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  KFTC Announces Enforcement Plan for 2021 On January 22, 2021, the Korea Fair Trade Commission (the "KFTC") announced its 2021 Enforcement Plan (the "2021 Plan"). The enforcement plans, published annually by the KFTC, present a comprehensive overview of the issues and enforcement areas of the KFTC's priority for the year and lay out a plan for the KFTC's enforcement activities for the new year. This year, the 2021 Plan in particular drew closer attention by the business community in Korea as a roadmap of the KFTC's enforcement under the substantially amended Monopoly Regulation and Fair Trade Law (the "FTL") when it takes effect in January 2022. As detailed in our previous newsletter, the amended FTL, among others, will (i) have information exchange as a new type of illegal collusive conduct, (ii) double the maximum percentage of revenues that can serve as the basis of administrative fines, (iii) provide an individual's right to directly seek injunctive relief against unfair trade practices, and (iv) introduce a new merger filing threshold based on the size of the transaction and the target's activities in Korea. With this background, we provide below our observation on key issues and areas drawn from the 2021 Plan: Focus on Fair Competition in Digital Economy 2021 marks the fifth year of the Moon administration, and the KFTC's enforcement activities before this year have mostly focused on regulation of large conglomerates and protection of the economically weaker small businesses from the abusive practices of larger companies. While there is no significant change to the KFTC's overall policy direction from previous years, the 2021 Plan notably discusses establishment of fair competition in digital economy as the first priority area of its enforcement effort, among the following six core task items: Promote fairness in digital economy Foster an inclusive market characterized by mutual cooperation and coexistence between large companies and small and medium businesses Establish sound ownership/control structure of large conglomerates and fair transactions by large conglomerates Establish market environment and trade practices that promote innovation Build a system to institutionally guarantee consumer rights Reinforce infrastructure for implementing fair trade policies As a background, the 2021 Plan recognizes the increasing digitalization of economy under the Fourth Industrial Revolution and structural changes toward contactless economy, which in turn calls for close review and regulation of new competition issues. The KFTC's prediction of (i) new types of unfair trade practices and consumer harms caused by network effect and (ii) more economic difficulties to be suffered by smaller vendors due to competition between online and offline businesses is also noteworthy as a basis for its all-front regulatory efforts in digital economy presented in the 2021 Plan. Facilitation of Innovation Innovation continues to be one of the keywords in the 2021 Plan. The actions that the KFTC is expected to take include: introduction of more detailed standard for the newly-added merger notification threshold based on the transaction value, reinforced monitoring of market-dominant players' conduct, such as exclusive dealing and rebate offering, in semiconductor and pharmaceutical businesses, and regulating abuse of intellectual property rights, such as unfair royalty demand by SEP holders. Building Stronger Regulatory Infrastructure With a number of new legislations and amendments in place, including the recent overhaul of the FTL, the KFTC is seeking to reinforce the infrastructure for effective law enforcement. The areas where the KFTC is expected to provide more detailed regulations as discussed in the 2021 Plan are information exchange as a new type of collusive behavior, the new merger filing threshold based on the transaction value, plaintiffs' ability to access evidentiary materials in a follow-on damages lawsuit, and individuals' right to seek an injunctive relief. Industries Under Scrutiny The 2021 Plan makes reference to certain specific industries in relation to the KFTC's planned regulatory and enforcement efforts in 2021. For example, in relation to potential need to improve the standard terms and conditions, the KFTC refers to the OTT, crowd funding, delivery app and used-car sales businesses as potentially problematic businesses. Also referenced were automobile parts, machinery and fashion businesses in relation to a planned survey on subcontract price payments. Please refer to the attachment for more details of the six core task items. [Korean version]

  2021.01.27
