Aftermath Of The Election In South Korea

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After securing 192 seats in the national legislative election held on 10 April, the opposition coalition led by the Democratic Party will retain its majority...
South Korea Employment and HR
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After securing 192 seats in the national legislative election held on 10 April, the opposition coalition led by the Democratic Party will retain its majority in the 22nd National Assembly.

With the opposition victory, the Yoon Administration's labour reform goals now appear to have significantly faded. Moreover, various labour policies favoured by the opposition and demanded by labour unions are likely to see movement in the legislature.

Losing Momentum: President Yoon's Labour Reforms

For the past two years, the Yoon Administration has been pressing labour reforms focused on the rule of law. The President vetoed the opposition-led ‘Yellow Envelope Act' (discussed further below). The Ministry of Employment and Labour steadfastly pursued a law-and-order agenda on illegal labour activities, which reduced labour disruptions. And comprehensive audits of labour unions kept a check on illegal labour activities. 

However, the opposition-majority Assembly resisted comprehensive labour reforms requiring legislative enactments, and the administration failed to achieve many of its labour policy reform goals. For example, the administration came short in its attempts to change the 52-hour work-week restrictions. Its efforts to expand flexible working hours policies (e.g. calculating working hours on a cumulative as opposed to a weekly basis, expanding the application of various flexible working hours arrangements, and introducing a white-collar exemption or working hour savings system) similarly foundered. The President's planned reforms of the wage system also saw little movement.

Similar to the 21st National Assembly, where the opposition coalition held over 180 seats, the 22nd National Assembly will also feature an opposition coalition majority (192 out of 300 seats). The President and the opposition coalition maintain a stark difference in their approaches to labour reforms, and labour policy changes led by the Yoon Administration will, for most practical purposes, come to a stop. Further, while the Administration is anticipated to use the Economic and Social Development Commission (a commission composed of representatives from labour, management, and government) as a vehicle to continue its reforms, success is less likely given that all legislation will still be under scrutiny by the opposition coalition majority. 

Legislative Direction of the Opposition

The opposition coalition may also take legislative action to actively undo the President's labour policy efforts from the past two years, and the opposition coalition assemblymen will likely push progressive legislative agendas. These may include:

  • A renewed push for the previously-vetoed Yellow Envelope Act, which aims to expand the definition of an ‘employer' under the Labour Union Act and limit the liability of union members for collective actions.
  • Legislation prohibiting discriminatory labour terms based on the type of employment for the same value of labour (promoting so-called ‘equal-labour-equal-pay' principles and alleviating the dual-wage system that discriminates against non-regular employees) and protecting self-employed workers and ‘gig' platform workers. This legislation may see bipartisan action.
  • Legislation restricting and reducing working hours. This could include four-and-a-half or four working-day policies; a mandatory working-hour recordkeeping policy; prohibiting work-related instructions outside of working hours; expanding annual paid leave policies (e.g. increasing the amount of annual leave and/or introducing an annual leave carry-over policy); and banning a comprehensive wage system. 
  • Legislation protecting labour unions, such as laws aimed at reinvigorating multi-employer collective bargaining negotiations and expanding the effectiveness of collective bargaining agreements.
  • Legislation reforming occupational health and safety protections, such as the expansion of industrial accident prevention support to smaller workplaces with fewer than 50 workers.

That said, labour-related legislation proposed by the opposition coalition are unlikely to be realised immediately. With more than 180 seats in the National Assembly, the opposition party may fast-track legislative processes, but it still obtained fewer than 200 seats and will need cooperation from eight assemblymen on the other side of the aisle to override presidential vetoes. Consequently, in the early days of the 22nd National Assembly, the opposition coalition will likely seek cooperation with the President's party. Conversely, the President's own party is publicly blaming the electoral loss on the President's governance, and many are already referring to President Yoon as a ‘lame-duck' President. As a result, even if the President exercises the veto, legislative override with bipartisan support may be on the table.

Takeaway for employers

The consequences of the April General Election appear to be somewhat predictable for businesses in Korea. Since the wheels of corporate decisions often turn more slowly than policy changes, employers should consult their advisors and proactively plan responses to the forecasted changes in the labour environment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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