KCCI "Regret over Labor Director System Passing in National Assembly Plenary Session... Institutional Improvements Needed"

[Asia Economy Reporter Ki-min Lee] The Korea Employers Federation (KEF) expressed regret on the 11th regarding the passage of the "Amendment to the Act on the Operation of Public Institutions (Labor Director Act)" in the National Assembly plenary session, which allows worker representatives to participate in the decision-making process of public institution boards of directors, and pointed out that "institutional supplementation is necessary."

The Labor Director Act requires that one non-standing director, recommended or agreed upon by worker representatives, be appointed to the boards of public enterprises and quasi-governmental institutions. Eligibility is granted to workers who have been employed for more than three years, with a term of office of one year, renewable once for a total of two years. Since the amendment will be enforced six months after promulgation, it will apply from July this year.

The KEF stated, "The business community has repeatedly requested reconsideration, considering that the Labor Director system does not align with South Korea's economic system and that the board of directors could be transformed into a venue for labor-management conflict, hindering swift decision-making. Nevertheless, we deeply regret that the Labor Director Act, which mandates the introduction of the Labor Director system in public enterprises and quasi-governmental institutions without sufficient review of side effects or social consensus, has passed the National Assembly plenary session."

They added, "Although the introduction of the Labor Director system in the public sector has been confirmed, institutional supplementation must be ensured when enacting related enforcement ordinances and rules to minimize side effects during future operation."

In particular, they emphasized, "Since the status of a director who is both a union member and part of management can cause conflicts of interest, it should be clearly required that Labor Directors withdraw from the labor union during their term." They also added, "Furthermore, if the Labor Director system is introduced to private companies, it could cause significant shocks and serious side effects to our market economy, so it is necessary to prevent future legislative expansion to private companies."

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