union, one of the largest affiliates of the KCTU, has quite successfully reformed its internal structure to move towards industrial unionism, although its bargaining behaviour has not fundamentally changed.

Cooperation between the KCTU and the FKTU is not frequent. Recently, in the public and semi-public sectors, some sector-level organisations belonging to the FKTU and the KCTU have worked together to jointly tackle policy issues.

Employer organisations

About employer representation

The Trade Union and Labor Relations Adjustment Act, the major legislation that governs labour relations in the country, does not contain many provisions regarding employer associations or members’ rights/obligations. The act merely defines an employer association as ‘an organization of employers which has powers to adjust or control its members in connection with labor relations’ (Article 2(3)). Article 29 of the act declares that an employer association, as a counterpart to the representative of a trade union, retains the authority to bargain and sign a collective agreement for its members. Article 30 further requires those with such authority to exercise it in good faith and sincerity. Other than these provisions, the act remains largely silent on the details of the legal relationship between an employer association and its members for the purpose of collective bargaining and other collective relations. Owing to the insufficient and underdeveloped legal rules, as well as the predominant practice, with a long history of enterprise-level collective bargaining, there has been no meaningful advance in formulating legal and actual relationships involving employer associations. However, it is worth noting that in South Korea business associations as interest groups have been far more active, and often successful, in representing the voice of their industries and protecting their interests at nearly all stages of policymaking than employer associations have been in collective bargaining. In this regard, many have recently expressed the view that such business associations should be deemed employer associations under labour law, imposing on them the legal responsibilities arising from that under the Trade Union and Labor Relations Adjustment Act.

Main employer organisations and confederations

The table below provides information on the main employer associations in South Korea.

Main employer organisations and confederations (in order of founding date)

Full name

Abbreviation

Members

Year established

Involved in collective bargaining?

Korea Chamber of Commerce and Industry

KCCI

180,000+ (in 73 chambers)

1884

No

Korea International Trade Association

KITA

70,000+

1946

No

Korea Federation of SMEs

KBIZ

658,949

1962

No

Korea Enterprises Federation

KEF

4,307

1970

Yes

Federation of Middle Market Enterprises of Korea

FOMEK

722

1992

No

Source: KEF, KCCI, KITA, KBIZ and FOMEK

Established in 1970, KEF is a business organisation that represents employers of all sizes in South Korea. KEF is funded by its more than 4,000 member companies. It aims to create an environment conducive to business and enhance South Korea’s national competitiveness by building cooperative and reasonable industrial relations. KCCI was established in 1884 as a public legal person by a special act. It represents 180,000 member companies, which include domestic and foreign-invested companies. Internationally, KCCI is an active member of the International Chamber of Commerce and the World Chambers Federation. KBIZ was established in 1962 to represent the rights and interests of South Korean SMEs. It is a non-profit legal entity, founded on the basis of the Small and Medium Enterprise Cooperatives Act of 1961. The organisation’s main functions are making policy proposals to the South Korean government on behalf of its 72,000 SME members and helping SMEs boost competitiveness. KITA was founded in 1946 with the objective of advancing the South Korean economy through trade; it is a major business organisation in South Korea, with over 70,000 members. As an advocate of international trade, KITA serves a diverse range of functions, including providing comprehensive policy support and addressing trade-related issues experienced by South Korean businesses. FOMEK was first established under the name the Korean Businessmen Association in 1992. FOMEK endeavours to foster and develop South Korean middle market enterprises (MMEs), and in 2014 it was officially launched as a legal entity to represent 600 MMEs.

Tripartite and bipartite bodies and concertation

Main tripartite and bipartite bodies

The ESLC plays a critical role as a symbolic and substantive forum for social dialogue in South Korea. It is a tripartite body and a presidential advisory committee. Its predecessor, the Korea Tripartite Commission (KTC), was established in 1998 with the aim of creating social consensus during the severe economic crisis taking place at that time. In 2007, the KTC was replaced by the Economic and Social Development Tripartite Commission, a reformed version of the KTC. However, it was inactive for a decade under two conservative governments.

