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National Assembly passes 10 labor-related amendment bills

 

National Assembly passes 10 labor-related amendment bills, including Trade Union and Labour Relation Adjustment Act, Labor Standards Act, Employment Insurance Act, and Industrial Accident Compensation Insurance Act

The bills passed include bills aimed to amend laws relevant to ratifying ILO Fundamental Conventions on Freedom of Association

Flexible work hours system and selective work hours system to be reformed

The dependent self-employed to be subject to the statutory subscription to employment insurance and benefit from reinforced industrial accident compensation from relevant insurance system

-Dec, 9(Wed) 2020-

 

□   At the regular session of the National Assembly on December 9, 10 amendment bills* proposed by the Ministry of Employment and Labor were approved. The passed amendment bills include partial amendments to the Trade Union and Labour Relation Adjustment Act (TULRAA), Act on the Establishment and Operation, etc. of Public Officials’ Trade Unions (Public Service Union Act), and the Act on the Establishment and Operation, etc. of Teachers’ Unions, the laws relevant to ratifying ILO Fundamental Conventions on Freedom of Association, partial amendments to Labor Standards Act which would bring changes to the unit period and adjustment period of flexible work hours system and selective work hours system, partial amendments to the Employment Insurance Act and the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance which would make subscription to employment insurance mandatory for the dependent self-employed, and partial amendments to the Industrial Accident Compensation Insurance Act which would expand application of industrial accident compensation insurance for the dependent self-employed.

* Trade Union and Labour Relation Adjustment Act (TULRAA), Act on the Establishment and Operation, etc. of Public Officials’ Trade Unions (Public Service Union Act), Act on the Establishment and Operation, etc. of Teachers’ Unions, Labor Standards Act, Employment Insurance Act, Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance, Industrial Accident Compensation Insurance Act, Special Act on the Promotion of Youth Employment, Human Resources Development Service of Korea Act, Labor Relations Commission Act

Amendment bill for TULRAA (Enforcement: six months from the day of its promulgation)

The partial amendments include changes that would allow ratification of ILO Fundamental Conventions on Freedom of Association and legislated supplementary measures that take into account the special characteristics of Korean industrial relations.

<1> Eligibility for trade union membership

Deleted the proviso under Article 2(4)(d)**, which was interpreted* as restricting enterprise-level trade union membership for the unemployed and dismissed workers.

* Supreme Court Decision : The proviso of Article 2(4)d of TULRAA was included for the cases when an union member who is dismissed by his/her employer and denied his/her worker status, thereby should be only applied in limited cases. The scope of “worker” as provided by Articles 2(1) and 2(4)d of TULRAA not only includes a person who is employed by a certain employer and working in practice, but also a person who is temporarily unemployed and looking for a job, thereby included as those whose fundamental labor rights should be guaranteed (2001Du8568).

** Article 2(4)d of TULRAA The term “trade union” means an organization or associated organizations of workers, which is formed in voluntary and collective manner upon the workers’ initiative for the purpose of maintaining and improving their working conditions and enhancing their economic and social status: Provided, That an organization shall not be regarded as a trade union in cases falling under any of the following subparagraphs:

(d) Where those who are not workers are allowed to join it <The following to be deleted>: Provided, That a dismissed person shall not be regarded as a person who is not a worker, until a review decision is made by the National Labor Relations Commission when he has made an application to the Labor Relations Commission for remedies for unfair labor practices;

This will allow trade unions to autonomously determine membership qualifications according to their bylaws regardless of organizational type.

<2> Eligibility for union officers and delegates for enterprise-level unions

It is prescribed by principle that union officers and delegates of enterprise-level unions can be determined according to a union's bylaws.

Yet, the roles and importance* of union officers and delegates in enterprise-level industrial relations were taken into account.

* Enterprise-level union officers and delegates contact with the management on a daily basis, lead collective bargaining and industrial action, and play a critical role in the union’s important decision-making process.

- As such, union officers and delegates of enterprise-level unions shall be elected from among union members who are incumbent workers of the business or place of business.

<3> Union activities by union members who are not employed at a enterprise

It is prescribed that union members who are not engaged in a businesses or place of business may participate in trade union activities to the extent that it does not interfere with an efficient business operation of the employer.

<4> Repealing the provision that prohibits wage payment to full-time officers of trade union, and restructuring the time-off system

The payment ban provision, which was misconstrued as an intervention by the state in industrial relations, has been repealed.

