Labor Flexibility to Be Boosted

Business groups in South Korea have complained that their current labor laws are grossly obsolete, especially in a competitive international environment. The laws stipulate that employers who "illegally" lay off workers would face criminal charges including prison sentences of up to five years. An expert committee charged with revamping the current laws wishes to discontinue the use of criminal court to resolve labor disputes and switch to civil court. Furthermore, the committee is considering reducing the minimum 60-day notice period for dismissing workers. The hope is that by adopting more flexible labor measures, Korea can have more "reasonable" recruitment practices and incentive systems, making it better-equipped to compete globally. – YaleGlobal

Labor Flexibility to Be Boosted

Kim Sung-mi
Thursday, July 31, 2003

The government is considering easing regulations regarding the dismissal of workers in a bid to boost flexibility in the labor market, a source close to the labor reform program said yesterday.

An expert committee said it is studying the revision of an article in the labor law under which employers face criminal charges for illegal layoffs.

The committee is considering a change that would have such cases be resolved in civil court instead of in criminal court, a key committee member told The Korea Herald.

"Some ideas are being discussed in the committee including settlement of unlawful dismissal cases in civil court," he said on condition of anonymity.

The current clause stipulates that employers who illegally fire their workers face up to five years in prison and 30 million won ($25,440) in fines.

Business groups have complained that current law lags behind international standards, especially citing this regulation.

The panel in charge of drawing up the nation’s new labor policy will finalize its proposal next month before submitting it to the Labor Ministry Aug. 22, he added.

The committee is studying a range of other measures to enhance labor flexibility.

The group is considering reducing the minimum 60-day notice period for dismissal of workers to facilitate layoff procedures and changing the current rule that obligates employers to pay wages to full-time labor union leaders.

Its proposal also may include measures for more "reasonable" recruitment practices and incentive systems based on performance rather than seniority.

Minister of Finance and Economy Kim Jin-pyo called for more flexibility in the labor market last week in a meeting with business leaders. President Roh Moo-hyun also hinted at loosening existing layoff-related rules last month.

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