In 2018, the tripartite actors were actively engaged in social dialogue to rebuild the tripartite body under the initiative of the new government after the candlelight protests of 2016–2017, and they reached agreement on establishing the ESLC with the aim of tackling social polarisation. The most significant difference between the ESLC and its predecessors is its expanded membership. While tripartite actors maintain their central status, the ESLC also includes members representing the interests of vulnerable social groups among employers and workers. It also provides further impetus to establish sector-level social dialogue therein.

This ‘tripartism plus’ system, however, has not always functioned smoothly; there were further conflicts among the different groups in the early stages of the new institution in 2019, immediately after the launch of the ESLC in November 2018. The biggest problem, shared by its predecessors, was that the ESLC failed to persuade the KCTU to join it. The KCTU, the biggest union confederation, does not participate in the institutionalised social dialogue bodies at either national or local level.

At local level, social dialogue bodies – referred to as local cooperation bodies among labour, management, civil actors and government – have been established. Of these local social dialogue bodies, which number 130, only 20% are active. Owing to a lack of institutional resources and actors’ capacities, it has been hard to activate local-level social dialogue.

In addition to the national- and local-level social dialogue bodies mentioned above, South Korea has two further significant social dialogue bodies. One is the Minimum Wage Commission, which decides annually on the increase in the minimum wage. The other is the labour–management cooperation body, which must be established in all workplaces with more than 30 employees and participate quarterly in bipartite dialogue.

Main tripartite and bipartite bodies

Name

Type

Level

Issues covered

Economic, Social and Labour Council

Tripartite

National

Comprehensive (usually labour laws and policies)

Minimum Wage Commission

Tripartite

National

Increase in the minimum wage (annually)

Labour–management cooperation body

Bipartite

Enterprise (over 30 employees)

Wide-ranging issues in the workplace (not wage bargaining)

Local cooperation body among labour, management, civil actors and government

Tripartite plus

Local

Broad and ad hoc (usually on local employment issues)

Source: Authors

Workplace-level employee representation

Regulation, composition and competences of the bodies

Regulation

Composition

Competences of the body, including involvement in company-level collective bargaining

Thresholds/rules – when the body needs to be/can be set up

Trade union under the Trade Union and Labor Relations Adjustment Act

A trade union is an organisation or group of associated organisations of workers. There are no statutory requirements on the minimum number of worker members. However, an organisation will not be regarded as a trade union (i) where an employer or other person who always acts in the interest of the employer is allowed to join it or (ii) where those who are not workers are allowed to join it

Retains the authority to bargain and make collective agreements for its members. The level on which collective bargaining is predominantly done in South Korea is the company or workplace. Thus, trade unions are involved in company-level collective bargaining

It is not mandatory to set up a trade union, which is a voluntary organisation

Labour–management cooperation body under the Act on the Promotion of Employees’ Participation and Cooperation

This body must be composed of the same number of members representing workers and employers (that number being not fewer than three but not more than ten persons). Worker members are to be elected by workers, and if a trade union composed of a majority of workers is available, the worker members must represent of the trade union or be persons nominated by the trade union

Retains the competence to consult on matters such as recruitment, placement, education and training of workers; settlement of workers’ grievances; safety, health and improvement of other aspects of the working environment, and promotion of workers’ health; general rules on employment adjustment regarding staff redeployment, retraining or dismissal for managerial or technological reasons; administration of working hours and rest hours.

Also retains the competence to make resolutions with respect to matters such as the establishment of an in-house employee welfare fund

A labour–management cooperation body must be established in any business or workplace that is vested with the right to decide on working conditions and employs 30 or more people on a regular basis

‘A person who represents more than half of the employees at the business or workplace’ or ‘labour representative’ under the Labor Standards Act

An employee

Retains the competence, for instance, to be informed of, consult on and/or make a written agreement with respect to dismissal for managerial reasons, flexible working hours, selective working hours, extended work, time off in lieu, etc., as required by the Labor Standards Act

It is mandatory to elect a labour representative when addressing certain issues specified in the Labor Standards Act

Source: Authors, based on Korean Law Information Centre

Collective bargaining

Collective bargaining

The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in South Korea.

