Tuesday, August 23, 2011

Interview: Mr. Lee Chae-pil, Minister of Employment & Labor

In early June this year, President Lee Myung-bak carried out a cabinet reshuffle, replacing five key ministers. Mr. Lee Chae-pil, was nominated and then confirmed as the new Minister of Employment & labor. The new minister has been vice labor minister since March 2010. His work on labor issues dates back to 1982 and was a Blue House official for labor in the early 1990s. In an exclusive interview Minister Lee outlines his policy vision and plans.

Could you please describe the Ministry’s policy priorities and objectives for 2011? The Ministry of Employment and Labor recently announced our vision and mission. Our vision is ‘to ensure employment for all and to make a happy nation through work’. To realize this vision, the Ministry is promoting policy measures to provide support for job seekers, enhance competitiveness through vocational skills development, and develop labor-management relations based on trust and harmony, etc. I and the entire staff are determined to carry out those missions. We are reestablishing our resolve to make ourselves ‘warriors for jobs’. As shown in our vision, the Ministry’s foremost priority is to provide quality employment for anyone who wants to work. After being appointed as the Minister of Employment and Labor, I pledged to focus on improving the labor market and labor-management relations so that it can contribute to creating more jobs. Private companies which create jobs lie at the center of the labor market, and these companies are also able to grow and become more innovative through quality workforce. The Ministry will spare no efforts in setting up various support schemes for employed workers and jobseekers, as well as enabling companies to hire right people to strengthen their competitiveness. The Ministry currently implements a policy on improving labor market flexibility to attract foreign investment. What policy measures are being taken? It is not easy to make a uniformed assessment of the labor market flexibility in Korea. It seems that there is a wide-spread belief that Korea’s labor market is not flexible. I believe this perception mainly stems from the lack of flexibility in certain areas of the labor market such as large companies, companies that have labor unions and full-time employees. Contrarily, some experts point out that the Korean labor market in SMEs and non-regular workers is too flexible, and raise the issue of employment insecurity. In fact, Korea turns out to have a slightly more flexible labor market than other OECD countries according to the OECD’s assessment of Employment Protection Legislation (EPL). As of 2008, Korea ranked 13th among 30 countries. The main task of the Ministry is to find balance between employment flexibility and security, which is called ‘flexicurity’. For this purpose, more efforts will be made to spread a performance-oriented wage system and create a cooperative environment between labor and management. We are also going to strengthen support and protection for SME employees and non-regular workers. In order to support an effective operation of labor market, vocational training and employment service is continuously being reshaped and reinforced to meet the needs of job seekers and firms. Recently national employment service has been strengthened in collaboration with the private services. The Ministry is also concentrating on creating blue ocean jobs by trying to increase decent part-time jobs and supporting start-ups of new businesses and jobs. I believe such policy measures will not only help reform the labor market but also contribute to improving the investment climate by enabling companies to recruit more talented workers. Korea began to display a stabilized labor-management relations following the 1998 financial crisis; of note, the smallest number of labor-management disputes occurred last year. However, the labor market continues to demand the revision of the Labor Union Act, and the labor-management relations of foreign companies (including banks) seem unstable. What are your views on this? Labor-management relations in Korea have shown stability in 2010 and this year as well. In 2010, an indicator such as number of days not worked per 1,000 employees posted figures lower than the OECD average for the first time. As of mid-July 2011, the number of labor dispute cases declined 18.9% from the previous year. I’m glad to give the news that the paid time-off system, the multiple trade unions system and the single bargaining channel are being implemented very smoothly. Those policies are keys to enhancing labor-management relations to a more sophisticated level. The time-off system, which was introduced in July of 2010, has been adopted by 92.7% of business units as of June-end 2011 and 99.2% cases conform to the time-off ceiling. The multiple trade unions system and the single bargaining channel have also been in smooth implementation starting July of this year. I would like to emphasize that the revised Trade Union and Labor Relations Adjustment Act(TULRAA) was based on agreement among the labor, management and government, taking into account actual labor-management relations in Korea whilst complying with global standards. The revised law ensures the autonomy of labor union and the right to organize of workers. Going forward, the government will work towards establishing ‘a rule of law’ and ‘a rule of autonomy’ on labor-management relations via the time-off system and multiple trade unions system. Under the new circumstances, labor unions need to work towards better representing and providing quality services for its members and companies need to develop more reasonable labor-management relations. As a minister in charge of employment and labor, it is very unfortunate to see the prolonged dispute at SC First Bank. Dispute between labor and management not only causes tangible losses for the parties involved but also inconveniences of the public. It weakens the growth capacity of companies in the long run. I hope realistic solutions acceptable to both parties are developed soon so that the dispute can be resolved harmoniously and peacefully. The employment market in the first half of this year continued to improve thanks to steady industrial output and export growth. What is your outlook and assessment of the employment market, and what measures are being taken? In the first half of 2011, the number of employed people increased 412,000 from the previous year. Based on the steady improvement in employment numbers since last year, the employment rate (between the age of 15~64) recovered to the pre-financial crisis level of 64.7% in June. In particular, it is encouraging that full-time positions increased in the manufacturing and private sectors. However, the actual sentiment people has on the employment market has yet to improve. The number of people in the vulnerable employment group in the first half of 2011 remains high at 1.97 million. Unemployment of the young people is still severe, though the unemployment rate among the young people declined slightly to 7.6% in June 2011 from 8.3% in June 2010. Also, the employment markets in certain regions have deteriorated. The economic recovery trend is expected to continue in the second half of the year, but incessant efforts are needed so that the recovery trend leads to more employment opportunities. In particular, the Ministry plans to focus on implementing customized employment policy measures that take into account the needs of the unemployed youths and the vulnerable employment group. As a part of these efforts, we kicked-off the ‘On-Site Job+ Team’ in the first half of 2011. The Team, which consists of the Ministry’s entire staff, tries to identify difficulties in running business at first hand and works to resolve them through government-wide cooperation. A total of 9,955 workplaces were visited till June in which 8,498 complaints were heard such as difficulties in finding right people, inconvenience in commuting, etc. As of July, 4,443 cases have been resolved.Further support will be provided in the latter half of the year to reduce hurdles to job creation and change inadequate regulations.