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The labor reform slog

The government announced new administrative guidelines that go into effect Monday allowing companies to dismiss underperforming employees. They also revise hiring criteria to base them on the potential and working capacity of an individual rather than academic backgrounds and test scores.

These guidelines forced the Federation of Korea Trade Unions to walk away from a landmark agreement on labor-sector reform and the tripartite talks on reforms with companies and the government.

The government’s decision to push ahead despite strong opposition from labor underscores its will to push ahead with a reform agenda. Labor-sector reforms cannot be further delayed. The World Economic Forum held in Davos in Switzerland warned that 1 million jobs will be lost over the next five years. Korea’s unemployment ratio for the young is already at an all-time high.

We need to recreate a working environment that does not scare companies away from new hires and give them the flexibility they need. To build such an environment, large companies must change the configuration of their workforces, which now revolve around permanent work forces whose jobs are safe until retirement. Staffers currently are assured of annual salary hikes regardless of their performance. The government hopes the guidelines would bring about radical change in the working environment. It could serve as a manual for employers in their aim to change structures of wage, hiring and layoff systems.

Due to strong opposition from the labor sector, companies won’t be able to adopt the system right away. Employers also are not happy about setting a precedent of government meddling in their authority in human resources management. There is also the question of binding force in the new administrative guidelines.

They need to be amended in the workplace. The labor sector should not resort to knee-jerk opposition. The umbrella union group vowed to resist the new measures through street protests. But workers must face the music: gone are the days when jobs are for life. If there are areas for modification, they must be addressed through negotiations. Bargaining is possible when parties are sincere. Nothing can be solved through strikes.

JoongAng Ilbo, Jan. 23, Page 30