The government is reviewing to revise the 52-hour workweek rule by extending overtime hours that are currently regulated on a weekly basis to a monthly basis. Through the Future Labor Market Research Council that will begin operation in July, the government will conduct studies on flexible working hours arrangements and wage system reform based on job tasks and performances, thereby expediting labor reform.
On Thursday, the Ministry of Employment and Labor announced labor reform measures which include flexible working hours and performance-based wage structure instead of the current seniority-based wage system. Minister of Employment and Labor Lee Jeong-sik said in a briefing that the country’s employment and labor system will be modernized to keep up with the changing societal trends. “The labor norms and conventions shaped in the industrial era are inappropriate to respond to novel changes,” said Minister Lee.
Under new labor policies, extended working hours that are currently set at 12 hours a week will be able to flexibly operate on a monthly basis through labor-management consultation. The current Labor Standards Act provides for a 40-hour workweek and overtime hours up to 12 hours a week on condition that there is a labor-management agreement in advance. Through statutory amendment, maximum overtime hours will be scheduled on a monthly basis instead of weekly, allowing workers to work 40 hours one week and 64 hours next week, including overtime of 24 hours.
Flexible work arrangements that the new government introduced as a policy agenda include working hours saving deposit system and expansion of the settlement period for selective working hours. The age structure will also be reformed on the basis of job tasks and performances.
While the business community welcomed the government’s reform proposal, the labor side denounced it as “unfair revision of the law.” As many of the policies the government seek to reform requires statutory amendment or voluntary cooperation of the labor-management, much difficulty is expected.
It is worrisome that the government and the central bank may be making light of the current situation where foreigners are recently taking their hands off and reducing their investment in the Korean stock market. The 2008 global financial crisis and 1997 Asian financial crisis were tragic results of an inability to keep the credit crunch caused by a dropping won and capital outflows from translating into a real economy crisis. The authorities must come up with measures to safeguard the foreign exchange market before the “sell Korea” spree accelerates.
Ae-Jin Ju firstname.lastname@example.org