Labor reform negotiations end without an agreement

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Labor reform negotiations end without an agreement

The government and labor unions failed to reach an agreement on a draft proposal to reform the labor market after three days of negotiations, suggesting that it will be difficult for the government to make the changes it wants to help revive the economy next year.

The Economic and Social Development Commission and the Federation of Korean Trade Unions negotiated into the wee hours on Thursday morning.

The commission is pushing the government’s labor market reform plan with a sense of urgency, believing that it is crucial for an economic recovery next year.

Although the government has not announced details of its proposal, it’s known to focus on improving conditions for irregular workers. The plan includes raising pay, eliminating discrimination against irregular workers, revamping the wage system in the public sector and reducing work hours.

The government is revising the draft and plans to announce the final version Monday along with its 2015 economic policy direction.

Kim Dae-hwan, chairman of the commission, emphasized there is not much time left, and Lee Ki-kweon, minister of employment and labor, said reform can’t be postponed any longer.

If the government uncompromisingly pushes ahead with its plan, there could be conflicts. The commission and the government are trying hard to iron out their differences with labor and management before the scheduled announcement.

Until Tuesday, there was hope that a compromise might be reached.

“There will be a joint agreement on specific plans today,” said Minister Lee on Tuesday morning. “We can expect an agreement equivalent to the Wassenaar Arrangement that helped put the Dutch economy get back on track.”

“There can be a statement containing some level of specific plans,” said an official at the Korean Employers Federation.

According to those who attended the closed-door meeting that started at 5 p.m. Monday, labor union representatives seemed willing to consider the government’s reform plan.

But on Tuesday night, the trade union federation said it is absurd to make an agreement without an in-depth discussion of each issues proposed by the government. It told the government more time was needed for negotiations on specific issues.

Chairman Kim warned he would resign if there is no compromise on Wednesday.

“There will be no Plan B,” said Labor Minister Lee.

The government is in such a hurry to carry out the plan because there is not much time to implement the measures.

It plans to legislate the plan by the end of this year and execute it within the first six months of next year.

At least three months will be needed for it to pass the National Assembly.

A new phrase for the government’s economic policy will be structural reform, as many senior government officials, including Finance Minister Choi Kyung-hwan, have said.

The first target of government reform will be the labor market, and there is a consensus in the government that flexibility is urgently needed.

But Choi’s recent remarks that regular workers are overprotected sparked strong opposition from the labor unions and complicated efforts to expedite the government’s plans.

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