Ensuring flexibility in the 52-hour workweek (KOR)

The new government is embarking on labor reform with a focus on changing the rigid work hours and pay system. It proposes flexibility in the 52-hour workweek and work terms for senior employees.

In an emergency economy-related cabinet meeting last week, Deputy Prime Minister for Economic Affairs Choo Kyung-ho, who also serves as finance minister, pointed out that labor rules and customs drawn up in the manufacturing-focused industrial period have become “clothes that no longer fit” in the age of advanced and diversified economic and industrial structure. He declared that the Yoon Suk-yeol administration will start labor reforms to preemptively respond to a shift in our industrial structure to help address accumulated inefficiency, disparities and imbalance in the labor market.

The reform outline announced by the Ministry of Employment and Labor last Thursday proposes flexibility in the draconian 52-hour workweek (12-hour overtime added to the maximum 40 hours of work per week). The ministry wants to condone overtime beyond 12 hours in a certain week if maximum overtime does not exceed 48 hours per month.

The 52-hour workweek has been enforced to prevent overwork. But the uniformity has made it difficult to keep up with the workload when demand is high. As a result, labor and management had to first seek a mutual agreement on their extended work hours and approval from the government every time. In most advanced economies, overtime is coordinated between the labor and management and does not fall under government oversight.

The Yoon administration has embarked on fixing the labor terms in line with global standards instead of being swayed by powerful umbrella unions as in the past. But there is much work and many differences to be ironed out. In developed countries, replacement workers are allowed during strikes. While campaigning, Yoon agreed to the seating of a labor representative on boards of public corporations. Labor conflict, a primary source of the weakening economy, could worsen if hard-line unionists gain influence in management.

The Korea Enterprises Federation (KEF) pointed out the labor reform outline of the new government does not include effective ways to address the imbalance of power between employers and employees. The KEF demanded the labor ministry allow companies to use replacement workers and ban occupation of worksites by labor.

To rationalize work hours, the Basic Labor Act should be revised. The National Assembly has been mired in an impasse. But bipartisanship is required to carry out labor reforms to enhance competitiveness of our economy in the fourth industrial revolution age.