The presidential office on Wednesday urged representatives of labor, management and the government to compromise on contentious reform measures aimed at providing greater flexibility of the nation’s rigid labor market, a day after they failed to narrow their differences within the deadline.

The tripartite committee had set Tuesday as the deadline for concluding months of meetings on how to overhaul the labor market to create more good quality jobs.

The three parties have reportedly reached an agreement on issues including “ordinary wages,” plans to reduce working hours and extension of the retirement age.

However, the dialogue ended in a rupture Tuesday, as labor strongly resisted a government proposal to grant employers more discretion in firing underperforming regular workers. Management, for their part, opposed the labor groups’ suggestion to force them to give nonregular workers regular status if their work is similar to that of regular workers.

The committee resumed talks on Wednesday afternoon.

The panel, titled the Economic and Social Development Commission, is a consultative body formed of representatives of labor, management and the government.

The three-way dialogue was resumed last year as the Federation of Korean Trade Unions, one of the two major union umbrella groups, returned to the panel.

The presidential office, meanwhile, pressed the panel to find common ground stressing it is necessary for nation’s economic growth and future generations.

“Cheong Wa Dae would keep an eye on the negotiation process,” said Min Kyung-wook, spokesman for President Park Geun-hye. “The office hopes for a meaningful compromise as the people have high expectations of that,” he said.

Senior presidential secretary An Chong-bum also urged the members of the panel to make concessions for the greater good.

The overhaul of the labor market is one of the reform measures Park is pushing as part of her three-year economic revitalization plan. The president has argued that labor reform is key to job creation, particularly for young people struggling to find suitable jobs at a time when businesses are hesitant to hire new workers.

The Organization for Economic Cooperation and Development said last month that South Korea needed to resolve the differences between regular and nonregular workers in terms of pay and job security to boost productivity and encourage more female employment.

The three parties have been locking horns as they differ on how to tackle a divide between regular workers and nonregular workers.

The government and the management believe that Korea’s labor market is rigid because regular workers are being overprotected. This, in turn, makes businesses reluctant to hire more regular workers and rely on nonregular workers instead, because they can fire the latter more easily, and employing them costs less.

To increase labor market flexibility, the government and the management have urged labor groups to accept the idea of lifting some labor regulations for employers so that they can replace underperforming workers. But labor groups oppose the idea, saying that it would eventually allow businesses seek massive lay-offs and pressure poorly performing workers to accept salary reductions.

The idea is intended to force regular workers out and replace them with nonregular workers, which would lower the overall quality of jobs, the labor groups claimed.

By Cho Chung-un (christory@heraldcorp.com)