SOUTH KOREA: Massive dismissal of workers by company while the government cracked down on their strike

Dear friends,

The Asian Human Rights Commission (AHRC) is gravely concerned about the mass dismissal of over 900 irregular workers by a company in order to avoid giving them permanent contracts as required by new labour acts, namely the ‘Irregular Workers Protection Acts’ which came into force 1 July 2007. Although it is alleged that the company has committed certain unlawful acts in order to avoid the operation of this law, the government has severely cracked down the workers’ strike rather than to investigate the company’s unlawful actions.

CASE DETAILS:

According to the information we have received, due to a new labour law stating that irregular workers would automatically be granted regular status if they worked for a company for more than two years, a company called ‘New Core Outlet’ dismissed about 300 irregular workers before the law came into force and another company called ‘Homever’ dismissed at about 500 irregular workers after the law was enacted. Both are subsidiary companies of E-Land Group. Most dismissed workers were women, supermarket and department store cashiers and sales assistant workers of the company under the Group with very insecure employment conditions. After the mass dismissal, the E-Land Group substituted them with employees outsourced from temporary employment agencies.

Since 1 July 2007, the labour union at the E-land Group continued their sit-in protest at ‘New Core Outlet’ department store complex in central Seoul and ‘Homever’ in World Cup Stadium in Seoul until 20 July against the mass dismissal of irregular workers. The strike at the ‘Homever’ lasted for 21 days and the strike at the ‘New Core Outlet’ continued for 14 days.

On Friday July 20, more than 7,000 policemen broke down reconstructed barriers set up by the striking workers and moved in to forcibly remove the striking workers from the store. The police took 169 protestors from the two companies to several police stations and they were released. Some workers were injured in the 30 minutes during this process. Only 9 days after the demonstration was broken up, members of the union once again started a sit-in protest at ‘New Core Outlet’ in Seoul, on July 29. The government sent its riot police again to crack down on the protesters from ‘New Core outlet’.

Now, three core members of E-Land trade union, the president named KIM Kyung-Wook (37), the vice president Mr. LEE Nam-Sin and general secretary Mrs. LEE Kyung-Oak were arrested on charges of organising an illegal strike when riot police stormed picketing protestors. Moreover, other E-Land unionists are allegedly threatened to be arrested and huge individual compensation claims have been filed by the employer for business interference and losses incurred by the sit-in strikes.

According to the fact-finding report carried out by a various professors and lawyers regarding the workers’ rights 12 July 2007, it is reported that E-Land has falsified employment documents with individual workers so that their contracts would not have to be transformed into a regular basis. The report says that E-Land management has forced irregular employees to sign up under other people’s names after having worked for a year in the company’s stores. Also the workers were forced to sign for the contract without describing exact contract period, such as ‘blank contract’ (without filling out the period of contract) which is obviously illegal. Therefore, they are deprived of the chance to qualify for a regular contract after two years of employment, as provided by the new labour law.

Meanwhile, the government did not investigate those illegal acts by the company and has failed to settle the disputes and instead has ignited them by forcibly cracking down on the workers’ protest.

ADDITIONAL COMMENTS:

(Explanation of ‘new irregular workers protection law’)

The Republic of Korea already has one of the highest percentages of irregular workers in its labour force. According to the statistics of Working Voice, a center for irregular worker, there are 8.5 million irregular workers in South Korea, accounting for 55 percent of the nation’s entire workforce. Their monthly wages average is just 64 percent of what regular workers earn. Only 40 percent of them benefit from national health insurance and make contributions to the National Pension Fund. In this context, OECD and IMF have expressed a deep concern about the labour market conditions in South Korea and called for the government to act quickly to address the situation. To deal with the problem, the Korean government has introduced new legislation that came into force on 1 July 2007.

Lawmakers in November 2006 passed three bills aimed at protecting the rights of so-called ‘irregular workers’, which include temporary workers and those who do full-time work but don’t enjoy the benefits received by regular, full-time employment at large South Korean companies. The law, which went into effect on July 1, stipulates that companies must grant regular status to irregular employees after they have worked for the company for two years. In addition, if irregular labourers who work as much as regular employees experience discrimination in their salary or working conditions, they can report their cases to the Labour Relations Commission and then the employer who fails to comply with the order by the Commission have to pay 30 million won (approximately 33,500 US$)in a fine for default.

This law may be designed for goodwill, but there are great concerns that it contains several loopholes that may worsen the situation rather than protecting irregular workers.

As the first loophole to be found in this law, labour union pointed out that the law could be abused by employers, instead of protecting irregular workers, it would lead to mass dismissals as companies to avoid hiring them as regular workers. Before the July 1 implementation date, several companies fired irregular workers to avoid their wage-burdens and sought outsourced labour.

Secondly, there is no protection for irregular workers who report discrimination by their employers and no monitoring system to check whether discrimination has been made. Also, there is no legal arrangement and enforcement to redress any discrimination against irregular employees.

Lastly, it fails to restrict the scope of occupations that can use irregular workers. As the provision on the criteria of jobs for worker dispatching was re-worded, adding the new element “nature”, the new law would result in a great expansion in identifying what kinds of jobs are allowed for worker dispatching and what kinds are not.

Despite increasing concerns from various sectors including labour unions, the government was stick to legislate the law in the name of protection for irregular workers. Their worries transformed into reality just before the law went to effect. Even before the law went into effect July 1, conflict began to arise and the problem has become serious in small and medium businesses as they are trying to lay off irregular workers due to financial cause for higher wages and better working conditions.

A good case in point would be the E-Land group. The dispute between labour union and E-Land group is a good example of how the main purpose of the act is being disregarded and actually turned against irregular workers. It is predictable that other disputes like E-Land could occur if the new law is not revised and current disputes have not been solved.

The government should take responsibility for any unintended consequences that the legislation without considering any potential negative effects of the legislation.

In order to prevent recurrence of the issue, the government should identify the primary causes of the labour strike and play an active role in providing a safety net so that companies cannot easily avoid the law. Also the government must come up with complementary measures by imposing restrictions on outsourcing and simultaneous, massive lay-offs by companies. In the meantime, companies should put more effort in embracing irregular employees to create an atmosphere for win-win cooperation with them.

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