Korea – Government to ease rules for layoffs

The government is considering easing rules for layoffs and overhauling pay systems to ease the plight of non-regular workers.

Since any changes are likely to come at the cost of regular workers’ rights, it will certainly entail a major union backlash.

“Without reform in the labor market, it isn’t easy to continue creating decent jobs. We need change if we wish to create decent jobs instead of non-regular jobs,” Finance Minister Choi Kyung-hwan said at a seminar.

Choi didn’t mention details but under current rules, layoffs are allowed only when there is an urgent managerial need, a clause which unionists say gives employers a great deal of discretion.

Non-regular workers’ average pay amounts to about 60 percent of what is paid to regular workers.

They are also excluded from other benefits.

According to Statistics Korea, one of out of three salaried workers is a non-regular worker including temporary workers or daily workers, with their ratio reaching 50 percent at some firms.

“Once businesses hire a regular worker, they should guarantee employment until the worker turns 60. The wage peak system isn’t working well, either,” Choi said.

He said businesses can’t sustain the labor system as wages continue to rise.

Chosen excerpts by Job Market Monitor. Read the whole story at Finance minister hints at easing layoff rules.