We introduce below updates on labor law amendments enforced in the second half of 2020 and the Korea Tripartite Commission agreement on improvement of the employee representative system.
1. Expansion of Scope of Special Employment Type Workers (Effective as of July 1, 2020)
Under the Industrial Accident Compensation Insurance Act (the “IACIA”), certain types of “special employment type workers” are entitled to workers compensation benefits. Prior to the amendment on July 1, 2020, insurance agents, private tutors, golf caddies, delivery workers and expedited/“quick” delivery workers were entitled to workers compensation benefits. Pursuant to the amendment, the following types of workers were added to the aforementioned types eligible for workers compensation benefits: tutors who visit homes and use teaching tools/aids, door-to-door salespersons, rental product inspectors, home electronics installers and cargo vehicle owners.
2. Grounds for Exemption from Vicarious Liability Involving Unfair Labor Practice (Effective as of June 9, 2020)
On April 11, 2019, the Constitutional Court found the vicarious liability provision for an unfair labor practice under the Trade Union and Labor Relations Adjustment Act (the “TULRAA”), under which both the individual who committed the unfair labor practice and his/her employer are subject to punishment, unconstitutional. As such, the TULRAA was amended effective as of June 9, 2020. The new provision provides that the employing entity may be exempt from such liability if it has exercised significant care and supervision to prevent the unfair labor practice concerned.
3. Amendment to Provision Regarding Providing Financial Support for Operational Expenses of Labor Union (Effective as of June 9, 2020)
On May 31, 2018, the Constitutional Court ruled that it is unconstitutional to uniformly prohibit employers from providing financial support for operational expenses of a labor union if doing so does not infringe on the labor union’s autonomous operation or activities. Accordingly, the TULRAA was amended effective as of June 9, 2020 to allow employers to provide financial support to a labor union for operational expenses to the extent that there is no risk of infringement upon the labor union’s autonomous operation or activities.
4. Enhanced Punishment for Fraudulently Receiving Subsidies Under Employment Insurance (Effective as of August 28, 2020)
To prevent individuals from fraudulently receiving government subsidies in collusion with his/her employer, a penal provision has been added via an amendment to the Employment Insurance Act. Under this provision, if an individual colludes with the employer to receive government subsidies (including subsidies for employment stabilization and vocational competency development programs, unemployment benefits, childcare leave benefits, benefits for reduction of working hours for childcare and/or maternity leave benefits) via falsification or otherwise fraudulent means, the individual and the employer concerned will face imprisonment of up to five years or a criminal fine of up to KRW 50 million, respectively.
5. Retroactive Recognition of Accidents During Ordinary Commute Times (Effective as of June 9, 2020)
On September 29, 2016, the Constitutional Court found that it is unconstitutional to recognize only accidents that occur during the employee’s commute under the employer’s control and management as industrial accidents. As such, an amendment to the IACIA was passed and effective from January 1, 2018, employee accidents that occur while commuting via ordinary routes and methods have been recognized as industrial accidents. The Constitutional Court ruled that not recognizing accidents that occurred (i) while commuting via ordinary routes and methods and (ii) between the date the above decision was rendered (September 29, 2016) and the enforcement date of the amendment (January 1, 2018) was unreasonable discrimination and therefore unconstitutional on such grounds. As a result, workers compensation benefits are now also available to employees for accidents that occurred after September 29, 2016 during an employee’s ordinary commute.
6. Standards to Improve the Employee Representative System (Announced on October 16, 2020)
An employee representative (an “Employee Representative”) is an important actor with the authority to consult with or reach an agreement with the employer on approximately 30 areas regarding labor laws, including dismissal for managerial reasons and executing a written agreement on the working hour system. Nonetheless, because statutory provisions on the procedures or methods to elect Employee Representatives do not exist, there have been continued disputes over whether Employee Representatives have been lawfully elected.
On October 16, 2020, the Tripartite Commission under the Economic and Social Development Commission of Korea1 (the “Tripartite Commission”) announced a tripartite agreement on improvement of the Employee Representative System (the “Tripartite Agreement”), presenting methods to democratically elect Employee Representatives in light of various circumstances of workplaces.
Although the Tripartite Agreement is not legally binding, as there are no explicit legal standards on the election methods or status of the Employee Representative, the Tripartite Agreement could be used as a reference for operating the Employee Representative System in the future. Key terms are as follows.
- The Tripartite Agreement presented methods for democratic elections of Employee Representatives in light of various circumstances of workplaces such as the existence of a majority labor union and existence of a Labor Management Council.
- The Tripartite Agreement stipulated the term (three years) and guaranteed certain activities of an Employee Representative to strengthen the abilities to represent employees’ interests.