Bargaining system

The bargaining system in South Korea is highly decentralised. Most bargaining takes place at enterprise level, with unions and employers making decisions on various fundamental issues relating to working conditions. Collective agreements are legally binding. Employers are punished if they do not keep agreements with unions. Many unions have endeavoured to undertake collective bargaining at sectoral rather than enterprise level. However, employers are highly reluctant.

In South Korea, a collective agreement is a legally binding instrument that governs the legal relationship between individual employees and their employer, as well as that between a trade union and the employer. The Trade Union and Labor Relations Adjustment Act guarantees the legal status and effect of a collective agreement as a source of labour law by stipulating in Article 33(1) that any part of rules of employment or an employment contract that is in breach of standards concerning working conditions and other treatment of workers prescribed in a collective agreement is null and void. Matters not covered in an employment contract and aspects made null and void under Article 33(1) are to be governed by the standards set out in the collective agreement (Article 33(2)).

Wage bargaining coverage

Collective wage bargaining coverage of employees (%), 2012–2018

Level

2012

2013

2014

2015

2016

2017

2018

All levels

12.8

12.8

12.9

12.7

12.8

13.3

14.8

Source: OECD/AIAS ICTWSS database 2021

Bargaining levels

Levels of collective bargaining, 2019

 

National level (intersectoral)

Sectoral level

Company level

 

Wages

Working time

Wages

Working time

Wages

Working time

Principal or dominant level

       

X

X

Important but not dominant level

           

Existing level

X

 

X

X

   

Source: OECD/AIAS ICTWSS database 2021

Industrial action and disputes

Industrial action and disputes

Legal aspects

In South Korea, the Constitution confers upon workers the right to collective action along with the rights to independent association and collective bargaining. In fleshing out the constitutional right to collective action of workers, the Trade Union and Labor Relations Adjustment Act defines industrial action as ‘actions or counter-actions which obstruct the normal operation of a business, such as strikes, sabotage, lock-outs, and other activities through which the parties to labour relations intend to accomplish their claims’. In other words, workers’ right to participate in industrial action is recognised and respected by the Constitution and legislation. As the act indicates, the three most important types of industrial action are strikes, sabotage and lock-outs. While the first two can be carried out only by workers, lock-outs are a defensive action that only employers can take, in response to workers’ collective action, namely strike or sabotage, to a proportionate extent.

Industrial action developments

Industrial action developments in South Korea, 2012–2018

 

2012

2013

2014

2015

2016

2017

2018

Working days lost per 1,000 employees

52.7

35.1

34.7

23.2

104.1

43.2

27.5

Number of strikes

105

72

111

105

120

101

134

Workers involved (1,000s)

134

113

133

77

226

129

81

Working days lost to industrial action (1,000s)

933

638

651

447

2,035

862

552

Sources: 2020 KLI labour statistics; MOEL White Paper

Dispute resolution mechanisms

Collective dispute resolution mechanisms

The term ‘industrial disputes’ covers disputes over ‘matters of interest’ and those over ‘matters of rights’. While the former refers to disputes over future employment terms and conditions, the latter concerns legal disputes. The Trade Union and Labor Relations Adjustment Act (Article 2(5)) defines ‘[collective] industrial disputes’ in the former sense as meaning

any controversy or differences arising from disagreements between a trade union and an employer or employers’ association ... with respect to the determination of terms and conditions of employment such as wages, working hours, welfare, dismissal, and other treatments. In such cases, the disagreements refer to situations in which the parties to labour relations are no longer likely to reach an agreement by means of voluntary bargaining even if they continue to make such an attempt.

A dispute over matters of interest could be resolved, first, through a public mediation service provided by a mediation committee of a regional labour relations commission and, if no resolution is reached, then through industrial actions such as strike, sabotage and lock-out. Where the term ‘collective industrial dispute’ is used in a broad sense to refer to a dispute over legal issues between a trade union and an employer or employers’ association, such a dispute may be addressed by adjudication services provided by an adjudication committee of a labour relations commission and/or through civil actions before courts.

