On December 9, 2020, a total of ten amendments to Korea’s labor laws passed the plenary session of the National Assembly. We provide below a summary of the major changes to the Trade Union and Labor Relations Adjustment Act (the “Labor Union Act”) and the Labor Standards Act, which have recently garnered much interest.
1. Major Amendments to Labor Union Act
The Labor Union Act was amended to ratify fundamental conventions of the International Labor Organization relating to Freedom of Association. In this amendment, the proviso to sub-paragraph 4 (Ra) of Article 2 of the Labor Union Act, which was widely interpreted as the basis for restricting laid-off workers and others who are not employees of the company from joining enterprise (company-based) unions, was deleted, allowing laid-off workers and others to join not only industrial, occupational and regional unions, but also enterprise (company-based) unions.
However, officers and representatives of each enterprise union are required to be elected from among the members engaged in the business or working as employees (i.e., employee union members). Also, members who are not employees of the business or engaged in the business (i.e., non-employee union members) are allowed to engage in labor union activities only to the extent that they do not interfere with efficient operation of the business. In addition, in determining the number of members for the purpose of voting for or against industrial action, only employee-members of the enterprise union are included.
In addition, the regulation prohibiting compensation for full-time union officers was deleted. However, while referring to those who are paid by the employer and are engaged in labor union activities as “time-off employees,” salary compensation can only be made within the time-off limit, and any violation thereof will be subject to punishment as an unfair labor practice.
On the other hand, the government’s proposed provision requiring that non-employee union members comply with the procedures agreed between labor and management or with internal rules of the business when entering or using the business facility was deleted from the final version of the amendment passed by the National Assembly. Similarly, the explicit provision of prohibiting any dispute in the form of occupying all or part of the production and other facilities essential to the business that was originally included in the government's proposal was also removed from the final amendment.
2. Major Amendments to the Labor Standards Act
The National Assembly also passed an amendment to the Labor Standards Act, which calls for expanding the reference period of flexible working hours from the current three months to a maximum of six months. Under this amendment, the flexible working hours system with a reference period of more than three months and less than six months was introduced, and the obligation to provide 11 consecutive hours of rest period between working days and to report wage preservation measures to the Minister of Employment and Labor were imposed. In addition, for the reference period of three to six months, the amendment eased the requirement to predetermine the work schedule for each working day, which was widely viewed as limiting the use of the flexible working hours system.
For new products or new technology R&D work, the adjustment period of selective working hours, which is limited to one month, has now been extended up to a maximum of three months. However, the employer must now provide 11 consecutive hours of rest period in between working days and overtime allowance of at least 50% of ordinary wage if the average weekly working hours exceed 40 hours every month during the specified adjustment period.