- Payment of wages is allowed for individual who is engaed in affairs of the trade union while being paid by the employer (persons eligible for the time-off system), but only within the maximum time-off limit.

In addition, parts that prescribe matters including cases exceeding the maximum time-off limit in collective agreements or employer consent shall be nullified.

- Where an employer pays wages that exceed the maximum time-off limit, it shall be punished as an unfair labor practice.

<5> Good-faith bargaining and ban on discrimination for individual bargaining

It is prescribed that when individual bargaining is conducted with the employer’s consent, the employer shall bargain with all unions that have demanded bargaining in good faith, and shall not discriminate.

<6> Establishing grounds for merging bargaining units within an establishment

Previously, there were grounds for dividing bargaining units in one business or establishment for reasons including wide differences in working conditions, but there were no grounds for merging separated bargaining units when situations changed.

Therefore, grounds for merging separated bargaining units have been established to remedy legislative defects.

 

<7> State/local government responsibilities to enable unions to choose between various bargaining methods

It is prescribed that the state and local governments have a responsibility to make efforts to facilitate active use of various bargaining methods including, enterprise-level, industry-level, and national-level bargaining.

<8> Extension of maximum effective period of collective agreements (from two yearsto three years)

Taking account of a variety of factors including the socio-economic changes, bargaining expenses, etc., the maximum effective period of collective agreement is extended to three years.

This allows the labor and management to set an effective period of collective agreement within three years based on mutual agreement according to the characteristics or type of the establishment or industry.

<9> Prohibiting industrial actions that interfere with business operation by dismissing an employer’s right of occupation

The basic principle of industrial action prohibits industrial actions that interfere with business operation by dismissing an employer’s right of occupation.

This reflects the intention that the right to collective action, the right of not-striking workers to work, and the employer’s right to business operation are all fundamental rights that should be respected.

<10> Restricting the rights of union members who are not employees

It is prescribed that union members who are not employees shall be excluded from calculation of the number of members when setting the maximum time-off limit, deciding the representative bargaining trade union, and taking votes on industrial activities.

This is to ensure that the intentions of union members who are employees are accurately reflected in the official decision-making process of the trade union (including whether or not to initiate industrial activities).

Amendment bill for Public Service Union Act(Enforcement: six months from the day of its promulgation)

 

Expanding the eligibility to join public officials’ trade union and modifying the provision that restricts joining the union

Previously, the Public Service Union Act allowed incumbent public officers who are general public officials of grade six or below, and special public officers who are equivalent to general public officers of grade six or below that engage in administrating foreign affairs and managing diplomatic information among public officials in extraordinary civil service and in special service, to join trade unions. The ILO recommended to improve the status quo*.

* Union member qualification is a matter that should be determined by union bylawsIt urged to “recognize union member qualification of dismissed public officials” (on March 2012, March 2014, and June 2017).

In response, the amendment bill for the Public Service Union Act allows retired public officers to join trade unions according to the union's bylaws, resolving the dispute on union membership eligibility which is an issued raised several times by the ILO.

The provision that restricts the eligibility to join the union to “public officials of grade six or below” is deleted to guarantee the fundamental labor right to join trade unions for fire officials and educational public officials, including teaching assistants (excluding teachers).

Amendment bill for Act on the Establishment and Operation, etc. of Teachers’ Unions (Enforcement: six months from the day of its promulgation)

 

 

 

Expanding the eligibility to join Teachers’ Unions

Previously, the Act on the Establishment and Operation, etc. of Teachers’ Unions allowed only incumbent teachers to join trade unions while prohibiting retired teachers from joining, for which the ILO had recommended* improvement.

* Union member qualification is a matter that should be determined by union bylawsIt urged to “recognize union member qualification of dismissed teachers” (on March 2014 and June 2017).

Accordingly, the amendment bill introduced a new provision that allows incumbent as well as retired teachers to join teachers’ unions as set by union bylaws.

This amendment resolves a dispute regarding member qualifications of teachers’ unions, another issue raised several times by the ILO, while guaranteeing retired teachers’ fundamental labor rights including the right to organize.

 

Amendment bill for Labor Standards Act (Enforcement: three months from the day of its promulgation)

<1> Creation of a flexible work hours system with unit periods between more than three months and less than six months

With the amendment of the Labor Standards Act, unit periods of flexible work hours system are expanded to a maximum of six months, and corresponding worker protection measures have been prescribed.