Arbitration requests filed with the National Labour Relations Commission, 2012–2019

Year

Number of mediation requests

Mediation rate *

Dispute resolution rate **

Number of relief requests

Number of administrative lawsuits

2012

752

61.9

96.8

11,021

352

2013

762

65.0

96.5

12,271

443

2014

886

55.1

97.0

12,662

384

2015

877

53.8

96.4

12,140

415

2016

822

58.3

95.4

10,823

457

2017

863

58.6

95.6

10,739

449

2018

1,160

49.0

95.7

12,041

488

2019

1,291

47.6

95.5

14,323

639

Notes: * Mediation rate = number of requests accepted ÷ (number of requests accepted + number of requests denied) × 100; ** Dispute resolution rate = (number of relief requests - number of administrative lawsuits filed) ÷ number of relief requests × 100.

Sources: KLI 2020 labour statistics; National Labour Relations Commission

Individual dispute resolution mechanisms

In South Korea, the term ‘individual industrial disputes’ means a dispute between an employee and an employer over their rights and obligations under an employment contract, rules of employment, a collective agreement, the Labor Standards Act and/or another relevant statutory law. Such rights and obligations are concerned with the terms and conditions of employment, such as wages, working hours, leave, dismissal/disciplinary action or fringe benefits. While civil actions before civil courts are the primary dispute settlement mechanisms, an adjudication committee of a regional labour relations commission or the National Labour Relations Commission can provide a swift and less expensive conflict resolution forum for employees as an administrative/quasi-judicial mechanism in relation to certain legal matters such as unfair dismissal. A party disagreeing with the decision of the National Labour Relations Commission may appeal to the Administrative Court.

Individual employment relations

Individual employment relations

Start and termination of the employment relationship

Requirements regarding an employment contract

In South Korea, the minimum working age is 15. Article 64 of the Labor Standards Act provides that, unless the MOEL issues him or her with an employment permit certificate, a minor under the age of 15 (including any minor under the age of 18 who attends middle school under the Elementary and Secondary Education Act) must not be employed in any work. Such a certificate can be issued only at the request of the minor himself or herself (i.e., not at the request of his or her parent or any other person) and only if the employment would not impede compulsory education, and the certificate must designate the kind of work involved. When forming or modifying an employment contract, and regardless of whether or not the employee has requested it, an employer must provide a written statement specifying wages, contractual work hours, holidays, annual paid leave and further details on wages (constituent items, calculation methods and payment methods). A breach of this obligation is subject to a fine (a criminal penalty); however, an employment relationship can still be entered into without any formal requirements merely by the fact that an employee provides labour, and the employer accepts and pays for it. An employment contract may be an implied contract.

Dismissal and termination procedures

When an employer intends to dismiss an employee (including for management reasons), they must give the employee notice of dismissal of at least 30 days. It is also required that the employer notify the employee in writing of the grounds for and timing of the dismissal. If the employer fails to give such advance notice, they must pay the employee at least 30 days’ ordinary wages. However, there are some exceptions to this rule, for example for employees having worked for the employer continuously for less than three months. It is worth noting that these are merely the statutory (minimum) procedural requirements under the Labor Standards Act (Articles 26 and 27). Therefore, where relevant dismissal and termination procedures with higher or more preferential standards for the employee are set out in other applicable sources of law, such as the employment contract, a collective agreement or rules of employment, the employer must comply with them for the dismissal to be effective.

Entitlements and obligations

Parental, maternity and paternity leave

Statutory leave arrangements for employees in South Korea are set out mainly in the Labor Standards Act and the Equal Employment Opportunity and Work–Family Balance Assistance Act. Whether leave is paid and how long the maximum duration is varies for each type of leave arrangement. Some trends observed over time include new categories of statutory leave arrangements having been introduced and some existing arrangements becoming more generous to employees, for example unpaid leave becoming paid leave or the maximum duration being extended.

Statutory leave arrangements

Maternity leave

Maximum duration

90 days. An employer must grant a pregnant woman a total of 90 days’ maternity leave (120 days’ maternity leave if she is pregnant with two or more children) before and after childbirth. In such cases, at least 45 days (60 days if the woman is pregnant with two or more children) of the leave period must be taken after childbirth.