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  Update on HR/Labor Law Amendments for the First Half of 2021 The following is an update on several important HR/Labor law amendments for 2021: 1. Amendments to the Labor Standards Act (the "LSA") An amendment to the LSA now allows companies to stipulate and deliver working conditions using electronic documents (Article 17 (2) and Article 67 (3) / to be amended and enforced as of January 5, 2021). A new proviso has been added to the law to allow companies to omit preparing a list of employees for the daily workers employed for less than 30 days (a proviso to Article 41 (1) to be amended and enforced as of January 5, 2021). New provisions have been added to the law to allow companies to introduce a flexible working hour system with a unit period of up to six months (the previous limit was three months) (Article 51-2 and Article 116 (1) 3. to be newly established / to be amended as of January 5, 2021 and enforced in a phased manner from April 6, 2021). The law has also been changed to introduce a maximum measurement period for a selective working hour system which has been extended to three months, but this only applies to employees engaged in research of new products or new technologies, and if a measurement period exceeding one month is set (by way of the required written agreement with the employee representative), it is required to provide a rest period for 11 consecutive hours between working days, and to pay an additional allowance for hours exceeding 40 hours per week based on a monthly average (Article 52 / to be amended as of January 5, 2021 and enforced in a phased manner from April 6, 2021). The LSA also was amended to add a provision requiring employers to take appropriate measures for an employee who has worked overtime under special circumstances and per the employee’s consent and an approval by the Minister of Employment and Labor, such as implementing a medical check-up or granting a rest period, in order to protect the employee’s health and well-being (Article 53 (7) / to be amended as of January 5, 2021 and enforced as of April 6, 2021). Starting from July 1, 2021, the enforcement of the weekly maximum working hours of 52 hours (= 40 regular hours/week + 12 overtime hours/week), including overtime and holiday work, will be expanded to private companies regularly employing 5 to 49 employees (Article 2 (1) 7.). Starting from January 1, 2021, the holidays of government offices under the Regulations on Holidays of Government Offices and substitute holidays therefor will be applicable as paid holidays for private companies regularly employing 30 to 299 employees (this requirement already applied to employers with 300 or more employees), and to substitute the prescribed holidays with other working days, a company is required to reach a written agreement with the employee representative (Article 55 (2)). 2. Amendments to the Equal Employment Opportunity and Work-Family Balance Assistance Act / to be enforced as of January 1, 2021) Starting from January 1, 2021, for private companies regularly employing 30 to 299 employees, if an employee applies for a reduction of working hours for the following reasons, the employer must grant it: to take care of his/her family or his/her own health, an employee who is 55 years or older to prepare for his/her retirement, and/or to allow an employee to pursue his/her studies. The working hour reduction may be between 15 to 30 working hours (if the employee normally works a 40 hour per week schedule, a reduced work schedule could range between ten to 25 working hours per week). The maximum period for the reduced working hour schedule is one year, and based on reasonable grounds (excluding study purposes), the period may be extended by up to two years (Article 22-3). Starting from December 8, 2020, a leave of absence for childcare may be split into two periods of leave (Article 19-4 (1)). 3. Minimum hourly wage increased to KRW 8,720 in 2021 (to be enforced as of January 1, 2021) The minimum hourly wage in 2021 is KRW 8,720, which is an increase of about 1.5% compared to the 2020 minimum hourly wage KRW 8,590. And among regular bonuses and cash welfare benefits, bonuses exceeding 15% of and welfare benefits exceeding 3% of the monthly calculated sum (KRW 1,822,480 based on 209 hours) of the 2021 minimum hourly wage (KRW 8,720) will be counted in calculation of the minimum wage (this is part of the phased expansion of application of such payments to the minimum wage calculation from 2019 to 2024). 4. Amendment to the Employment Insurance Act Provisions have been added to the law to allow certain artists prescribed by the Employment Insurance Act, upon obtaining employment insurance and satisfaction of certain requirements, to receive job-seeking (unemployment) benefits in the case of involuntary job change. Furthermore, if an insured artist cannot provide services due to childbirth, or miscarriage or stillbirth, she can receive maternity benefits, etc. (Article 77-2, 3, and 4 to be newly established / to be enforced as of July 1, 2021). 5. Amendments to the Act on the Collection of Insurance Premiums, Etc. for Employment Insurance and Industrial Accident Compensation Insurance The law has been amended to temporarily operate a special reporting period regarding industrial accident insurance of employees in special types of employment, and if such an employee reports a valid insurance relationship within a certain period, he/she may be exempted from payment of all or part of the industrial accident compensation premiums, etc. (Article 22-3 and Article 22-4 / to be amended and enforced as of January 5, 2021). Provisions also have been added to the law that cover an employer who has executed service provision contract with a service provider. Such an employer is required to insure the service provider via employment insurance, and if a service provision platform business operator executes a service provision platform contract with the business owner of a service provision business, he/she is required to report it to the Korea Workers’ Compensation & Welfare Service ("KCOMWEL"), and to conduct withholding on the employment insurance contributions of the service provider and the service provision business owner (Article 48-3 and 4 to be newly established / to be enforced as of July 1, 2021). 