52-hour workweek change may pit firms against unions

Industry

Published: 17 Dec. 2022, 07:00

52-hour workweek change may pit firms against unions

[SHUTTERSTOCK]

Friction between companies and unions is expected after the government was advised to relax labor regulations, particularly the 52-hour workweek.

The Future Labor Research Council, an advisory group formed by the Yoon Suk-yeol administration in July, suggested changing the current 52-hour workweek to a more flexible system counting working hours by the month, quarter, half-year or year rather than a week.

This would allow employees to work more during peak seasons and less when the workload is lighter.

The current law mandates that overtime cannot exceed 12 hours, on top of a 40-hour workweek, capping the total hours at 52.

Under a more flexible system, total overtime hours would be 52 hours per month, 140 hours per quarter, 250 hours per half-year and 440 hours per year.

Such a change would be welcomed by IT companies and start-ups that have heavy workloads during peak seasons.

“There are employees who want to work more and earn more rewards even though they are not founders or executives,” said an executive at an IT start-up.

“I hope this would be a trigger for the law to become more flexible and adjusted to reality.”

But unions argue this may lead to the bad old days of employees being overworked.

“Death from overwork became a social issue in the IT industry, which led to the forming of labor unions,” said Seo Seung-wook, head of the union at Kakao.

“This is why the 52-hour workweek system was made."

Some say such a change could boost the number of unions, especially in the IT industry.

“If the law gets adjusted and side effects arise, there is a possibility that IT labor unions will expand again,” said Oh Se-yoon, head of Naver’s union.

Theoretically, some people may end up working up to 69 hours a week if working hours are tabulated by the month, but the advisory group says this isn't likely.

“If the hours are counted on a yearly basis, there is a risk that employees may be exposed to overwork,” a spokesperson for the Future Labor Research Council said.

“To prevent such cases, total hours of work will be reduced. For instance, if working hours are counted by quarters, a total of 156 hours will be allowed for extended work. Of the 156 hours, employees will have to work for only 90 percent or 140 hours.”

Cargo trucks are on the move at Uiwang Inland Container Depot in Gyeonggi on Dec. 12, after a 16-day-trucker strike ended on Dec. 9. [NEWS1]

The council also recommended increasing the retirement age to above 60 years old, scrapping the current salary system based on seniority to a system based on performance.

This advice dovetails with the rapid aging of the Korean workforce. Goldman Sachs has forecast that Korea’s economic growth will drop to 0.8 percent in the 2040s from the current average of 2 percent and plunge to -0.1 percent and -0.2 percent in 2060 and 2070, respectively, as the country ages.

Korea has been warned that its gross domestic product will be lower than that of the Philippines and Malaysia by 2075.

With Korea ranking the lowest in terms of its birth rate, the country’s economy may become smaller than those of high-population countries, such as Indonesia, Egypt and Nigeria.

“For consistent economic motivation, continuous hiring of seniors is necessary,” the council said, stressing the need to amend the current wage system, where people with more years of experience are paid more.

Another recommendation was to establish administrative institutions for labor statistics, like the U.S. Bureau of Labor Statistics, to follow up on the structural changes in the labor market.

The key to all these changes, however, would be public sentiment, especially minimizing any backlash from labor.

“I agree that start-up companies would need their employees to work more than 52 hours a week,” said Kim Hee-young, a labor attorney at Haemil, a labor law firm.

“But counting working hours by longer periods, like 6 months or a year is too much.

"Working over 60 hours a week may be considered an industrial accident due to overwork and applied in the Industrial Accident Compensation Insurance Act."

BY KIM KI-CHAN, YU SUNG-KUK [cho.jungwoo1@joongang.co.kr]