In 2008, the new government of President Lee Myung-bak caused a paradigm shift in labor policy. The new paradigm aims to pursue growth and employment simultaneously by supporting economic revival and job creation to make Korea a leading advanced nation. This means pursuing economic growth and job creation at the same time by boosting market economy, developing human resources and achieving active welfare.
But now with the Korean economy facing a serious crisis, it has even more challenges. Falling exports and shrinking domestic demand are expected to lead to negative growth and the employment situation is deteriorating rapidly. There is even a possibility that the current economic crisis could become a disaster never experienced before in terms of its scale, duration and impacts. Moreover, this crisis is under way not just in Korea but also all over the world, so it cannot be easily overcome by the government's efforts alone without cooperation from other social partners.
I caught up with Mr. Lee Young-hee, Minister of Labor to give me an insight into the government plans on the labor front. Especially since the “strike season” is due to start soon.
The following are excerpts:
“With the release of the ‘Agreement between Labor, Management, Civic Groups and the Government to Overcome the Economic Crisis" on February 16th, the spirit of labor-management cooperation is spreading. Nevertheless, the possibility for labor-management conflicts remains concerning issues including corporate workforce reduction and improvement in labor laws and systems.”For those who are interested, the full interview can be read here.
The major contents of the agreement were that labor unions will restrict strikes and freeze, return or cut pay according to companies' conditions in the course of overcoming the economic crisis. The management will root out unfair labor practices, and maintain existing levels of employment.
“The government will actively support the efforts to retain and share jobs for sharing burdens by labor and management. It will expand the social safety net, and come up with protection measures for non-regular workers and the small-scale self-employed,” he said.
For the faithful implementation of the agreed matters, all sides will establish and operate an implementation checkup unit, Minister Lee added.
Speaking on the policies that the ministry will pursue this year, he noted that steps will be taken to minimize unemployment of employed workers. Voluntary labor-management cooperation for minimizing lay-off, refraining from wage increase and improving productivity, voluntary cooperation and concession by labor and management are spreading.
“The ministry will actively provide employment retention subsidies, when labor and management take job stability measures through closedown and suspension from service. For the suspension and reduction of work to be an opportunity for better productivity, we will encourage enterprises to conduct vocational training rather than simple suspension of business and lay-off,” he said.
For SMEs whose training capacities are not sufficient, support will be given through training consortium projects, etc. Support for skills development will be strengthened for vulnerable workers, including non-regular workers.
Intensive employment assistance through vocational counseling for people who face difficulty in landing a job, the MOL will establish individual action plan (IAP) for employment support and provide intensive services.
The MOL will also expand training projects for the unemployed and offer loans for living expenses during training period. Support for job transfer will be activated through joint re-employment support center for labor and management.
“We will also expand the scale of programs. More than 50% of all social service jobs will be allocated to vulnerable groups, including low-income unemployed people, with the aim of responding to the crisis.”
The ministry will activate the system of paying allowances to workers whose employment is maintained or extended under a wage peak system. The government subsidies for hiring the disabled will be expanded and skills development of the unemployed disabled will be strengthened according to the type of disability.
Centering on the five sectors of auto, public, finance, health and construction, the ministry will operate the ‘Industrial Relations Task Force in Vulnerable Industries’ with the aim of supporting dispute resolution.
“We will select and intensively manage core establishments with big implications and establishments vulnerable to labor disputes. We will continue to enhance policy predictability by maintaining its policy direction towards laws and principles. At the same time, it will help labor and management to resolve conflicts on their own.”
In terms of illegal actions, the ministry will take a strict action no matter whether it be labor or management. Correction guidance will be provided for illegal actions, including unfair labor practices, occupancy of production facilities and political strikes. At each regional labor office, a ‘Team for Preventing Illegal Actions’ will be run with the aim of guiding the compliance with laws.
Concerning the permission of multiple trade unions, Minister Lee said that the MOL will improve the bargaining system and wage payment to full-time union officials. Through discussions at the tripartite commission, efforts will be made to reach an agreement during the first half of this year. Based on discussions, the MOL will pursue measures to submit a legislative bill, prepare subordinate laws and lay the foundation for administrative support.