The amendment bill faithfully reflects the matters agreed between labor, management, and the government at the Economic, Social and Labor Council in February 2019 through in-depth discussions and compromises.

- The amendment expands unit periods* from previous three months to a maximum of six months and eases pre-determination requirements on work hours**, enhancing the flexibility of operation of working hours.

* Created a new system in which the unit period exceeds three months but is less than six months (while maintaining the current two-weeks-to-three-months system)

** Changed the existing way of calculating work hours from the number of work days to predetermining weekly work hours (in unavoidable cases, changing is possible afterwards via consultation with worker representatives, but daily work hours should be notified two weeks in advance)

- The amendment also prescribed eleven consecutive rest hours between work days and an obligation to report measures to supplement wages, devising a way to prevent damage to worker health as well as wage losses due to the expansion of unit periods.

The flexible work hours system was met with highest demand for improvement from the industry since the implementation of the 52-hour workweek system.

- As such, the legislation reflects the tripartite agreement and is expected to relieve difficulties in the industry while faithfully protecting working conditions of workers.

<2> Extended the calculation period of selective work hours system to three months for R&D work

For work involving R&D of new products or technologies, the calculation period of selective work hours system is extended from previous one month to a maximum of three months.

- It became mandatory to give eleven consecutive hours of rest between work days to protect workers’ right to health, and to pay additional wages when the average weekly work hours exceeds forty hours each month of the calculation period to prevent wage losses.

The selective work hours system allows workers to autonomously set their office hours as well as daily working hours.

- The system is compatible for R&D work that inevitably requires concentrated work for a certain period of time depending on the level of work engagement, which makes workers’ ability to autonomously select working time important in their performance.

<3> Obligation provision for worker health protection measures for special extended work

Special extended work presents concerns regarding damage to health as it can require workers to work hours that exceed the statutory extended working time.

- In particular, as the reasons for approval of such work have been expanded with the revision of the January 2020 Enforcement Rules of the Labor Standards Act, the need for health protection measures has been repeatedly raised.

The amended law clearly prescribes employer’s legal obligations regarding measures to protect worker health, which was previously implemented based on enforcement rules.

- It further strengthened the protection of worker rights to health in cases of inevitable special extended work.

Amendment bills for Employment Insurance Act and Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance(Enforcement: 2021.7.1.)

<1> The dependent self-employed to be subject to the statutory subscription to Employment Insurance Program

The amendment of the Employment Insurance Act and the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance opens the door for the dependent self-employed, who were not protected by employment insurance and therefore exposed to the risk of unemployment, to subscribe to the employment insurance program.

- The applicable types of occupation will be specified by a Presidential Decree, after taking into account various factors including the need for protection, manageability, social impact, etc.

<2> Payment of employment insurance premium by the dependent self-employed

Employment insurance premiums will be paid jointly by the dependent self-employed and their employers, and the employer shall withhold the equivalent of the insurance premium to be paid by a dependent self-employed person from his/her remuneration and pay the insurance premium.

<3> Unemployment benefit eligibility requirements and payment/period for the dependent self-employed

The dependent self-employed can receive unemployment benefits for 120 to 270 days depending on their insured period and age, provided that they have paid premiums for 12 months or more in the 24 months prior to their displacement and are involuntarily displaced.

- However, in consideration of the fact that the earnings of the dependent self-employed tends to be unstable and that their earnings can be reduced without any attributable reasons, their unemployment benefit eligibility shall be recognized for cases in which the dependent self-employed are change jobs as a result of their earnings continuously being reduced below a certain level.

- The recipient of unemployment benefits is put on a seven-day waiting period but the waiting period can be extended up to four weeks for displacements due to earnings reductions.

<4> Special case for labor platforms

When labor provision is made via platforms, the owners of such labor platforms shall bear an obligation to report on the insured status acquisition/loss of the dependent self-employed persons and the obligation to pay employment insurance premium by withholding the equivalent of the insurance premium to be paid by a dependent self-employed person from his/her remuneration.

<5> Payment of maternity benefits for the dependent self-employed

The dependent self-employed shall be provided with maternity benefits that is equivalent to those enjoyed by regular workers. The specifics of requirements for maternity benefits shall be prescribed by an enforcement decree.

Amendment bills for Industrial Accident Compensation Insurance Act and Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance

<1> Restriction on application to be excluded by the dependent self-employed (Enforcement: 2021.7.1)

Although 14 types of occupations classified as the dependent self-employed, including parcel delivery workers, can subscribe to industrial accident compensation insurance, nearly 80% of the dependent self-employed as of September 2020 have applied for application to be excluded, putting themselves in the blind spot of industrial accident compensation.

