70% of Employment and Labor Bills in the 21st National Assembly Environment and Labor Committee 'Regulatory Strengthening'

[Asia Economy Reporter Kim Hyewon] Among the 10 employment and labor bills proposed to the Environment and Labor Committee during the 132 days following the opening of the 21st National Assembly, 7 were focused on strengthening regulations.

On the 19th, the Korea Economic Research Institute (KERI) investigated the bills proposed to the Environment and Labor Committee from May 30, when the 21st National Assembly term began, to October 8, and found that out of a total of 392 bills, 264 were employment and labor bills, accounting for 67.3%.

Among these, 192 bills, or 72.7%, were aimed at increasing burdens on companies or strengthening regulations, while bills aimed at deregulation accounted for only 35, or 13.3%. The remainder consisted of 19 bills (7.2%) for government support and 18 bills (6.8%) classified as neutral. Neutral bills refer to those not directly related to companies or regulations, nor government support.

KERI expressed concern that major regulatory strengthening bills pending in the National Assembly’s Environment and Labor Committee could result in reduced labor market competitiveness and overall employment creation capacity in the economy. Specifically, they explained that these bills tend to increase union power without considering employer countermeasures, increase employer cost burdens leading to reluctance in hiring, and attempt to solve problems through laws and regulations rather than respecting autonomy at the workplace.

Choo Kwang-ho, Director of Economic Policy at KERI, pointed out, "Despite the unprecedented COVID-19 crisis, many bills strengthening regulations that undermine labor market competitiveness and restrict companies, which are the source of employment creation, have been proposed. In particular, many include provisions that deepen labor-management imbalance, such as allowing union membership for dismissed or unemployed workers, and increasing burdens on companies like one-month severance pay."

Many Bills Deepening Labor-Management Imbalance

The Environment and Labor Committee has proposed bills including the government’s amendment to ratify the International Labour Organization (ILO) core conventions, allowing dismissed and unemployed workers to join unions, and banning replacement labor during disputes involving dispatched workers. KERI pointed out that if such amendments pass, unions may engage in more radical activities, further worsening labor-management relations.

There are also bills pending that prohibit claims for damages (or provisional seizure) against union executives or members even if damages occur due to violent or destructive union disputes, provided these are planned by the union. KERI argues that exempting compensation responsibility even when there is a significant causal relationship between damages and illegal strikes, such as planning or directing illegal strikes or causing critical damage to workplaces, could infringe on employers’ property rights.

Concerns Over Job Loss and Proliferation of Regulation-Centric Bills

Bills requiring severance pay for employees with more than one month of service or mandating employment insurance coverage for workers in special types of employment (Special Types of Workers, or STW) increase labor costs for employers. Severance pay funds are fully borne by employers, and employment insurance premiums must be shared between STW and employers. KERI expressed concern that if employers find these additional burdens difficult to bear, they may have no choice but to reduce employment.

Bills restricting the use of non-regular workers such as fixed-term, part-time, or dispatched workers also risk reducing employment for these workers, contrary to their original intent. Examples include bills mandating direct employment for life- and safety-related tasks and regular tasks, or requiring preferential treatment of non-regular workers over regular workers. KERI believes that if such bills pass, companies will hire only the minimum necessary workforce, ultimately leading to job losses.

Many bills prioritize laws and regulations over encouraging autonomous improvements at the workplace. Representative examples include bills expanding the scope of workplace harassment prohibitions to third parties outside the workplace, and bills expanding the disclosure items of employment type reporting systems to include average wages and job content. KERI suggested that since harassment issues largely stem from organizational culture, it would be more helpful for laws to set minimum standards and encourage companies’ autonomous improvements. Additionally, regarding employment type disclosure systems, KERI argued that additional disclosures such as average wages and job content are likely to cause side effects like leakage of core information, thus requiring careful review.

KERI emphasized that to overcome the employment crisis accelerated by COVID-19, it is necessary to promptly pass deregulation bills currently pending in the Environment and Labor Committee to secure labor market competitiveness. Specifically, they explained the need to supplement employer countermeasures to restore balance in labor-management relations, such as deleting the ban on replacement labor during disputes and completely banning workplace occupations. They also pointed out the need to positively consider bills that mitigate the side effects of rapid labor market policies like the introduction of the 52-hour workweek and high minimum wage increases, including extending the unit period for flexible working hours and the settlement period for selective working hours, and applying differentiated minimum wages by industry, size, and region. Director Choo emphasized, "It is time to actively consider labor market deregulation bills to enhance the employment creation capacity of our companies."

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