Reimbursement

The whole period of maternity leave must be paid (up to 90 days). The amount of the reimbursement during the first 60 days of leave is the ordinary wage of the employee taking the leave. The same amount of reimbursement is to be provided for the last 30 days of leave unless the amount for a month exceeds KRW 2 million (€1,485) (thus a cap of KRW 2 million per month is set).

Who pays?

The employer must pay for the first 60 days of leave (ordinary wage) and the Government (the Employment Insurance Fund) for the last 30 days. However, where an employer falls within the category of ‘enterprises eligible for preferential support’ under Article 12 of the Enforcement Decree of the Employment Insurance Act, and at the request of the employee taking the leave, the Government is to provide the employer with financial support of up to KRW 2 million (€1,485) per month. The employer is obliged to make up the difference between that sum and the employee’s ordinary wage for the month.

Legal basis

Article 74 of the Labor Standards Act; Article 18 of the Equal Employment Opportunity and Work–Family Balance Assistance Act; Articles 75–77 of the Employment Insurance Act; Article 12 of the Enforcement Decree of the Employment Insurance Act

Paternity leave

Maximum duration

10 days. Where an employee requests leave on grounds of his spouse’s childbirth (paternity leave), the employer must grant up to 10 days’ leave. In such cases, the employee is to be paid for the period of leave used.

Reimbursement

The whole period of paternity leave taken must be paid (up to 10 days). The amount of the reimbursement during the first five days of leave is the ordinary wage of the employee taking the leave. The same amount of reimbursement is to be provided for the last five days of leave unless the amount for the days exceeds KRW 382,770 (€284) (thus a cap of KRW 382,770 per five days is set).

Who pays?

The employer must pay the employee the ordinary wage for the whole period of leave taken. However, at the request of the employee taking the leave, the Government is to provide financial support to the employer (up to KRW 382,770 (€284) for five days).

Legal basis

Article 18-2 of the Equal Employment Opportunity and Work–Family Balance Assistance Act.

Source: Authors, based on Korean Law Information Centre

Sick leave

South Korea does not have statutory sick leave. It is thus often the case that employees in South Korea have to take their annual paid leave when unable to work due to injury/illness, unless their employment contract, rules of employment and/or a collective agreement provide otherwise. The only exception is leave under the Infectious Disease Control and Prevention Act. A patient with an infectious disease such as COVID-19 or a person suspected of having such a disease may be ordered to be hospitalised or to self-isolate under the act. Where that person is an employee, their employer may grant them paid leave during the period of hospitalisation or self-isolation, in addition to the paid leave provided for in Article 60 of the Labor Standards Act. In such cases, if the cost of granting paid leave is subsidised by the state, the employer must allow the paid leave (Infectious Disease Control and Prevention Act, Article 41(2)1). Furthermore, an employer may not dismiss, or otherwise treat unfavourably, an employee because of such paid leave (Infectious Disease Control and Prevention Act, Article 41(2)2).

Retirement age

Article 19(1) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion requires that employers set the retirement age of their employees at 60 years or older. Article 19(2) of the act further invalidates the part of any contract of employment, rules of employment or collective agreement that sets the retirement age below 60 and deems retroactively that the age has been set at 60 from the outset. Under Article 20(1) of the act, any employer who employs a specific number of workers or more as prescribed by presidential decree (currently 300 employees) is obliged to submit to the Minister for Employment and Labour details of the retirement age system in operation in the enterprise, as prescribed by ordinance of the MOEL.

Pay

Pay

Minimum wages

A minimum wage was adopted in South Korea in 1986. It is a statutory minimum wage that is applied nationwide without exception or variation. The Minimum Wage Commission, which is managed by the MOEL, sits annually. The commission is a tripartite consultation body comprising 27 members drawn proportionally from workers, employers (businesses) and experts representing the public interest, 9 members from each side. The topic is so highly controversial that all parties rarely reach agreement as a result of the bargaining round. Due to frequent labour–management stalemates as regards the minimum wage, it is normally the expert members that seek to break the stalemate by proposing a compromise. Then, in practice, one side accepts the proposal, while the other withdraws, and the Commission as a whole decides a minimum wage proposal to submit to the Minister of Employment and Labour. The minister is responsible for announcing the rate for the following year. The bargaining round takes place in spring and the results are announced in summer.

