[asia-apec 359] Dec. 26 Labour Law - Analysis, Part 5

[daga]

        Korean Confederation of Trade Unions 
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   The December 26, 1996 Labour Law Amendment:
   the further violation of the Freedom of Association 
              and Collective Bargaining

(Part 5)

11. Increase in the Penalties

The government amendment (the newly created Trade Union and 
Industrial Relations Adjustment Act) contains a total of 16 penalty 
clauses for the trade union (workers), 3 for the management, and 5 
which can apply commonly to both the management and the trade 
union. This is an increase of 4 for the workers from the original 12. 
Furthermore, the severity of penalty for contravening workers is 
greatly increased. For example, the current law contains only one 
case which is liable for a maximum penalty of 3 to 5 years 
imprisonment and/or 5 million to 10 million Won fine. However, in the 
amended law there are 4 cases which are liable for a maximum of 3 
years imprisonment and/or 30 million Won in fine. The fine that a 
contravening trade union or persons has increase in general, while in 
some cases it has increased by 25 times. The government 
amendment makes the industrial relations a minefield of 'crimes', 
aimed at making criminals out of trade unionists. These changes 
reflect that the so-called labour laws are oriented towards 'regulating', 
'controlling', and 'restricting' trade union activities. Such a framework 
for the labour laws creates a vast scope for state intervention which 
may exacerbate tension in the industrial relations, weakening the 
capacity for autonomous labour-management relations, and 
increasing the reliance (especially by the employers) on the state 
intervention (by police, other law and order authorities, and 
government and administrative authorities). This will seriously 
undermines the spirit and principle of autonomous labour-
management relations, worsening the prospect for building a basis for 
mutual recognition, mutual trust, and a healthy industrial relations. 


      The Second Gift Package for the Business

Much of the outrage that powered the month-long general strike 
was sparked off by changes in the labour law which codified into law 
an number of radical measures for labour market and working hour 
flexibility.

Redundancy Dismissal

The labour law that was railroaded through the National Assembly 
by the ruling party provides legislative provision for 'redundancy 
dismissal'.  

The legally specified powers of the employers to dismiss en 
masse those workers they regard as "redundant" signals a drastic 
destabilization of employment security.  Although 'lay off is not 
entirely new, as the new legislation, in fact, codifies much of what was 
already permitted by Supreme Court precedence, will, because its 
power as a law, have serious structural, social, and psychological 
ramifications.

Before December 26, 1996, lay off was permitted on the basis of 
the May 1989 Supreme Court decision which provided the justifiable 
conditions mass retrenchment. It found "the dismissal of workers on 
the grounds of business reasons" justifiable only when, 1) "there was 
an urgent management necessity brought about by a danger in 
maintaining the business without laying off the employees"; 2) the 
management had undertaken efforts to avoid mass dismissal by 
means of such efforts as to rationalize the management practice or 
the work patterns, to suspend new employee recruitment, and to 
utilize such methods as temporary leave or voluntary retirement; 3) 
the employees targeted for dismissal were duly selected on the basis 
of objective and fair criteria; and 4) there was sincere efforts to 
dialogue with the trade union or the employee representatives prior to 
the dismissal. 

The 1989 Supreme Court precedence was overturned by another 
Supreme Court decision in December 1991 which had the effect of 
removing all the restrictions on "redundancy dismissal", exposing the 
workers' job security to the decision of the management. 

The new law, as demanded by the employers groups and the 
government, enshrines the 1991 Supreme Court decision into law.
The actual law that was 'passed' differs slightly from the original 
government amendment which states: 

  "When an employer decides to dismiss workers for business reasons 
  there has to be critical business related reasons, such as, continued 
  worsening of business, changes in the work organisation or pattern for 
  improvement in productivity, structural changes due to introduction of 
  new technology and other innovations in technology, and change in the 
  enterprise category."

