Non-Permanent Workers Pose Major Challenge for Incoming Government

President-elect Lee Myung-bak shakes hands with a member of Federation of Korean Trade Unions at union's headquarters in Yeouido on Jan.23. The two sides agreed to install a hotline between the union and the President's office but have not made a clear resolution on the non-permanent worker issue.

/ Korea Times

By Bae Ji-sook
Staff Reporter

The whole nation is abuzz over the changes President-to-be Lee Myung-bak would bring to the society. Some dream of deregulation and autonomy while others frown over their downsized organizations or the side effects the unlimited competition would bring.

The labor circle is one the groups most fearing the changes in February. Some said it would be a new ``deprived five years,'' against the business-friendly President-elect.
Umbrella unions have vowed to act sternly against the CEO-turned-President-to-be and workers fear that severe competition will once again take away their workplaces and savings.

The hottest issue is the temporary worker protection law, which has been in effect since July 2007. Some people say the incoming administration will not acknowledge the law, while others say that if the law is enforced businessmen who face overall deregulation may be shackled by it.

Right after Lee Myung-bak refused a Monday meeting with the nation's largest umbrella labor union leader, Lee Suk-haeng of the Korean Confederation of Trade Unions, it seemed as if the two sides will never manage to compromise.

What will become of the 5.7 million temporary workers in the nation under the incoming government?

Temporary Worker Protection Law?

The law requires all employers to transform their contracts with temporary workers into permanent contracts once individuals have worked for the company for more than two years. Workplaces with more than 300 employees were subject to the change.

The law was imposed to help temporary workers suffering from discrimination in the workplace live better lives. The plight of temporary workers (the number of which dramatically increased after the Asian currency crisis) has become a widely spoken of problem, with complaints about job insecurity, lower income and poor benefits. Many people claimed their insurance coverage was poor and they were always anxious that they may be ``recommended to quit their jobs'' out of the blue.

In 2007, the Ministry of Labor conducted a survey on 42,161 workplaces and found temporary workers were paid 34 percent less than permanent workers. Their average monthly income was 1.2 million won, the minimum cost of living for a four-member family, according to the government.

Resistance

Despite the government and other workers' desire to pass the bill, the law soon faced huge resistance among businessmen. Since permanent workers require more maintenance costs, such as health, employment, industrial disaster insurance and national pension among others, business leaders opposed the law, saying the Korean market is not mature enough to pay all such costs.

Some labor experts and workers worried that management may try to sack workers ahead of filling up the two years to avoid having to renew contracts permanently.

Their worries soon became a reality.

Unionized workers of one of the nation's largest retailers, E-Land, went on strike July 8. They claimed that management started to sack temporary workers, especially the cashiers at their New Core and Homever supermarkets_ and requested they reapply as outsourced workers to avoid direct employment as temporary workers, which would mean they would be forced to be employ them as permanent workers.

When the workers refused the order and decided to strike, the company closed the specific supermarkets down. Soon after they reopened but staff were replaced with new employees outsourced from other companies.

It has been more than 200 days since the initial strike. There were several rumors that an agreement would be made, but the workers are still continuing their struggle.

E-land was the first to suffer, but not the only one. Soon after, news of several other companies laying off their non-permanent staff was reported.

Seventy non-permanent workers of Koscom, a stock information providing unit of the Korea Exchange, have been demanding secure jobs for more than 100 days. On Dec. 31, they climbed to the top of some high-rise CCTV towers in downtown Seoul to protest their current status and ask the company to make their contracts permanent.

Several days before, they had their heads shaved to express their anger. Seventy people have been staying in a tent in front of the Korea Exchange building in Yeouido for the past 137 days.

Several more companies are struggling. Nonetheless, neither the government nor anyone else has a clear solution to the endless struggles.

Policy in the Making

There is not yet a clear direction for policies regarding temporary workers. Because it is such a delicate and sensitive issue, neither the transition committee nor the President-elect has yet to make any significant comment on it.

Lee Myung-bak is both loved and hated by the public for his widely known ``business-friendly'' image. During his election campaign, he often talked about his future plan _ to act sternly against any illegal collective action. He also said he ``understands the delicacy of labor issues, but temporary worker issues are inevitable.''

At a lecture at Mokwon University, he told students that ``youths chasing after job security and studying in libraries to become civic servants isn't good, since temporary worker status isn't necessarily bad.''

Also, Lee had several luncheons with business leaders and vowed to lift regulations as much as he could to bring up market competitiveness and revive the economy.

Since one of the most lamented burdens on businessmen was the temporary worker issue, it is highly predictable that at some point of his presidency, the law may face some amendments.

Some experts warned that the businesses would refuse to hire staff directly and prefer to outsource to avoid all legal responsibility.

The Ministry of Labor reportedly suggested the presidential transition committee extend the grace period for contract renewal time for temporary workers from two years to three years.

``It shows that the incumbent administration admitted to the failure of their policy,'' a spokesman of the Federation of Korea Trade Unions complained.

Companies could outsource domestically or internationally. It is already an international trend. Samsung Economic Research Institute in 1999 already recommended companies to outsource everything except for key functions.

``More and more companies will prefer outsourcing and they will try to think of all ways to avoid making any legal contracts with the workers in case of any trouble,'' Eun Soo-mi, researcher at the Korea Labor Institute, said.

Moreover, there are concerns that those who luckily made the transition may become the first targets for restructuring. Lee's transition committee has recently asked for a 10 percent cut in every governmental department budget. Experts said the ministries, where most money is actually used for people directly, will have to cut off the personnel costs first_ and the main target will be those who just became permanent workers.

The labor ministry announced that over 67,000 temporary workers at governmental agencies or public corporations had signed a new contract to make them permanent workers. However, if management will have to lay off people or have to transit permanent workers to non-permanent ones, it is easy to think of them again.

On the other hand, those who did not manage to make it to a permanent basis will suffer as massive lay offs are around the corner. The government recently confirmed that even public officials on temporary contracts will not get their contracts renewed this year, hinting at sacking more than 800 mid-high-ranking government employees.

The temporary worker issue is a uniquely Korean phenomenon. The workers work as much as permanent workers or in some cases even more, but are treated badly.
Workers hinted at massive rallies and other drastic actions should the incoming government come up with anti-laborer policies. Lee Suk-haeng vowed to act sternly to challenge the incoming government's pro-business stance on Jan. 10.

Lee has met the business-friendly Federation of Korean Trade Unions and agreed to set a hotline between the two. Neither has yet come up with good measures to solve the temporary worker problem.

It will be ``the'' lingering and on-going problem for 2008.

bjs@koreatimes.co.kr