Minimum wage, hourly rate in KRW, 2015–2021

 

2015

2016

2017

2018

2019

2020

2021

Rate (for both adults and youth)

5,580

6,030

6,470

7,530

8,350

8,590

8,720

Note: 1 € = KRW 1,347.

Source: Minimum Wage Commission

Working time

Working time

Working time regulation

At individual level, all employers must state to their employees their contractual working hours in writing on entering into an employment contract (Article 17 of the Labor Standards Act). At company level, an employer who regularly employs 10 or more employees must also prepare rules of employment that specify, among other things, the start and end times of work and number of breaks (Article 93 of the Labor Standards Act). Contractual working hours, whether agreed by an individual employment contract or prescribed by rules of employment, as well as actual hours worked, must not exceed 8 hours per day or 40 hours per week, excluding breaks. In calculating working hours, any waiting time or time spent by employees under the direction and supervision of their employers that is necessary for the relevant work is deemed working time (Article 50 of the Labor Standards Act). Complying with the statutory minimum conditions noted above is compulsory, but a collective agreement, where in force and applicable, may also regulate matters concerning working time. Such an agreement takes precedence over the employment contract and the rules of employment concerned unless either of those two provides more favourable terms and conditions (Article 33 of the Trade Union and Labor Relations Adjustment Act).

Overtime regulation

Overtime is defined as the hours worked exceeding the statutory maximum number of working hours, namely 8 hours per day and 40 hours per week. Overtime up to 12 hours per week may be lawful upon mutual agreement between the employer and the employee. Overtime longer than 12 hours per week may exceptionally be permitted with the approval of the Minister for Employment and Labour in addition to mutual agreement between the employer and all the employees concerned (Article 53 of the Labor Standards Act). Although it is lawful, employers may be discouraged from having employees work overtime by the statutory rule that requires that employers pay an additional 50% or more of ordinary wages for overtime worked. This is also the case for night work and holiday work (Article 56 of the Labor Standards Act). Employers and employees are free to formulate their employment contract and/or rules of employment to provide more favourable terms and conditions for the employees than those set out in the Labor Standards Act.

Part-time work

A part-time employee is defined in Article 2 of the Labor Standards Act as an employee whose contractual work hours per week are shorter than those of a full-time employee engaged in the same kind of work at the workplace concerned. The Act on the Protection, etc. of Fixed-term and Part-time Employees is the primary legislation that governs matters with respect to the rights and protection of part-time employees. Part-time employees and their employer, or a trade union representing them and their employer, are free to establish the terms and conditions of employment through an employment contract or a collective agreement, respectively. However, such employment contracts and collective agreements for part-time employees are valid only if they do not breach of the rules and principles set out under the act. For instance, Article 8(2) of the act prevents discrimination against part-time employees, stating that no employer can provide discriminatory treatment to any part-time employee on the ground of his or her employment status compared with full-time employees engaged in the same or similar kinds of work at the business or workplace concerned. Thus, part-time employees are entitled to labour standards proportionally equal to those that comparable full-time employees enjoy.

Persons employed part-time in South Korea and EU27 and the UK (% of total employment), 2012–2019

 

2012

2013

2014

2015

2016

2017

2018

2019

Total (EU27 and the UK)

18.6

19

19

19

18.9

18.7

18.5

n.a.

Total (South Korea)

10.2

10.2

10.7

11.5

12.6

13.3

13.5

15.4

Women (EU27 and the UK)

31.4

31.8

31.7

31.5

31.4

31.1

30.8

n.a.

Women (South Korea)

17.3

17.2

17.7

18.3

20.6

21.6

22.2

25.2

Men (EU27 and the UK)

7.7

8.1

8.2

8.2

8.2

8.1

8

n.a.

Men (South Korea)

4.9

5.0

5.4

6.2

6.4

6.8

6.6

7.4

Note: n.a.= not available.

