Only 18 Companies Will Grant Regular Worker Status to All

A report has found that only 18% of small- and medium-sized enterprises (SMEs) with irregular workers plan to grant them regular worker status when the Contractual and Part-time Worker Protection Act goes into effect. There are currently about 5.46 million irregular workers, and 93.2% of them work in SMEs with less than 300 employees. Considering the fact, great confusion in the labor market is expected, for most irregular workers in small and medium-sized enterprises will lose their jobs and seek new ones starting in July 2008.

From July 10 to 12, a team of reporters in The Dong-A Ilbo surveyed 100 SMEs that will be affected by the Contractual and Part-time Worker Protection Act from July 1, 2008. Only 18 companies answered that they will convert all of their irregular workers to regular status. The number of companies planning to grant regular status to less than 10% of their irregular workforce was 31; three said 10% to 19%; four said 20% to 29%; four said 30% to 39%; and 20 said 40% to less than 100%. 20 companies responded they have no plans yet, or did not respond. When asked how they will deal with the irregular workers that will not be granted regular worker status, 46 respondents said that they will replace their irregular workers with new irregular workers every two years. 16 companies replied that they will dismiss all irregular workers and use dispatched workers. Five enterprises answered that they will adopt a quasi-regular worker system, under which the employees will be regular workers, but with lower pay than usual. There were 33 companies that said they haven’t decided yet. The results support the concerns of experts who say that labor-management disputes on the conversion of irregular workers in large corporations such as E•LAND will be only a drop in the bucket compared to the disputes in SMEs that are to come.

When questioned why the conversion of irregular workers to regular status is so difficult, 37 companies pointed out the simple nature of irregular jobs, and 30 companies blamed the cost. Mr. Ha, 45, a CEO of a sewing and processing company, said, “Large corporations grant regular status to irregular workers because they have the money and are afraid of the government. However, labor-intensive SMEs will have to close down businesses in attempt to do so. The government and the labor need to realize that the Contractual and Part-time Worker Protection Act could lead to worse conditions for irregular workers.”

Korea Labor Institute researcher Eun Su-mi said that in some aspects, it is true that the government pushed for the Contractual and Part-time Worker Protection Act without adequate understanding of the current state. She pointed out that the law needs to be complemented considering the reality. The Contractual and Part-time Worker Protection Act stipulates that an employee with irregular status for more than two years in one workplace be granted regular worker status. In addition, when an irregular worker who performs the same or similar job with a regular worker is discriminated in terms of pay or benefits without any justifiable reason, one may get it corrected through the National Labor Relations Commission, or receive reparations.

The law entered into effect July 1, 2007, affecting large corporations with more than 300 employees. From July 1, 2008, it will be expanded to small- and medium-sized enterprises with more than 100 and less than 299 employees, and companies with more than five and less than 100 employees from September 2009.