The ruling party claims that it had narrowed the scope of 
justifiable conditions for mass dismissal.  The actual amendment, 
however, maintains the original conditions except for a change in the 
wording of the law:

  "When an employer decides to dismiss workers for business reasons 
  there has to be critical business related reasons, such as, continued 
  worsening of business, structural changes or technology innovation for 
  improvement in productivity, and change in the enterprise category." 
  (27:2 Labour Standard Act)

It would not be wrong to see some similarities between the 
response of the Korean working people and families (who were 
responsible for the wide spread support for the general strike, 
recording above 70% support in all public opinion surveys) and the 
response of their counterparts in most of other countries where 
companies and governments have succeeded in making greater 
inroads in the area of 'flexibility'.  The threat of dismissal and 
flexible working hours in Korea, however, has added magnitude and 
dimension.  The 'flexibility' offensive in most European countries is 
combined with an attack on the so-called 'welfare state'.   What is 
unique about the 'flexibility' crusade in Korea is that it is happening in 
the absence of any kind of basic 'welfare' protection.

The codification of 'redundancy dismissal' or 'lay off' will have a 
'catastrophic' impact on the working family.  This reflects the reality 
where much of a family's welfare provisions are linked to company 
and employment and wage.  Korean society lacks a comprehensive 
minimum social protection and welfare provision.  Much of the 
welfare needs of a family is provided by companies through wage.  
Most working families are reliant on companies for cheap housing 
loans, health insurance subsidy, and education subsidy -- to name a 
few -- which are included in the wage package.  In Korea, working 
people fear that lay off would not just mean loss of a job, but an 
immediate loss of the house, a sharp rise in medical and education 
cost, and the very fabric of life.

Variable Working Hour System

The 'variable working hour system' made a comeback on 
December 26, 1996.  It was first introduced in 1980 by the State 
Security Legislative Council set up by the military regime of Chun 
Doo Hwan to be repealed in 1987 as one of the first "repressive laws 
of the Fifth republic".

The new law allows employers to demand employees to work a 
maximum 56 hours a week -- without overtime rate payment -- as long 
as the weekly average working hours remain within the legally 
stipulated 44 hours (42:2 Labour Standard Act).  The new law allows 
the employers to enforce extremely long hours of work for some 
particular weeks and days of their own choosing without the need to 
pay the appropriate overtime rate.

As noted by employers, advanced industrial countries, such as, 
U.S., Japan, Germany, and France, allow for "variable working hours". 
The difference, however, lies in the average real working hours. In all 
these countries, the average working hours is less than 40 hours a 
week, in stark contrast to the average of 48.7 hours obtained in Korea. 
In these countries, a system "variable working hours" was introduced 
when the average working hour was around 40 hours. For example, 
the actual average working hour in France is 38.6 hours, and variable 
working hours is allowed only within the limit of total weekly working 
hours of 44 hours.  

There are a number of problems with the new labour which 
aroused the anger of people. The new working hour system does not 
coincide with a plan for or a trend of reduction in real or legally 
stipulated working hours.  Furthermore, it does not provide any limit 
to daily or weekly working hours.  These, perhaps, are more 
technical aspects of the problem.  The real problem lies with the 
dangers of industrial accidents and health problems caused by 
irregular and extended working hours.  And the most important 
cause for concern is the reduction in wages.

The much touted high wage level of Korean workers is, in fact, 
based on wage boost stemming from overtime pay.  Most Korean 
workers supplement their basic wage by long overtime work.  It is 
necessary * and it has become a common practice -- for Korean 
workers to work extended ours to obtain extra income needed for their 
basic livelihood.  Therefore, the comparison of wage level between 
Korean workers and those in the western industrialised countries 
much take the working hours into consideration.  In Korea, therefore, 
the introduction of 'variable working hour system' is not merely a 
matter of flexibility, and obtaining the time for leisure activities, as
the 
government rationalises, but a means for greater 'exploitation' 
without due compensation, giving the companies primitive means of 
recapturing their lost 'international competitiveness'.