Drive for 'Labor Reform'... "Fundamental Solution Needed for Dual Structure"

17th People's Power Party Gyeongan Special Committee Debate
'Measures to Resolve the Dual Structure of the Labor Market'

The ruling party is accelerating labor reform, one of the three major reform tasks of the Yoon Suk-yeol administration. Experts attending a discussion hosted by the ruling party proposed solutions related to labor-management relations as measures to resolve the dual structure of the labor market.

The People Power Party's Special Committee on Economic Stability held a discussion on the "Current Status and Solutions to the Dual Structure of the Labor Market" on the 17th at the National Assembly Members' Office Building. This was a forum to gather opinions from various sectors in the form of a discussion after receiving a report on the current status of the dual structure of the labor market at the third meeting of the special committee on the 3rd.

Ryu Seong-geol, chairman of the Economic Stability Special Committee, said at the discussion, "Among the three major reform tasks of the Yoon Suk-yeol government, labor reform is considered very important and is currently underway," adding, "The dual structure of the labor market is a long-standing and entrenched problem. Fundamental and comprehensive solutions must be presented."

[Image source=Yonhap News]

Joo Ho-young, floor leader, said in his congratulatory remarks, "It has been over 10 years since we heard about the dual structure of the labor market, but nothing has changed. It is more important to find solutions than to just look at the current status. What good does it do to repeat the same thing like Sisyphus rolling a stone?" He added, "It would be good to strongly implement measures that coordinate various interests and increase the overall share of workers."

Kim Ki-hyun, party leader who took office on the 8th, also emphasized at the first Supreme Council meeting the next day that 'labor reform' is the top priority among the three major reforms. Kim said, "To create the future of the Republic of Korea, we will first solve the urgent issue of labor reform, followed by national tasks such as pension reform and education reform step by step." The first civil-party-government consultative meeting after his inauguration was also held focusing on strengthening transparency in labor union accounting, highlighting labor reform.

"Through Win-Win Between Primary and Subcontractors" "Through Constitutional Interpretation of 'Workers'" Resolving the Dual Structure

Lee Seong-hee, head of the Labor-Management Relations Division at the Korea Labor Institute, who gave the first presentation that day, stated that previous solutions to the dual structure of the labor market focused on legal and institutional improvements and policy support, but now a 'labor-management relations solution' should be devised. Lee said, "The Moon Jae-in administration made efforts to improve the dual structure through legal and policy reforms such as raising the minimum wage and converting non-regular workers to regular workers, but as a result, it deepened the dual structure. Now, labor-management relations solutions based on concessions and compromises between labor and management should be actively considered and pursued."

Lee proposed improving the dual structure through win-win cooperation between large corporations and subcontractors. He explained, "As a model where large corporations and subcontractors coexist, stable production management of in-house subcontractors becomes an important task for large corporations. To achieve this, large corporations create wage increase funds for in-house subcontractors through fair increases in subcontracting unit prices."

As an example, he presented the win-win cooperation model between POSCO and its in-house subcontractors. Lee said, "In 2017, POSCO in-house subcontract workers filed a lawsuit against POSCO for illegal dispatch and confirmation of worker status and won. POSCO thought that the lawsuit was due to the large gap between the primary and subcontractors and considered efforts to reduce this gap." As a result, POSCO formed the 'POSCO Win-Win Council' with labor and management of in-house subcontracting companies. POSCO increased labor cost support by 270 billion won over three years in the delivery price, and the wage level of POSCO's partner companies improved significantly from 91.2 in 2016 to 117.6 in 2020 compared to the same industry.

[Image source=Yonhap News]

Lee also proposed institutional improvements to activate win-win cooperation between primary and subcontractors. He said, "For win-win cooperation, efforts by the primary contractor to support subcontractors are necessary, but so far, there have been no tax benefits when the primary contractor supports wage increase funds for subcontractors. If tax benefits are provided, many companies would actively strive for win-win cooperation."

No Ho-chang, professor of Law, Police, and Administration at Hoseo University, proposed protection measures for (digital) platform workers, who are "workers outside the dual structure" and in poor conditions. Professor No said, "They are workers, but many fall into a gray area where the Labor Standards Act and Labor Union Act are ambiguously applicable," adding, "In Spain, the 2021 'Workers' Charter Law' presumes employment relationships for digital app delivery workers, but it is difficult to directly apply such foreign cases to Korea's reality."

Professor No said, "We need to consider the constitutional standard for workers. The Constitution only states 'workers' without specifying any conditions. As times change, the content of constitutional norms may need to evolve accordingly, and such interpretation is reasonable. From a constitutional worker perspective, it is possible to argue that vulnerable groups outside the dual structure could be included." However, regarding specific protections, he added, "It is difficult to say they are directly protected under the Labor Standards Act or Labor Union Act, so institutional support for human rights protection and fairness in contracts should be considered."

Meanwhile, the People Power Party's Economic Stability Special Committee concluded its activities with this meeting. Chairman Ryu said, "With the formation of the new party leadership on the 8th of this month, the special committee appointed by the party leader will end its activities."

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