Labor Clash Intensifies Over Workweek Exemption Bill

A Samsung Electronics researcher inspects a substrate on a glass wiring inspection machine in a microLED development line. (Photo provided by Samsung Electronics) As the ruling Democratic Party of Korea simultaneously proposed a mega-region special zone bill containing special labor provisions, such as a ‘52-hour workweek exception,’ alongside another bill excluding these provisions, the intense debate between labor and management over strengthening the competitiveness of high-tech industries versus protecting labor rights has once again violently surfaced. Although this represents an unusual legislative approach of pursuing National Assembly reviews and social dialogue in parallel without predetermining the adoption of the provisions, the stark difference in perspectives between the labor and business sectors portends considerable friction in the upcoming legislative process. According to the National Assembly and the Ministry of Employment and Labor on Oct. 20, Representative Park Sang-hyuk of the Democratic Party of Korea proposed the ‘Special Act on the Designation and Management of Mega-Region Strategic Industry Zones for Local-led Growth,’ which centers on special exemptions for working hours and fixed-term employment regulations. Representative Choi Gi-sang of the same party also proposed a bill with identical intent, but entirely excluded the labor exemption clauses that stand at the center of the controversy. The mega-region special zone bill, an extension of the existing ‘Special Act on Mega Zones,’ includes provisions to grant massive regulatory exemptions and support policies to companies investing in local areas to foster the 5-pole, 3-specialty growth engines. Representative Park’s bill brings 3 core labor regulation deregulation measures to the forefront under the pretext of securing competitiveness in high-tech industries. The most notable aspect is the special working hours exemption for high-income professionals, commonly referred to as the ‘white-collar exemption.’ This provision stipulates that high-income workers in the top 3% of earned income among managers, professionals, and related workers of companies within the special zones will not be subject to the restrictions on working hours, breaks, holidays, and overtime, night, or holiday work under the Labor Standards Act, provided an individual written agreement is reached. In addition, the bill allows the settlement period of the selective working hours system to be significantly expanded to up to 6 months upon written agreement with the workers’ representative, and opens the path to extending the employment period of fixed-term workers from the current 2 years to up to 4 years through individual written agreements. However, in the case of extending fixed-term employment, the bill mandates the payment of a so-called ‘fairness allowance’ to compensate for employment instability when a contract is terminated without a transition to an indefinite contract. While the ruling party’s strategy of placing both the bill containing the exemptions and the one omitting them on the table side by side is intended to draw a social consensus through sufficient deliberation and discussion, the reactions of stakeholders are deeply polarized. The two major umbrella labor unions have fiercely protested, demanding an immediate withdrawal. They point out that proposing a bill containing special labor exemptions even before a venue for full-scale discussion of the issues is established is tantamount to preempting the conclusion of the social dialogue. Experts are also expressing concerns that the bill has considerable blind spots, noting that individual written agreements are unlikely to fully guarantee the true intentions of workers in the field, and that the nature of income requirements being determined retrospectively could create discrepancies with the timing of application. Conversely, the business community has raised its voice in welcome. The 6 major economic organizations, including the Korea Enterprises Federation and the Korea Chamber of Commerce and Industry, emphasized through a joint statement that the working hours exemption and the extension of fixed-term employment periods, centered around research and development roles, are indispensable elements for surviving the global technological hegemony competition. In particular, they expressed deep regret over the simultaneous proposal of the bill excluding the special labor provisions, arguing that it could halve the effects of active corporate investment and job creation, thereby obscuring the original intent behind the legislation. While the labor sector strongly draws a line against the very premise of introducing the exemptions, the business sector counters that a special zone act without exemptions lacks effectiveness, leaving no signs of the perspective gap between labor and management narrowing. The government and the Ministry of Employment and Labor are repeatedly emphasizing their position that the proposal of the bill does not immediately confirm the full-scale introduction of the special labor provisions. Currently, a one-point social dialogue working-level consultative body involving labor, management, and relevant ministries is in operation, but there is also a significant gap between labor and management in their views on the speed of progress in the discussions. Experts advise that the social dialogue and the National Assembly’s legislative procedures must interlock in a mutually complementary manner. Ultimately, the fate of this mega-region special zone bill depends on whether a highly refined framework can be finalized to establish effective health right protection mechanisms and fair compensation systems to prevent the infringement of labor rights feared by the labor sector, all within the grand policy objectives of local-led growth and high-tech industry promotion.