Sources: Eurostat Labour Force Survey [lfsi_pt_a] – persons employed part-time (20 to 64 years of age) – total and by sex; KLI 2020 labour statistics; Statistics Korea, Supplementary Survey on the Economically Active Population.

Night work

The Labor Standards Act (paragraph 3 of Article 56) defines night work as ‘work performed between 10:00 p.m. and 6:00 a.m. of the next day’.

Shift work

There is no statutory definition of shift work, and there is no definition established by case law. However, there appears to be a generally agreed understanding of shift work, whether in a legal context or in daily use, whereby employees work in two or more groups, and each group succeeds each other at the same work stations. Thus, it is effectively identical to the definition provided in the EU Working Time Directive: ‘any method of organising work in shifts whereby workers succeed each other at the same work stations according to a certain pattern, including a rotating pattern, and which may be continuous or discontinuous, entailing the need for workers to work at different times over a given period of days or weeks’(Article 2.1).

Weekend work

Article 55(1) of the Labor Standards Act guarantees at least one paid day of holiday per week on average. The article also guarantees employees paid public holidays, the dates of which are fixed. However, the article does not stipulate that the weekly rest day must be a Saturday or Sunday. Under the current legislation, it is lawful to have employees work five or six days a week, including the weekend, and take a holiday on any weekday. Nonetheless, it is more common in practice to work during weekdays and rest at the weekend, one day of which is paid.

Rest and breaks

The Labor Standards Act employs the terms ‘holiday’ (for time off) and ‘recess’ (for breaks), although the English translation is not official. Recess hours may be freely taken by employees, therefore do not count as working time. Article 54(1) stipulates that an employer must allow employees a recess of not less than 30 minutes for each four hours or work or a recess of not less than one hour for each eight hours of work. In addition, as noted above, employees must be guaranteed at least one paid weekly rest day on average and paid public holidays, during which they have no (contractual) obligation to work.

Working time flexibility

Under the title ‘Flexible work hours system’, Article 51(1) of the Labor Standards Act allows an employer to unilaterally extend weekly and/or daily work hours (40 hours or less and 8 hours or less, respectively) to the extent that average work hours per week during a certain period of not more than two weeks do not exceed 40 hours per week, as long as work hours in any particular week do not exceed 48 hours. Subject to written agreement with the labour representative (the trade union, if it represents more than half of the employees), the Labor Standards Act permits an employer to establish and run more flexible working time arrangements. By ‘more flexible’, the act means (i) a longer reference period of three or six months, rather than two weeks; and (ii) longer maximum working hours per day of 52 hours, rather than 48 hours. While the flexible work hours system may be introduced mainly in the interest of employers, the act also sets out some other systems for working time flexibility that are more likely to favour employees. These include, for instance, the selective work hours system, in which employees may decide on their own start and end times for work pursuant to the rules of employment (including other rules equivalent thereto) and may extend their weekly working hours to more than 40 hours and their daily working hours to more than 8 hours as long as average work hours per week during the period of adjustment, limited to a month, do not exceed 40 hours per week.

Health and well-being

Health and well-being

Health and safety at work

The primary statute governing matters relating to safety and health at work is the Occupational Safety and Health Act (OSHA), and the MOEL is responsible for enforcing the act, mainly through labour inspectors. The OSHA went through a complete set of revisions, with the revised act promulgated in December 2019 and entering into force on 16 January 2020. The purpose of the revisions was, first, to expand the scope of statutory protection to ‘persons who provide labour in various types of work arrangements’ and, second, to create a safe and healthy work environment for them, taking into account recent changes in how work is carried out in the workplace. The OSHA seeks to achieve that goal by obligating employers to set up a system to effectively manage occupational safety and health issues. This requires employers, for example, to prepare precautionary measures in dealing with harmful and dangerous equipment, facilities, materials, working environments and so on, and to periodically provide workers with the necessary safety and health training to prevent industrial accidents.