6. Amendment to the Industrial Accident Compensation Insurance Act This law has been amended so that a person who received medical care benefits can request confirmation from KCOMWEL on whether his/her contribution is excluded from the scope of the medical care benefits, and receive the overpaid amount. Furthermore, a spouse (including a common law spouse) or a relative closer than a first cousin of the business owner of a small or medium-sized enterprise, and who provides service for the business, may be insured upon the approval of KCOMWEL (Article 31(1) and Article 41-2 to be newly established, Article 124(2) / to be enforced as of June 9, 2021). 7. Amendment to the Wage Claim Guarantee Act Provisions have been added to this law so that salaries during the maternity leave period are included in the scope of substitute payment (Article 2 (3), Article 7 (2) 3. / to be enforced as of December 8, 2020, and if necessary, employees (including retirees) can apply for loans through the Ministry of Employment amd Labor for the cost of living, and the accounts to which the substitute payment has been paid can be protected from seizure. (Article 7-2, Article 11-2, Article 14, Article 19, and Article 23 / to be enforced as of June 9, 2021). [Korean version]

  2021.01.25
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  Vietnam Legal Update – Issuance of New Decree Implementing Labor Code 2019 On December 14, 2020, the Government issued Decree No. 145/2020/ND-CP guiding the implementation of the new Labor Code 2019 (“Labor Code 2019”) on working conditions and employment relationship, which will take effect from February 1, 2021 (“Decree No. 145”). Decree No. 145 replaces ten guiding decrees of the previous Labor Code 2012, and is one of the most comprehensive decrees in labor-related area, covering a wide range of important topics including without limitation to, labor contracts, termination of labor contracts, labor outsourcing, salaries, internal labor rules, gender equality at the workplace and labor disputes. 1. Internal Labor Rules Employer with ten or more employees must issue the internal labor rules in writing. Where the number of employees is below ten, there is no requirement for written internal labor rules, but the employer and employee must agree on labor discipline and liabilities in the labor contract.1 Internal labor rules must include the additional topics set out below, in addition to the five main topics under the previous law (i.e., code of conduct, working hours, safety and hygiene, protection of assets and business secrets, disciplinary measures and liabilities): protection against sexual harassment at the workplace and handling of sexual harassments; temporary transfer of employees to positions different from their job description; and persons with authority to handle labor disciplines.2 2. Sexual Harassment at the Workplace Labor Code 2019 added several important provisions regarding sexual harassment at the workplace, and Decree No. 145 provides more details on regulations against sexual harassment at the workplace. Sexual harassment at the workplace includes: physical behaviors including act, gesture, interaction, impact on body that is sexual or sexually implicit; verbal sexual abuse in a face-to-face conversation, via a phone call or other electronic means which carries sexual contents (whether explicit or implicit); non-verbal sexual abuse including body language, display or description of materials which are visually sexual or connected with sexual activity; such display/description could be direct or by way of electronic means.3 A workplace is broadly defined. Simply put, it refers to any place where an employee works in effect under agreement with or according to the assignment by an employer. It even includes work-related place or space (e.g., workshop, dinner, communication via electronic means, transport vehicles provided by an employer).4 3. Wage Scale Under the Labor Code 2019 and Decree No. 145, the employer can decide the wage scale in consultation with the representative organization of employees, and the employer is required to announce it at the workplace before implementation.5 The requirements for 5% wage gap between each level of the wage scale, and notification to labor authorities have been removed. Before Decree No. 145, the employer was required to formulate its wage scale ranging from a position requiring the lowest technical qualification to a position requiring the highest technical qualification. The gap between each wage level must be at least 5% and should be sufficient to encourage the professional development of the employees.6 The employer was also required to notify the district Office of Labor, Invalids, and Social Affairs.7 4. Report on Labor Use At the time of establishment, the employer will be required to declare the estimated number of employees with the