"Preventing Temporary Leave Workers and Unemployed from Falling into Unemployment"… Government Prioritizes Support for Employment-Retaining Companies

1.6 Million Temporary Leave Workers in March, Record High
Unemployment Surge Expected if Corporate Management Worsens
Business Community: "Government Must Propose Support Measures First"

On the 10th, unemployment benefit applicants are receiving explanations from officials at the Unemployment Benefit Briefing Session held at the Western Employment Welfare Plus Center in Mapo-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Bo-kyung] The government is expanding the principle of "priority support for companies maintaining employment" to various policies to prevent a massive unemployment crisis caused by the impact of the novel coronavirus infection (COVID-19).

A senior government official said in a phone interview with Asia Economy on the 20th, "The government is continuously focusing on maintaining employment while implementing COVID-19 response policies," adding, "Going forward, companies that maintain employment based on labor-management agreements will be given priority support." He said, "We have established a principle that if both labor and management make concessions to maintain employment, the government will actively support them, and we plan to reflect this principle in various policies. We hope that labor and management will actively play their roles so that temporary leave workers do not fall into unemployment."

According to Statistics Korea's "March Employment Trends," the number of temporarily laid-off workers last month reached 1,607,000, the largest scale since statistics began. However, since these workers were included in the employed population, the number of unemployed actually decreased by 17,000 compared to a year ago. If corporate management difficulties continue, there is a high possibility that layoffs and restructuring will be pushed forward, causing a surge in unemployment. Accordingly, the government aims to prevent mass unemployment in advance by applying the principle of prioritizing support for companies maintaining employment.

Asia Economy DB=Photo by Honam Moon munonam@

Accordingly, when the government announces additional support measures, companies maintaining employment are expected to be prioritized as recipients of support. For example, if the government announces support measures for the aviation industry, Asiana Airlines, which decided to implement unpaid leave for all employees for more than 15 days a month, is more likely to receive government support first than Eastar Jet, which has started restructuring about 300 employees. Asiana Airlines operated this month with effectively half of its workforce by using unpaid leave.

The government has judged that labor-management harmony is essential to overcome the economic recession caused by COVID-19 and stabilize the labor market. To prevent labor disputes due to inevitable wage reductions and to implement leave, shutdowns, and flexible working systems, labor-management coexistence is more important than ever. On the 18th, Prime Minister Chung Sye-kyun met with Kim Myung-hwan, chairman of the Korean Confederation of Trade Unions (KCTU), emphasizing that it is time for labor, management, and government to cooperate to maintain employment. At this meeting, the KCTU demanded a nationwide ban on layoffs and livelihood guarantees for vulnerable groups and proposed the formation of a one-point emergency tripartite consultative body to discuss these issues. Regarding this, a government official said, "There is no legal basis to ban layoffs. It is not something that can be done by creating a law," adding, "Whether through a separate consultative body or other means, we will explore various ways for labor and management to reach an agreement."

The business community holds the view that the government should first present employment maintenance support measures. The Korea Economic Research Institute announced "10 major employment policy tasks to prevent mass unemployment," recommending to the government ▲support job-seeking benefits for unpaid leave workers for three months ▲apply low-interest loans in the 1% range for loan applications to pay employee salaries ▲add special employment support industries. The government plans to hold the 5th Emergency Economic Meeting this week and announce a "Employment Stability Policy Response Package," drawing attention to whether these recommendations will be reflected.

Meanwhile, the Economic, Social and Labor Council, in which the Federation of Korean Trade Unions (FKTU) participates, is also brainstorming additional measures. On the 14th, a tripartite meeting for the aviation industry was held to overcome the COVID-19 crisis and discuss issues of aviation industry partner companies. On the 24th, labor, management, and government will meet again to check the damage status of the construction industry and seek ways to overcome the crisis.

This content was produced with the assistance of AI translation services.