Pay, working hours talks remain fractious

By Suk Gee-hyun
  • Published : Apr 7, 2014 - 20:57
  • Updated : Apr 7, 2014 - 20:57
Political parties, businesses and labor unions have made little progress in closing the gap in their positions on key labor issues in the run-up to a public hearing this week.

The subcommittee for the National Assembly’s Environment and Labor Committee convened Monday to seek an agreement on ordinary wages and work hours, the biggest areas of contention dividing the management and labor circles.

But pundits questioned whether the subcommittee would yield promising results, given their differences in how to reduce the legal maximum work hours and what should be recognized as ordinary wages.

“There was an active, honest discussion between the labor and business groups,” ruling Saenuri Party lawmaker Lee Jong-hoon said after the meeting. “But to what degree each agenda should be handled has not been settled yet.”

The subcommittee has already consented to reduce the maximum working hours from the current 68 hours per week to 52 hours, which the government believes is a key condition for achieving the administration’s goal of 70 percent employment by 2015.

The National Assembly passed a bill in February to cut the maximum working hours from 68 ― 40 statutory working hours, 12 hours of overtime and 16 hours for holiday work ― to 52 hours including holiday work as overtime.

But the ruling and opposition parties are split on the time table for its enforcement.

The government believes the cut in work hours should be gradual over two years for a soft landing in 2016, as it could incur a hike in costs and labor-related problems especially in small and mid-sized enterprises.

The opposition parties and labor groups claim the law should be immediately enforced to guarantee workers’ rights and create more jobs. According to the Labor Ministry, more than 45 percent of Korean employees worked more than the designated 40 statutory work hours last year.

While still at loggerheads, the subcommittee members discussed a potential compromise in attempt to lessen the burden of SMEs, such as allowing eight hours of additional work for six months a year, according to reports.

The ordinary wage issue is another matter dampening the Park Geun-hye administration’s ambition to settle the labor controversy through compromise by the end of the year.

The members failed to find a middle ground in what to be included in ordinary wage calculations. These are used as a basis to gauge overtime, nighttime and holiday pay, and later affects the size of an individual’s severance package.

The government said it would revise the Labor Standards Act based on the Supreme Court’s 2013 landmark ruling that bonuses paid at regular intervals exceeding one month would also be regarded as part of ordinary wages while exempting welfare benefits such as vacation and birthday bonuses.

Businesses have strongly opposed the government’s proposal, as it could cause labor costs to rise more than 20 percent. They insist that only bonuses paid on a regular monthly basis should be categorized as ordinary wages.

“We’ll try to reach a compromise until the 14th,” said Rhin Gye-ryun, a DP lawmaker who heads the parliamentary committee.

The subcommittee will hold a public hearing for two days starting Wednesday and then report the result to the regular session of the National Assembly’s Environment and Labor Committee on April 15.

The committee said agendas that fail to be legislated will be further discussed by the Economic and Social Development Commission.

By Suk Gee-hyun (