Rectify wrong hiring practices

The judiciary and government authorities have jointly put their feet down and toughened penalties against illegal hiring and exploitation of temporary workers from a labor pool of subcontractors. The Supreme Court last month upheld a high court ruling and ordered GM Korea (formerly GM Daewoo) chief executive and owners of the automaker’s subcontractors to pay fines for the off-the-book labor practice.

The Ministry of Employment and Labor also discovered that 1,978 sales workers of suppliers to E-Mart were illegally put to work in the big-box store chain, and ordered the retail giant to hire them legally. If E-Mart refuses to employ them as part of the regular work force, it will have to pay a fine of 10 million won ($9,234) each for the workers for illegal labor practices.

With the latest development in the labor front, the judiciary and administrative branches joined forces to root out the long customary unreported hiring practices in large companies to save costs and to avoid the hassle of layoffs.

The synchronized action of the judiciary and the government will most likely send considerable repercussions to a number of workplaces around the country. Companies which have relied on indirect hiring to make up for their labor shortage would have to either place the unreported workers on official payroll or cease the supply contracts with their suppliers and return the workers to their original employers. Under the current labor law, any form of dispatch work is deemed illegal except for some fields that require special expertise, technology and experience.

The Labor Ministry said that it hopes the new set of actions helps enhance benefits and conditions for nonregular workers in the country. However, employers fear reduction in regular jobs if staff-sharing practice with affiliates and subcontractors is banned. Some workers dispatched from small- and medium-sized contractors may soon gain regular status, but large companies would have to reduce their regular work quota in order to accommodate the new force.

If using a staff of subcontractors is illegal, it should be stopped. But if the action can hurt corporate management and employment in the long run, authorities should revise the labor laws to better incorporate the employer’s situation as well. Authorities could extend the scope of legal hiring of dispatched workers or enhance flexibility in regular work hiring guidelines. They could also introduce the halfway type of work between regular and nonregular work force that is currently under consideration in Japan.