[OUTLOOK]A fight for balanced labor rights

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[OUTLOOK]A fight for balanced labor rights

Even advanced countries in Europe are in a state of emergency on the economic front. High technology and sophisticated managerial approaches have not solved their stagnation.
In Germany, the unemployment rate has soared to 8 percent, leaving 520,000 people jobless. Economists suggested two solutions: Reduce corporate taxes and strengthen labor flexibility. The costs German businesses bear account for about 65 percent of their earnings ― 45 percent in corporate taxes and 20 percent in social security tax.
In addition, 85 percent of all workers are protected by a welfare safety net. Business leaders may complain, but they fear taking measures that might cut their labor expenses because they confront the world’s strongest labor unions.
Korean businesses pay taxes amounting to about 35 percent of their earnings, including 25 percent in corporate tax and about 10 percent in social insurance tax. So they still have leeway in that regard, but the problem of labor inflexibility requires a solution. When it comes to flexibility, Korea’s labor force is about in the middle for the members of the Organization for Economic Cooperation and Development. The mean value is similar to that of Germany.
But the problem is that the figure is the result of offsetting the rigidity of regular work with the extreme flexibility of irregular work. Regular workers are protected by all kinds of labor laws and labor unions, whereas non-contract workers are vulnerable to external conditions. Since the foreign exchange crisis of 1997, such workers as a percentage of the workforce have risen sharply from 27.3 percent in 2001 to 37 percent (5.4 million people) in 2004. If non-union jobs are a way to cut wages and achieve employment flexibility, then an increase in the number of irregular workers will lead to Korea becoming into a polarized society.
To solve this problem, the government came up with a bill to cover temporary workers. But the Korean Confederation of Trade Unions and the Democratic Labor Party said it would oppose the bill and staged a strike as a warning.
Two issues are involved: First, unlike existing labor laws, the government’s proposed bill set a period of three years as the fixed term for irregular workers.
Labor circles are concerned that the provision may produce masses of temporary workers with three-year contracts, while the government is confident that the clause will help reduce non-union workers because it clearly prohibits dismissal without just cause and discrimination of working conditions upon the termination of contract.
Second, the problem of “dispatched workers” ― meaning the employees of subcontractors ― is more difficult.
The government bill intends to expand the types and scope of business that can use dispatched workers and to promote the legitimate replacement of union labor with temporary replacements by strictly prohibiting illegal employment of dispatch workers.
This is the result of taking into account the fact that the practice of contracting out work cannot be changed overnight and that dispatched workers have far better working conditions, pay and social insurance application rates than temporary workers. Legitimatizing dispatched workers is the government’s clever way of solving two problems simultaneously: the need for labor flexibility and the need for better treatment of irregular workers.
Labor unions interpret this differently. In a situation where even skilled workers face a growing risk of being replaced, they say, there will be an overflow of dispatched workers when dispatches are encouraged legally. They say they cannot abide a bill that will create “labor markets of three-year contracts and dispatched workers all across the country.”
The reason for conflicting interpretations over the same phrase is, above all, a lack of trust. The government firmly believes that there will be no problem because the bill provides strong punishment for violations.
Government compliance measures include fines of up to 100 million won ($98,700) for discriminatory treatment, imprisonment up to three years and penalties for illegal dispatches. There is also enforcement clauses of compulsory employment of dispatched workers after three years.
Nevertheless, the Korean Confederation of Trade Unions argues that the possibility of abuse cannot be eliminated with only punishment and regulations in a situation where expedient practices will prevail. To the government’s appeal for acceptance on the basis of good faith, the confederation responds that it cannot believe the government. The Democratic Labor Party goes a step further. The party argues that the dispatched worker system should be entirely abolished and such workers be turned to regular employees, and that the labor unions should select personnel and make contracts by exercising the right to supply labor.
At a juncture when even advanced countries in Europe have enhanced labor flexibility in order to compete, the government bill, which takes into consideration what businesses can pay and the work force reality, looks like a wise alternative. But it is certainly a difficult question how to prevent large businesses from exercising abusive power over contractors and employers’ from resorting to expediencies. Aside from the unrealistic alternative of the Democratic Labor Party, it is an urgent task to persuade the confederation which will spearhead the opposition to the bill. Before trying to pass the bill, the government had better discuss it again with the labor confederation when it returns to the Tripartite Commission.
Relations between labor and the government are laden with emotion, especially between the unions and the present administration. In other words, it is clash between the labor community that cannot believe anything anymore and the government that thinks it is time for the labor community to make concessions.
If the ambitious alternatives the government has offered after a long time are blocked by mistrust, then there is no other way than to continue dialogue until the two sides come to understand each other. But labor unions now should show a mature attitude and retreat a little. They need to watch coolly our economy as it heads toward the threshold of $20,000 per capita in national income.

* The writer is a professor of sociology at Seoul National University. Translation by the JoongAng Daily staff.

by Song Ho-keun
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