business registration authority (i.e., the relevant Department of Planning and Investment) in accordance with the streamlined procedures under Decree No. 122/2020/ND-CP. Before Decree No. 145, the employer is required to make initial declaration of labor use at the Department of Labor, Invalids and Social Affairs (“DOLISA”).9 The employer will also be required to make periodic reports on change of labor use by June 5 (for any change during the first half of the year) and by December 5 (for any change during the whole year) to DOLISA via the National Public Service Portal and notify the district-level social insurance authority (where the employer’s headquarter, branch, or representative office is located) of such change by using the pro-forma report attached to Decree No. 145.10 5. Labor Contract with a Hired Director in State-Owned Enterprises Labor contract signed with a hired director of a State-owned enterprise must contain certain clauses as specified by Article 5 of Decree No. 145. The contract term with the hired director is maximum 36 months; in case the hired director is a foreigner, the contract term must not exceed the term of his/her work permit. This requirement applies to 100% State-owned enterprises and State-owned enterprises of which the State holds more than 50% charter capital or total voting shares. Labor contracts with hired directors of enterprises with the State holding up to 50% charter capital are treated as normal labor contracts under the Labor Code 2019.11 6. Notice on Unilateral Termination of Labor Contract Where the employee or the employer unilaterally terminates the labor contract with an advance notice in accordance with the Labor Code 2019, the terminating party will be required to give an advance notice to the other party. The notice period will be at least three working days, 30 days or 45 days for fixed-term contracts less than 12 months, fixed-term contracts from 12 to 36 months and indefinite-term contracts, respectively. Certain jobs and businesses are subject to a different advance notice requirement. Decree No. 145 specifies those jobs and businesses as follows: managerial positions in enterprises as prescribed in the Law on Enterprises (such as a sole proprietor, unlimited liability partner, chairman of the members’ council, member of the members’ council, company’s president, chairman of the board of management, member of the board of management, director or general director, and other managers as stipulated by the company’s charter) and the Law on Management and Use of State Capital Invested in Production and Businesses of Enterprises; aircraft crew; aircraft technical maintenance staff and aviation repair staff; flight dispatch and flight operation staff; crew working on Vietnamese ships operating overseas; and crew outsourced by Vietnamese enterprises to foreign seagoing vessels; and other cases as stipulated by law.14 If the employee or employer in the above categories wishes to unilaterally terminate the labor contract, they must serve an advance notice of at least (i) 120 days for indefinite-term labor contract and labor contract with a term of 12 months or more, or (ii) one fourth of the labor contract term for a labor contract with a term of fewer than 12 months.15 7. Void Labor Contract Decree No. 145 allows an employee and employer to opt for one of the followings if the labor contract between them is partially void: to amend the contract in accordance with the collective labor agreement and the laws; and to terminate the labor contract;16 It remains unclear as to whether the labor contract termination in this situation would be a mutual termination or a unilateral termination that either party may initiate. This may be subject to further clarification or interpretation by the labor authorities. Before Decree No. 145, the permitted options are to amend the contract or sign a new contract within three working days to continue the labor relationship. 17 Where a contract is held void due to a signing by an unauthorized signatory or violation of principles on entering a labor contract18 (i.e., the labor contract has not taken effect at all), Decree No. 145 allows the parties to (i) re-sign the contract in accordance with laws or (ii) terminate the contract.19 Before Decree No. 145, where the contract is held void due to a signing by an unauthorized signatory, the only option available is to re-sign the contract in accordance with the law.20 8. Labor Outsourcing A labor outsourcing enterprise must deposit VND 2 billion (approximately USD 86,000) as a condition for the issuance of an operating license.21 The deposit can only be used for specific purposes such as payment of salary, social insurance costs where the labor outsourcing enterprise has no sufficient fund or fails to pay within 60 days from the due date.22 Under Decree No. 145, the scope of the permitted purposes is extended to cover the benefits enjoyed by dispatched employees under their labor contracts, collective labor agreements or internal rules of the labor outsourcing enterprise.23 Within 30 days from the drawdown date of the deposit, the labor outsourcing enterprise must replenish the deposit.24 Any failure to replenish the deposit can now be punishable by revocation of the operating license under Decree No. 145.25 9. Overtime