With some tragic, serious industrial accidents continuing to take place, and leading to workers’ deaths, however, the Fatal Accidents Penalty Act (FAPA) has been drafted and is to be implemented and enforced from 26 January 2022. There are many features in the FAPA that are worth attention. These include, first, its scope of application, which includes not only serious occupational accidents in the workplace but also fatal civil accidents. Second, as the title makes clear, the FAPA is intended to criminally punish employers, managers and corporations for accidents when they are in breach of the obligation to implement the set of measures specified by the relevant statutes. Overall, it can be stated that, while the OSHA focuses more on ex ante measures to prevent occupational accidents from occurring, the FAPA adopts ex post measures to hold employers criminally liable for such accidents.

Accidents at work resulting in four days’ absence or more, 2010–2018

 

2010

2011

2012

2013

2014

2015

2016

2017

2018

All accidents

98,645

93,292

92,256

91,824

90,909

90,129

90,656

89,848

102,305

Per 1,000 employees

6.9

6.5

5.9

5.9

5.3

5.0

4.9

4.8

5.4

Non-fatal major accidents

89,459

84,662

83,349

82,803

81,955

80,999

81,548

79,449

89,588

Working days lost

56,708

54,777

54,521

52,757

48,398

47,539

47,035

47,355

52,758

Sources: KLI labour statistics; MOEL, Status on Industrial Accidents

Psychosocial risks

The OSHA aims to ‘maintain and promote the safety and health of those who provide labour’ by ‘establishing standards on industrial safety and health and clarifying where the responsibility lies, and creating a comfortable working environment’. In this act, ‘safety and health’ includes psychological and mental aspects, and it contains some provisions clearly addressing psychosocial risks at work. For instance, Article 5 of the OSHA declares that business owners have an obligation to reduce the mental and psychological stress of their employees. Article 669 of the Rules on OSH Standards breaks down this obligation into specific duties such as analysing and evaluating causes of job stress and preparing solutions, and providing workers with sufficient information on their medical check-ups and placing them in accordance with the causes of their job stress and the medical risk posed by their health condition.

Article 41 of the OSHA focuses on workers who interact with customers, face to face or over the phone. In particular, it requires that employers take the necessary measures to protect their workers from verbal abuse, assault or any other inappropriate behaviour by customers that would cause those workers physical or psychological pain or damage (paragraph 1). In other words, a worker may ask his or her employer or the business owner to take such measures and the employer or business owner can neither dismiss the worker nor treat him or her unfavourably on the basis that he or she has made this request. Growing attention to psychosocial risks at work can also be found in cases regarding industrial and occupational accidents. Recently, there has been an increasing tendency for the courts to find a proximate causal relation between a worker’s job and an accident or the worker’s death where mental stress is involved. This is the case in particular when a worker has committed suicide.

Equality and non-discrimination at work

Equality and non-discrimination at work

The Constitution of the Republic of Korea provides in Article 11(1) that ‘all citizens shall be equal before the law, and there shall be no discrimination in political, economic, social or cultural life on account of sex, religion or social status’. There are a number of items of legislation and statutory instruments that elaborate on this constitutional right and create a legal basis for its enforcement. The National Human Rights Commission Act addresses the principle of equal treatment in the most comprehensive manner. However, in an employment context, many labour laws and regulations provide stronger enforcement mechanisms. For example, the Labor Standards Act recognises the principle of equal treatment and prohibits employers from discriminating against employees on the basis of gender and applying discriminatory treatment in relation to terms and conditions of employment on the ground of nationality, religion or social status.

In addition, there are several individual acts focusing on each ground for discrimination. Examples include the Equal Employment Opportunity and Work–Family Balance Assistance Act (gender, marriage status, pregnancy/childbirth, etc.); the Act on the Prohibition of Discrimination against Persons with Disabilities, Remedy against Infringement of Their Rights, etc.; the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion; the Act on the Protection, etc. of Fixed-term and Part-time Employees; and the Act on the Protection, etc. of Temporary Agency Workers.

The courts have general jurisdiction to hear and decide on such matters. Other than the courts, there are also some public bodies that are responsible for and entrusted with enforcing the law, such as the National Labour Relations Commission (and regional labour relations commissions) and the National Human Rights Commission, although the latter’s recommendations are not legally binding or enforceable.

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