Since the dependent self-employed can request an application to be excluded for any reason, there are case of employers abusing this allowance by persuading or encouraging to apply for the application to be excluded.

The amendment will have the effect of a de facto abolition of the system that allows application to be excluded by requiring an approval from the Korea Workers’ Compensation and Welfare Services (KCOMWEL), and allow application to be excluded only for cases when it has been confirmed that the dependent self-employed persons are actually not working for one of the reasons stipulated by the law*, such as sickness or childcare.

* 1. Temporary closure for one or more months due to sickness/injury or pregnancy/child delivery/childcare of the dependent self-employed
2. Temporary closure for one month or longer due to reasons attributable to the employer
3. Other cases prescribed by Presidential Decree for reasons equivalent to subparagraphs 1 and 2

From July 1 2021, the dependent self-employed covered by industrial accident compensation insurance will be able to receive industrial accident compensation without exception when injured while working.

The dependent self-employed who could not receive industrial accident compensation because they had already filed an application to be excluded will also be able to enjoy industrial accident insurance benefits according to the amended law as long as there are no special circumstances.

* To maintain the excluded status after the effective date, individuals who were previously excluded should make another request for application to be excluded and obtain approval from KCOMWEL.

<2> Exemption from retroactive collection of industrial accident compensation insurance premium for the dependent self-employed (Enforcement: date of its promulgation)

Under the current Insurance Premium Collection Act, when an employer who is provided with service by the dependent self-employed does not file an industrial accident insurance related report*, but does so belatedly, insurance premiums for a maximum of three years are retroactively collected.

* A report on formation of insurance relationship according to the Insurance Premiums Collection Act, and a report on provision of labor according to the Industrial Accident Compensation Act

This has led to employers to continue to refrain from filing industrial accident insurance reports for the dependent self-employed.

To address this, a special voluntary reporting period will be implemented from the date of enforcement of the law to December 31, 2022, and employers filing reports within this period will be exempted from retroactive collection of premiums for the periods prior to the enforcement of the law (maximum of three years).

* (Exemption rate) When reporting voluntarily from the enforcement date to December 31, 2021 100% exemption; When reporting voluntarily from January 1, 2022 to December 31, 2022 50% exemption

<3> Reduction of industrial accident compensation insurance premiums for the dependent self-employed (Enforcement: 2021.7.1)

Since the dependent self-employed, unlike other workers, must pay half of insurance premiums, many tend to be reluctant to join the industrial accident compensation insurance program.

In addition, it is projected that the amended Industrial Accident Compensation Actwhich strictly restricts reasons for application to be excludedwill lead to increased insurance premium burden on business owners who are provided with labor from the dependent self-employed.

Accordingly, relieve such business owners and the dependent self-employed from the burden of insurance premiums, the grounds for helping to reduce the insurance premium for the dependent self-employed is established considering the accident rate, which will be prescribed by a Presidential Decree.

The specifics, such as types of occupations to benefit from the insurance premium reductions and reduction rates, will be prescribed by lower statutes, and the reduced insurance premiums will apply from July 1, 2021.

Amendment bills for other laws

In addition to the above-mentioned laws, amendment bills for the Labor Relations Commission Act, the Special Act on the Promotion of Youth Employment, and the Human Resources Development Service of Korea Act were passed by the National Assembly, and the main points of the amendments were as follows:

<1> Amendment bill for the Special Act on the Promotion of Youth Employment

The grounds have been established for commissioning work to public organizations, etc., which would allow commissioning of maintenance of computer network related to global HRD projects to specialist agencies.

<2> Amendment bill for the Human Resources Development Service of Korea Act

Added Global HRD and the National Competency Standards development projects to Human Resources Development Service of Korea’s project list, emphasizing its responsibilities.

<3> Amendment bill for the Labor Relations Commission Act

The content of the recently legislated Act on Support for Work in Parallel with Vocational Training in the Industrial Field, which allows student trainees to appeal to the Labor Relations Commission for correction of discriminatory treatment, have been reflected to the Labor Relations Commission Act.

- Added work related to remedying discriminatory treatment to the Labor Relations Commission’s list of duties and clarified the duties of the Discrimination Remedy Committee.

 

Last Modifide Date   :   Thu January 7, 2021
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