Excluding Minju No Chong... Labor-Management-Government Agree on Overcoming COVID-19 "Funding and Implementation Issues Remain"

The Tripartite Commission to Hold Main Committee Meeting on the 28th to Approve Labor-Management-Government Agreement
Expansion of Employment Retention Measures... Introduction of Nationwide Employment Insurance System
"KCTU's Rejection of Ratification Raises Uncertainty Over On-Site Implementation"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] It has been a long journey. It has been just over a month since the failure of the tripartite agreement to overcome the novel coronavirus disease (COVID-19) crisis on the 1st of this month. The social grand compromise, which was to be achieved for the first time in 22 years, ultimately collapsed due to the absence of the Korean Confederation of Trade Unions (KCTU). The government has prepared additional measures to prevent employment instability, such as extending the payment of employment retention subsidies and introducing nationwide employment insurance, and both labor and management have agreed to share the burden of pain.

The Economic, Social and Labor Council (ESLC), a social dialogue body, held a plenary session on the 28th with President Moon Jae-in in attendance, deliberating and resolving 11 agenda items including the 'Tripartite Agreement to Overcome the COVID-19 Crisis.' This was the first time President Moon attended a plenary session since the ESLC’s inauguration ceremony in November 2018. Previously, Prime Minister Chung Sye-kyun led a one-point tripartite dialogue to overcome COVID-19, but after twists and turns, the outcome was realized at the ESLC, a presidential advisory body. It was expected that the tripartite parties, including the two major trade unions, would agree on national crisis response measures for the first time since the 1998 financial crisis, but the absence of the KCTU resulted in a 'half agreement.'

The agreement includes ▲ employment retention and corporate revitalization ▲ establishment of social safety nets for vulnerable groups ▲ expansion of quarantine and medical infrastructure to prevent infectious diseases. First, the special period for the employment retention subsidy, which raises the support level up to 90% of wages for small and medium-sized enterprises’ leave and furlough allowances, will be extended by three months until the end of September. The payment period of employment retention subsidies for special employment support industries such as travel, tourism, and performance sectors will be extended by 60 days, and additional industries will be considered for designation. Labor and management agreed to cooperate and share the pain to overcome the COVID-19 management crisis. The management side will strive to overcome the crisis and maintain employment, while the labor side will actively cooperate with employment retention measures such as reduced working hours and furloughs. The ESLC will operate a special committee for six months to discuss follow-up measures and monitor the implementation of this tripartite agreement.

The "Tripartite Agreement Ceremony for Overcoming the COVID-19 Crisis," which was scheduled to be held on the 1st at the Prime Minister's Official Residence in Jongno-gu, Seoul, was canceled due to the last-minute absence of the Korean Confederation of Trade Unions (KCTU). The tripartite parties had originally planned to sign an agreement that included strengthening employment retention and introducing nationwide employment insurance. The KCTU held a Central Executive Committee meeting from the morning to discuss whether to sign the agreement but ultimately decided not to participate in the ceremony. The photo shows the attendees, excluding Kim Myung-hwan, the KCTU chairman, engaging in conversation that day. Photo by Kim Hyun-min kimhyun81@

The government will expand social safety nets to protect vulnerable employment groups such as workers in special types of employment (STEs). To introduce 'nationwide employment insurance' that covers all workers, a roadmap will be prepared by the end of this year. The government will actively promote the passage of legislation that includes employment insurance enrollment for STEs such as insurance planners and substitute drivers, and will gradually expand the scope of employment insurance to include the self-employed and others.

The issue lies in securing funding. The government plans to establish a nationwide employment insurance system covering 21 million workers by 2025. Starting next year, the National Employment Support System will be implemented, providing job-seeking allowances of up to 3 million won to vulnerable employment groups such as youth, women with career interruptions, and the long-term unemployed. It is estimated that 3.2 trillion won will be required for the nationwide employment insurance system and 7.2 trillion won for support measures for vulnerable groups such as the National Employment Support System by 2025.

The content of the labor-management agreement remains largely theoretical and declarative, and since the largest trade union, the KCTU, ultimately refused to endorse it, it is uncertain whether the agreement will be properly implemented on the ground. Professor Choi Young-ki of Hallym University said, "It is meaningful that the KCTU participated until the process of creating the agreement, but the original purpose of the one-point social dialogue has largely disappeared," adding, "Bringing the labor-management agreement to the ESLC for resolution should be seen as a 'last resort' to conclude the discussion." Professor Choi also said, "Since the KCTU refused to endorse the agreement, it is difficult to guarantee whether the labor side will actively cooperate with measures such as reduced working hours and furloughs on the ground and properly implement the agreement."

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