Asia-Pacific employment law bulletin 2023
On 10 May 2022, the South Korean people elected a new president. In contrast to the former administration, which was very supportive of employee and labour union rights, new President Yoon Seok-Yeol and his party have announced plans to introduce more business-friendly initiatives with respect to labour and employment laws and their enforcement.
Possible changes to overtime regulations
One of the business-friendly initiatives the new administration is contemplating is to provide flexibility with respect to overtime regulations. Korea currently operates a 52-hour work week system, out of which 40 are standard working hours and 12 hours fall under the statutory cap for weekly overtime work. In addition, the new administration is discussing changing the period for calculating overtime restrictions from one week to a longer period (e.g., one month). If implemented, we expect this change to allow more flexibility on managing overtime work.
Objections by labour organisations
President Yoon has also emphasized that he will strictly enforce the rule of law between labour and management. In connection with this, in November 2022, the Cargo Truckers Solidarity Union, under the wing of the militant labour umbrella Korean Confederation of Trade Unions (KCTU), launched a nationwide strike, urging the government to meet its demand to make minimum freight rates permanent to improve their working conditions. As the strike entered its sixth day, President Yoon issued an executive order for striking cement-field cargo truck drivers to return to work. He also specifically denounced any attack by strikers on their fellow truckers refusing to participate in the walkout as an “unacceptable criminal behavior,” stating, “I will firmly establish the rule of law between labour and management during my tenure. I'll never compromise with illegalities. Responsibility for illegal acts will be strictly pursued to the end.”
This stance of dealing with labour unions represents a significant departure from his predecessor and may be a sign of his stance going forward with respect to labour strikes that have the potential to impact the national economy.
Notwithstanding the above, as various labour organizations have objected to President Yoon’s announced plans and given the reality that President Yoon’s party occupies only a minority in the National Assembly, we will have to wait and see how much change President Yoon is able to make in reality.
What is next?
Korea still remains a relatively employee-friendly employment jurisdiction and failure to comply with Korean employment laws can often result in criminal liability on the company and its representative. The new administration has also stated that it will enforce the basic labour law principles, such as the 52 hour work week, payment of overtime allowances, among other things considering the ongoing criticism his administration has received from the labour side. Therefore, Korean employers should continue to be careful to fully evaluate candidates before hiring them and complying with Korean employment laws.
Kim & Chang: Matthew Jones and Cho Beom Kon
Kathleen Healy Partner
Stephanie Chiu Counsel
Ada Chan Associate
Fan Li Associate
River He Associate