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Gov`t Probe Begins Into Illegal Subcontractor Practices

Posted September. 08, 2010 11:13,   


A major government probe began Tuesday into illegal subcontracting by large companies.

The Employment and Labor Ministry said the investigation will rectify disadvantages faced by employees of subcontractors in salary and benefits though they do the same work as regular workers.

The target of the investigation will include 29 units of large companies such as three factories of Hyundai Motor, the Bupyeong factory of GM Daewoo, the Sohari plant of Kia Motors, the Tangjeong plant of Samsung Electronics in Cheonan, the Hynix Semiconductor factory in Seongnam, Gyeonggi Province, Samsung SDS and POSCO.

Illegal practices are rumored to be going on at these places as many subcontractors are known to work there.

The ministry will focus on whether the companies use internal subcontractors illegally. For example, a company can use a subcontractor’s employees and supervise and order them like regular staff.

This practice is not illegal because the employer and subcontractor sign a formal agreement to deploy such employees. Yet many large companies treat such workers as their own in directly giving them orders, supervising and dispatching them, and setting rules on holidays and overtime work.

“In this case, the subcontractor’s employees are no different from those directly hired by the employer but are greatly discriminated against in labor, welfare and working conditions,” a ministry source said. “Though the situation can differ by industry or company, an illegal subcontractor’s employees earn 70-80 percent of what the employer’s staff makes.”

The ministry decided to receive all documents such as contracts, the list of employees, collective agreements and employment rules from the employers.

Investigation of each workplace will start after in-depth interviews with contractor employees are held through the end of next month or early November.