of More Than 200 Hours but Not Exceeding 300 Hours Per Year Under Article 107.3 of the Labor Code 2019, aside from the prescribed situations where an employer is permitted to have its employees work overtime for more than 200 hours but not exceeding 300 hours per year, the Government is permitted to add other situations at its discretion. In Decree No.145, the Government added following situations: situations where there is an urgent work requirement which cannot be delayed due to objective factors/reasons and in direct connection with the public duties of the State agencies and the State units. These are in addition to the special situations under Article 108 of Labor Code 2019 where an employer can require unlimited overtime from its employees in case of [army] mobilization, natural disasters and fire; provision of public service; medical examination and treatment service; education and vocational education service; and production and business at enterprise of which normal working hours are no more than 44 hours per week (for reference, the normal working hours at an enterprise should be no more than 48 hours per week).26 [Korean version] 1 Article 69.1 of Decree No. 145 2 Article 69.2 of Decree No. 145 3 Article 84.2 of Decree No. 145 4 Article 84.3 of Decree No. 145 5 Article 93 of the Labor Code 2019, Articles 41.1 and 43.1(b) of Decree 145 6 Article 93.1 of the Labor Code 2012, Article 7.2 of Decree 49/2013/ND-CP 7 Article 93.2 of the Labor Code 2012, Article 7.6 of Decree 49/2013/ND-CP 8 Article 4.1 of Decree No. 145, Decree No. 122/2020/ND-CP 9 Article 8.1 of Decree No. 03/2014/ND-CP 10 Article 4.2 of Decree No. 145 11 Article 5 and Article 6 of Decree No. 145 12 Articles 35.1 and 36.2 of Labor Code 2019 13 Article 4.24 of Law on Enterprises 2020 14 Article 7.1 of Decree No. 145 15 Article 7.2 of Decree No. 145 16 Article 9.1 and Article 9.3 of Decree No. 145 17 Article 10 of Decree No. 44/2013/ND-CP 18 Article 15 of the Labor Code 2019. The principles on entering a labor contract include voluntariness, equality, good faith, cooperation, honesty, and the freedom to enter labor contracts without contradicting the laws, the company’s collective labor agreement and social ethics. 19 Article 10.1 and Article 10.3 of Decree No. 145 20 Article 11.1 of Decree No. 44/2013/ND-CP 21 Article 21.2 of Decree No. 145, Article 5.2 of Decree No. 29/2019/ND-CP 22 Article 15.2, Article 18.1, Article 19.1 of Decree No. 145; Article 14, Article 17.1 and Article 18.1 of Decree No. 29/2019/ND-CP 23 Article 15.2 of Decree No. 145 24 Article 20.1 of Decree No. 145, Article 19.1 of Decree No. 29/2019/ND-CP 25 Article 20.2 of Decree No. 145, Article 19.2 of Decree No. 29/2019/ND-CP 26 Article 61 of Decree No. 145

  2021.01.21
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  Proposed Partial Amendment to the PIPA On January 6, 2021, the Personal Information Protection Commission (the "PIPC") announced a draft bill to partially amend the Personal Information Protection Act (PIPA) (the "Proposed Amendment"). The Proposed Amendment, among others: unifies the regulations that apply to online and offline businesses (the level of regulation on offline businesses is expected to be strengthened to the level similar to the current regulation on online service providers); strengthens the rights of data subjects, including the introduction of the right to request transmission of personal information; promotes economic rather than criminal penalties by limiting the scope of criminal sanctions and expanding the scope and calculation standards of administrative fines; establishes operational regulations for mobile visual data processing devices, such as drones and autonomous vehicles; and introduces a basis for transferring personal information abroad other than a data subject's consent, as well as the PIPC's right to suspend overseas transfer. Please refer to the attachment for the main details of the Proposed Amendment. The PIPC will collect opinions on the Proposed Amendment until February 16, 2021. [Korean version]

  2021.01.14
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  Legal Update Concerning the Korea Auto Industry for the FIrst Half of 2021: Connected Cars & Autonomous-Driving Vehicles Please refer to the attachment for legal updates concerning connected cars and autonomous-driving vehicles in the Korean auto industry for the first half of 2021. Future Level 3 autonomous vehicles must be equipped with autonomous driving information recording systems. Temporary driving permits for autonomous vehicles are expected to come. On December 15, 2020, MOLIT released ethical guidelines for autonomous vehicles, cybersecurity guidelines, and production and safety guidelines for Level 4 autonomous vehicles. Test driving regions have been selected for autonomous driving of unmanned shuttles and robot taxis. MOLIT and the Ministry of Science and ICT are continuing discussions to select the V2X communication standard for C-ITS. By the first half of 2021, national standards for areas such as classification, definition and expression format of autonomous vehicle data will be established. A precision guidance system on over 14,000 km of national roads will be built by 2022. [Korean version]

  2021.01.12
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