Presidential Election Risks Pressuring the Business Sector

Major Presidential Candidates' Promises
Growing Concerns Over Negative Impact on Corporate Management
Labor Director System Emphasized by Candidate Lee Jae-myung
Related Law Amendment Passed in National Assembly on 11th
Candidate Yoon Seok-youl Also Takes Pro-Labor Actions
National Pension Fund as Representative Plaintiff
Issues with Efforts to Unify the Trustee Committee

[Image source=Yonhap News]

[Asia Economy Reporter Choi Dae-yeol] "If possible, it would be good to find a way to handle it within the regular National Assembly session, and if the opposition party opposes or does not cooperate, it is necessary to promptly resolve the public sector labor director system even through the fast track. It will be treated as the top priority task at the presidential campaign committee, and I will take responsibility."

This was said by Lee Jae-myung, the Democratic Party presidential candidate, when he visited the Korean Confederation of Trade Unions last November. About a month and a half later, on the 11th, a bill containing this content passed the National Assembly.

Starting from the second half of this year, it is expected that one labor director will be appointed to the board of directors of public institutions. The main economic organizations, which are not direct stakeholders of the system, have great concerns because they see the spread to frontline companies as a matter of time. The "introduction of the public sector labor director system and subsequent spread to the private sector" was also a pledge during President Moon Jae-in's candidacy. Candidate Lee Jae-myung has also repeatedly expressed the necessity of introducing the labor director system to private companies.

Park Jae-geun, head of the Industrial Research Division at the Korea Chamber of Commerce and Industry, said, "This system, introduced in some European countries, does not fit well with Korea's labor-management relations and governance culture, and it is questionable whether there is sufficient public consensus. Especially, there is concern that it will start with mandatory implementation in the public sector and then move toward mandatory implementation in private companies."

Lee Jae-myung, the Democratic Party presidential candidate, is announcing policy pledges in the industrial sector on the 12th at the Korea Industrial Technology Promotion Association in Seocho-gu, Seoul. Photo by Yoon Dong-joo doso7@

With the March presidential election approaching, there is a tense atmosphere worrying whether the pledges that major presidential candidates from both ruling and opposition parties are competing to present will materialize as 'election risks.' Issues such as the minimum wage, four-day workweek, 52-hour workweek system, and the Serious Accident Punishment Act, which affect frontline workers' lives and corporate management, are piling up. Instead of presenting clear pledges, candidates are offering sweet-talking remarks to secure votes immediately. There are concerns and criticisms from inside and outside the business community that if presidential candidates flood the market with vote-conscious pledges amid the already increased management uncertainty due to the Omicron-driven COVID-19 pandemic and global supply chain disruptions, it could lead to weakened competitiveness.

At least the business community is positively receiving the deregulation pledges related to the industrial sector put forward by major candidates from both ruling and opposition parties, but even here, the prevailing view is that more observation is needed on the details. While Democratic candidate Lee Jae-myung is showing pro-business moves, on the other hand, People Power Party candidate Yoon Seok-youl, after being confirmed as a candidate, first visited labor organizations, clearly showing a vote-conscious approach. The business community expects that as the presidential election clock moves forward, vote-conscious pledges will proliferate.

Yoon Seok-yeol, the presidential candidate of the People Power Party, is announcing a pledge to reform unreasonable regulations in the gaming industry and protect user rights at the central party office in Yeouido, Seoul, on the 12th. Photo by Yoon Dong-ju doso7@

Recently, the National Pension Service's move to unify the entity filing shareholder derivative lawsuits internally into the Stewardship Responsibility Committee is also a risk pressuring the business community. According to the guideline amendment proposed by the Ministry of Health and Welfare last month, the decision on National Pension Service derivative lawsuits is likely to be transferred to the Stewardship Committee, raising concerns about fund losses, lack of expertise, and excessive lawsuits used to pressure companies.

There are also criticisms about whether it is appropriate for the Stewardship Committee, which is lower in hierarchy than before, to have authority over lawsuits that inevitably attract high external attention. A business community official said, "A significant portion of pension insurance premiums is borne by companies, and there is a high chance they will become parties to lawsuits, but discussions proceeded without gathering opinions from the business community. There is also a risk that lawsuits could be abused depending on political backgrounds or public opinion."

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