The Ministry of Employment and Labour announced its 2014 priority plan for occupational safety and health issues. The plan will increase the responsibility of large companies for safety and health issues, more closely scrutinise 'high-risk' businesses and expand contractors' safety management duties, among other things.
While the legal community and businesses have been focused on pending legislation before the National Assembly concerning ordinary wages and the scope of overtime work, several new pieces of legislation may have escaped their notice. The new legislation covers sexual harassment prevention training, childcare leave, working hours for pregnant employees and minimum wage increases, among other things.
The Supreme Court recently issued two long-awaited full bench decisions on the scope of ordinary wages. In both cases the court held that fixed bonuses should be included in calculating ordinary wages regardless of their payment period. Since these decisions have generally broadened the scope of ordinary wages, employers' labour costs are also expected to increase going forward.
The National Assembly recently passed a bill to amend the Invention Promotion Act, which sets forth the basic framework for employee invention-related law in Korea. The amendment includes some significant changes to the automatic non-exclusive licences granted to employers and introduces additional procedural requirements for compensating in-service inventors.
The Supreme Court recently issued a ruling in relation to so-called 'ordinary wages' that has had a major impact on labour relations and employee payment schemes in Korea. In light of this decision and recent court trends, many companies are reassessing their employee payment schemes in Korea, redesigning their current salary schemes and revising working practices in an attempt to minimise future liabilities.
In order for a termination for business needs to be valid, an urgent business need must exist. The employer must also have made its best efforts to avoid terminating its employees, used reasonable and fair selection criteria to select the employees to be terminated and engaged in good-faith discussions with the employees' representative. The selection of employees for termination raises a number of issues.
Dismissal of poorly performing employees may expose employers to legal liabilities and expenses, as the Korean courts have shown a tendency to rule against dismissal based on poor performance. Therefore, before dismissing an employee on such grounds, an employer should carefully consider a number of factors in order to minimise the potential legal risks that may arise from the dismissal.
It is common practice in Korea for a company to bring in the employees of a subcontractor to work at the company's facilities along with its own regular employees. However, this practice can expose a company to legal risks, including labour disputes with the subcontractor's employees, an obligation to hire such employees directly and/or criminal liability.
'Ordinary wage' and 'average wage' are statutorily defined terms and used as the basis for calculating certain employee benefits. The Supreme Court recently held that regular bonuses paid commensurate with years of service on a quarterly basis should be included in the calculation of ordinary wages. In light of this decision, employers should seek advice on their existing bonus payment scheme.
As a follow-up to its comprehensive plan to improve the protection of non-regular employees, the government recently promulgated amendments to six labour laws. The amendments cover the acts on dispatched workers, fixed-term and part-time employees, employment welfare, labour standards, collection of insurance and minimum wages.
The new Personal Information Protection Act is not limited to information that is processed by computers or other electronic devices - it also covers personal information about employees and executives of private enterprises. As a result, employers will need to obtain consent from employees throughout the different stages of employment for the collection, use and provision of their personal information.
Korean society is increasingly aware and intolerant of sexual harassment in the workplace. The Equal Employment Act prohibits sexual harassment in the workplace. Companies operating in Korea should understand their duties both to protect and to educate their employees. They should also be aware of the consequences if they fail to do so.
In these challenging economic times, many companies facing financial difficulties may ultimately choose to end business operations permanently and begin the often confusing process of shutdown. Properly handling labour and employment issues related to a shutdown can be demanding. If a company is unaware of its obligations, challenges may arise that can complicate the shutdown process.
Under an amendment to the Labour Union and Labour Relations Adjustment Act, multiple unions will soon be able to coexist within the same company. Although granting unions the right to organise freely in the workplace is compatible with global standards, a multiple-union system may lead to significant problems, such as inter-union dispute, that disrupt operations.
The Act on Promotion of Employment and Occupational Rehabilitation of Disabled Persons sets out minimum requirements with regard to the employment of disabled persons by private employers. Under an amendment to the act, the method of calculating the requirement for each employer will be modified, resulting in a general increase in the minimum hiring level of disabled persons.
The Labour Standards Act has been amended to impose default interest on employers in the event of late payment of wages and severance to terminated employees. The exact default interest will be prescribed in a presidential decree pursuant to the amending legislation, subject to a cap of 40% a year.
Including: Regulatory Framework; Hiring and Basic Conditions of the Employment Relationship; Work Conditions, Wages and Benefits.
Recent amendments to the Labour Standards Act implement a five-day working week and alter minimum standards for paid leave. Other measures are intended to preserve current levels of pay and hourly wages, notwithstanding shorter work hours. The changes will apply from July 2004 to employers in the public and financial sectors, and to those employing at least 1,000 workers.