(4) Problems with the Act on the Protection of Non-Regular Workers
Have there been problems by the implementation of the
Act on the Protection of Non-Regular Workers? Kim Yuseon (2008) points out that while regular employment is increasing, indirect employment via staffing and temp agencies has been increasing for the same period.
Also, the practice of "hiring cutoff" where an employment contract is terminated before two years elapses, has been widespread. Section 4.2 of the "Act on the Protection of Fixed-Term and Short-Term Workers (the Act on the Protection of Non-Regular Workers)" states that fixed term employees may be employed at most for two years, whereupon they become classified as contractual workers for an indefinite contractual period. However, this can be interpreted to mean that employment may be terminated at any point of time prior to two years. In fact, most workers’ employment contracts were terminated at the point of around 1 year and 9 to 10 months after their contracts were signed. Experts have predicted that this problem would occur ever since the Ministry of Labor first began designing the
Act on the Protection of Non-Regular Workers.
It is fair to say that the implementation of the
Act on the Protection of Non-Regular Workers in South Korea has had a somewhat positive effect by lowering the ratio of non-regular workers and increasing the usage of nonfixed-term contracts, but the effect has not been as pronounced as the South Korean government had expected. In other words, more and more, as contracts near the two-year point, fixed-term contractors run into the hiring cutoff, and their jobs are outsourced. One typical example, which occurred in June 2007, was the "E-Land War." Just prior to the implementation of the
Act on the Protection of Non-Regular Workers, the E-Land Retail Group, parent of the South Korean retailer "Homever," announced that 521 of its 1,100 contract workers of over two years would be reclassified as regular employees. However, they also notified 350 people whose contract terms had expired that their contracts would not be renewed, and decided to outsource the jobs such as cash registers, etc. Outraged at this last-minute hiring cutoff, union workers lead by the
ajumma (middle-aged women), held labor strikes and sit-ins in protest. The strikes continued for 510 days, finally ending on November 13, 2008. While the "E-Land War" did result in the rehiring of some of the union members who were terminated during the strike after the major distributor Samsung Tesco Homeplus acquired Homever’s business, and as the negotiations continued after the acquisition, some of the non-regular workers were automatically reclassified as indefinite employees during the 16 month-long ordeal; the practice of hiring cutoff to cope with the
Act on the Protection of Non-Regular Workers appeared the forefront as a societal problem.
The "E-Land War" has paid the attention of the mass media and the nation as a whole. Although it was resolved in a not altogether unfavorable way, it was a reminder that this problem had gone on unsolved for 10 years, ever since the implementation of the
Act on the Protection of Non-Regular Workers. There were still many vulnerable workers in Korean society who, in spite of the unfair termination of their contracts, their poor working conditions, and in spite of being discriminated against merely for being irregular employees, were powerless to do anything at all about it. Further, even those who were reclassified as contractual employees for an indefinite contractual period under the
Act on the Protection of Non-Regular Workers saw no improvement in the way they were treated such as many continuing to see a widening salary and benefits gap between themselves and regular workers. This has contributed to growing inequality in South Korean society.
The
Act on the Protection of Non-Regular Workers reclassifies contract workers who have worked for two years or more as contractual employees with no fixed term, requires management to employ them directly, prohibits unreasonable discrimination against them through wages or working conditions, and grants non-regular workers who were discriminated against the right to seek redress before South Korea’s Labor Commission.
However, the reality is that improved treatment of non-regular workers has not improved that much. Currently, only the discriminated individual against has standing to seek redress for discrimination under the
Act on the Protection of Non-Regular Workers, and only if the discrimination is unreasonable when compared with a regular employee with the same or similar job duties. Further, very few workers are willing to jeopardize their contracts in order to pursue this remedy.
Table 5 shows the state of utilization of this discrimination remedy system, which peaked in 2008, the year after the
Act on the Protection of Non-Regular Workers was implemented, at 1,948 petitioners using the system, and has been declining ever since, falling all the way to only 78 cases in 2012. Given the large proportion of non-regular workers in South Korea, the number of cases where the discrimination remedy system has actually been used is profoundly low. Why are there so few cases of the discrimination remedy system being used? The Ministry of Labor announced that it would consider the potentially negative consequences faced by those non-regular workers who individually petition for redress of discrimination, and that it would introduce a method whereby a labor union could represent an individual member as a petitioner, but so far this has not been implemented. Further, even when a petitioner does make a claim, in many cases the commission finds that no discrimination occurred because the scope of regular employees with the same or similar job duties is very narrow. We believe this is the reason for the declining frequency of the use of the discrimination remedy system.