[New Year Special] Will working hours go down this year?

Korean Mart Labor Union members protest against Shinsegae Group's plan to reduce its working hours, during a press conference in front of the conglomerate's head office in Seoul in this Dec. 12, 2017 file photo. / Courtesy of Korean Mart Labor Union

Controversy erupts over Shinsegae's 35-hour workweek

By Park Jae-hyuk

Koreans' long-awaited dreams of a work-life balance did not come true again last year despite the change of the government as both labor and management were not satisfied with proposals for reduced working hours for different reasons.

Asia's fourth-largest economy still seems to need more time to guarantee its people "life with an evening," the popular slogan published by People's Party senior adviser Sohn Hak-kyu, who stressed workers should be able to return home in time to enjoy dinner with their families.

While businesses have complained about the possible rise in their costs, workers have been concerned about wage cuts.

Shinsegae Group's implementation of a 35-hour workweek has also faced a backlash from union members who regard the retail giant's recent measure as a fraudulent act to save pay from its workers at its E-mart discount chains, following the increase in the minimum wage.

The nation's 10th-largest conglomerate was praised for its decision at first, because it was the first time a Korean conglomerate adopted a 35-hour workweek without a wage cut. Korea has a statutory working week of 40 hours.

Starting this year, its employees have begun working seven hours a day — from 9 a.m. to 5 p.m. with a one-hour lunch break. Workers at Shinsegae's department stores, duty free shops and discount chains are also subject to the new standard, so its E-mart discount stores close at 11 p.m., an hour earlier than before.

At the time of the announcement, the Seoul-based company emphasized the working hours reduction would not mean a salary cut, as it will continue with regular annual wage increases.

However, Korean Mart Labor Union has criticized Shinsegae for allegedly taking a deceitful measure as workers could end up working more than seven hours if there is no additional employment. The union consists of workers at the country's top discount chains of E-mart, Lotte Mart and Home plus.

"Workers at discount stores usually do not finish on time, so shorter working hours cannot reduce the workload if there is no additional employment," said Jeon Soo-chan, head of E-mart's union.

The union members have claimed those who benefit from shorter business hours of E-mart are management, not workers, as it can save on night shift bonuses.

"Lotte Mart's 8,000 workers have already worked seven hours a day, but they always have to do overtime, due to the lack of staff," said Lee Hyun-sook, head of Lotte Mart labor union. "E-mart workers' concerns have already come true at Lotte Mart."

Shinsegae has denied their claims, saying labor and management will continue to negotiate salaries every year. The company also said it will reduce unnecessary works.

Shinsegae Group Vice Chairman Chung Yong-jin gives a presentation on the vision of E-mart discount chain in this 2015 file photo. Shinsegae is the nation's first conglomerate that has adopted the 35-hour work week. / Korea Times file

SMEs fear shorter working hours

In addition to unions, most businesses do not welcome Shinsegae's implementation, as they cannot avoid rising costs caused by the minimum wage hike this year.

Small- and medium-sized enterprises (SMEs) have especially protested the reduction of working hours, citing labor shortages as a reason.

Korea Federation of SMEs (K-Biz) Chairman Park Sung-taek has urged the government to allow SMEs with less than 30 workers to extend their working time up to eight hours a day if labor and management agree with the overtime. SMEs Minister Hong Jong-hak accepted the business lobby's request.

Korea Employers Federation Vice Chairman Kim Young-bae also said the reduction of working hours will weigh on SMEs. He said large companies with over 1,000 employees should be subject to shorter working hours first, while smaller companies gradually cut down their working times.

According to the Korea Economic Research Institute, SMEs would bear relatively larger costs than conglomerates in sustaining output, if working hours go down. Also, such a measure deals a harsher blow to the manufacturing and transportation industries rather than retailers.

Moon takes firm stance

In spite of the resistance, the government is highly expected to continue to push ahead with steps for a work-life balance this year, considering that President Moon Jae-in has promised to cut the maximum workweek from 68 hours to 52 hours.

"If the National Assembly fails to pass the bill regarding the shorter working hours, the government should consider discarding the previous administrative interpretation on the maximum workweek," the President said in October last year.

Although Moon demanded the National Assembly pass the bill to amend the labor law, lawmakers could not agree with it last year.

In November last year, members of the National Assembly Environment and Labor Committee came up with a tentative agreement on amendment of the Employment Standards Act that trims the maximum workweek, while maintaining the rate of extra pay for holiday work.

Since then, Korea Chamber of Commerce and Industry Chairman Park Yong-maan has urged lawmakers to pass the bill regarding a gradual and flexible cutback of working hours, ahead of the minimum wage hike.

The business lobby, which first opposed the decrease of working hours, changed its mind after the Supreme Court announced it would adjudicate on a related lawsuit. If the court rules in favor of labor, businesses have to cut their working times without exception.

Park has said businesses cannot accept the increase in the rate of extra wages for holiday work, but labor-friendly lawmakers have urged the committee to raise the allowance.

The revised bill has not been passed yet, and will be discussed during a provisional session of parliament next month.
According to the Organization for Economic Cooperation and Development, the annual working time in Korea reaches to 2,113 hours, the second-longest among its members next to Mexico.