Foreign Companies within Special Economic Zone, Easing of Labor Restriction

The paid monthly leave or menstrual leave will not be applied to foreign investment companies moved into a special economic zone to be designated in near Gwangyang Harbor Busan and the west of the Metropolitan area.

These foreign investment companies can use dispatched employees freely without the period restriction, and will not receive the application of ‘own industry of small & medium-sized companies’.

The Ministry of Finance & Economy said on August 20 that it would discuss with the related ministries by taking ‘regulation on designation and operation of the special economic zone’.

In terms of the regulation on the protection of the dispatched employees, the manufacturing industry excludes the direct production process from the dispatched labor. If it requires the professional knowledge or techniques, it sets limits and its period is 1 year in principle.

It has the prior discussion for the use of dispatched labor and labor union. However, the provisions of the bill are not applied to the special economic zone.

Not applying the ‘own industry of small & medium-sized companies’ within the special economic zone, it can make the own industry of small & medium-sized companies advance without restriction.

The companies will not receive the restriction of the standard factory ratio and restrictions such as a traffic allotment, total investments restriction and care of the national merit man.

As the measures can be applied to joint companies of Korean and foreigners, there will be a criticism of reverse distinction with companies beyond the special economic zone during legislative process.

Besides, Korean Confederation of Trade Union and Federation of Korean Trade Union (FKTU) announced respectively at that day “It is the bill to liquidate the basic labor right. When the government enforces the law legislation, we will go on strike connecting with all labor worlds.”

The labor world disputed “The paid monthly leave or menstrual leave guaranteed by the Labor Standard Act must be applied to labors in the special economic zone. Unlimited extension of the dispatch labor period of the maximum 2 years is to scarify the irregular dispatched labors.”

Kwang-Hyun Kim Jin Lee kkh@donga.com leej@donga.com