Ⅱ. Flexible Working Hour System

1. Purpose

“Flexible working hours” means shortening the working hours of other working days or other weeks while extending working hours on particular working days or particular weeks, so that the average working hours of a certain period shall be within the statutory standard working hours(40 hours per week). For an example, if you work 45 hours(9 hours x 5 days) in the first week and 35 hours(7 hours x 5 days) in the second week, they will equal 40 hours per week on average, meaning an overtime allowance will not have to be paid for the 5 extended working hours in the first week.
From the perspective of workers, it is easy to utilize leisure time by reducing working hours, decreasing the number of commuting days, and increasing holidays, while they face changes in biorhythm that cause greater fatigue while their real wage decrease due to reduced overtime allowance. From the perspective of employers, it is possible to reduce labor costs by increasing the efficiency of working hours and reducing the demand for overtime by arranging working hours to proactively respond to market conditions and management, avoiding a fixed statutory time system that is too strict.
The flexible working hour system is designed to increase efficiency in a workforce by adjusting the length of working time according to seasonal, monthly, or daily fluctuations in workload.
Under it, the employee works additional hours beyond the legal standard working hours for a specific period such as two weeks, one month, three months or six months on the condition that the average working hours for a certain period of a day or week shall not exceed the standard working hours. In this case, the employer is not violating the working hour rules of the LSA, nor is he/she obliged to pay an additional allowance for the extended hours. This system is designed to benefit the employer by allowing him/her to adjust working hours according to seasonal changes in production volume.

2. Introducing a Flexible Working Hour System

Article 51 (Flexible Working Hour System)
① An employer may have a worker work in accordance with the rules of employment (or in accordance with rules or regulations equivalent thereto) for a specific week in excess of working hours prescribed in Article 50 (1), or for a specific day in excess of working hours prescribed in Article 50 (2), on condition that average working hours per week in a certain unit period of not more than two weeks do not exceed the working hours under Article 50 (1), and provided that working hours in any particular week shall not exceed forty-eight hours.
② Where an employer reaches an agreement in writing with a workers’ representative on the following enumerated items, the employer is allowed to have a worker work for a specific week in excess of the working hours under Article 50 (1), or for a specific day in excess of the working hours under Article 50 (2), on the condition that average working hours per week in a certain unit period of not more than three months do not exceed the working hours under Article 50 (1). However, working hours for a specific week, and for a specific day shall not exceed fifty-two hours and twelve hours respectively:
1. scope of workers subject to this paragraph; 2. unit period (a unit period not exceeding three months); 3. working days in a unit period and working hours for each working day; and 4. other matters prescribed by Presidential Decree.
③ The provisions of paragraphs (1) and (2) shall not apply to workers aged between fifteen and eighteen, and pregnant female workers.
④ If an employer needs to have a worker work in accordance with the provisions of paragraphs (1) and (2), the employer shall prepare measures to ensure that the existing wage level is not lowered.

Article 51-2 (Flexible working hour system exceeding 3 months)
① Where an employer reaches an agreement in writing with a workers’ representative on the following enumerated items, the employer is allowed to have a worker work for a specific week in excess of the working hours under Article 50 (1), or for a specific day in excess of the working hours under Article 50 (2), on the condition that average working hours per week in a certain unit period exceeding 3 months and not exceeding 6 months, do not exceed the working hours under Article 50 (1). However, working hours for a specific week, and for a specific day shall not exceed fifty-two hours and twelve hours respectively:
1. Scope of target workers;
2. Unit period (shall be set as a fixed period exceeding 3 months and not exceeding 6 months);
3. Working hours per week in unit period; and
4. Other matters prescribed by Presidential Decree.
② In the case of working pursuant to Paragraph (1), the employer shall give the worker a continuous break of 11 hours or more before the start of the next working day after the end of the working day. However, if it is inevitable as prescribed by Presidential Decree, such as natural disasters, the written agreement with a workers’ representative shall be followed.
③ The employer shall notify the worker of the working hours for each working day of the week two weeks before the start of the working day of each week pursuant to Paragraph (1) ③.
④ When inevitable reasons such as unpredictable natural disasters, machine breakdowns, and sudden increase in workload occur at the time of written agreement with a workers’ representative pursuant to Paragraph (1), the employer shall work for one week on average within the unit period under Paragraph (1) ②. As long as the time is maintained, the matters referred to in paragraph (1) ③ may be changed after consultation with a workers’ representative. In this case, prior to the commencement of the changed working day, the employee shall be notified of the working hours for each working day.
⑤ In the case of engaging workers to this flexible working hours pursuant to paragraph (1), the employer shall adjust or establish wage items so that the existing wage level does not decrease, or prepare wage preservation measures such as payment of additional wages, and shall report to the Minister of Employment and Labor. However, this is not the case if a wage preservation plan has been prepared through written agreement with a workers’ representative.
⑥ The provisions of paragraphs (1) through (5) shall not apply to workers aged between fifteen and eighteen, and pregnant female workers.

Enforcement Decree Article 28 (Agreed-upon Matters regarding Flexible Work Hours System)
① “Other matters prescribed by Presidential Decree” in Article 51 (2) 4 of the Act mean the valid period of a written agreement.
② If necessary for deciding on whether or not to devise measures to ensure the existing wage level as prescribed in Article 51 (4) of the Act, the Minister of Employment and Labor may order the employer to present the contents of such measures, or may check them directly.

An employer may adopt “flexitime” on a 2-week basis by modifying the rules of employment and on a 3-month(6-month) basis by reaching agreement with the employee representative. In a flexitime scheme on a 2-week basis, the hours of work in a particular week may not exceed 48; in a flexitime scheme on a 3-month(6-month) basis, the hours of work in a particular week and on a particular day may not exceed, respectively, 52 and 12 hours, respectively(Article 51, 51-2 of the LSA).

(1) Introduction of flexible working hours up to two weeks
Flexible working time up to two weeks can be prepared through the establishment and revision of employment rules. In order to introduce this system through the employment rules, the opinion of the labor union representing the majority of workers or an employee representative representing the majority of workers shall be heard, and consent obtained if introduction of the system will disadvantage the workers.

(2) Introduction of flexible working hours up to 3 months and more than 3 months
This system requires a labor-management agreement. The employer shall receive a written agreement from the labor union which comprises a majority of the workers, or the employee representative representing the majority of workers. The contents of the written agreement shall include ① the scope of the affected workforce, ② the unit period, ③ the working day in the unit period, and the working hours for each working day, and ④ the validity period of the written agreement.
1) The scope of the covered workers does not necessarily have to include all workers, and can apply only to some workers engaged in certain business sectors, industries and occupations. However, it cannot apply to young workers(between 15 and 18 years old) and pregnant women workers.
2) Since the unit period is up to 6 months, it can be implemented in various unit periods such as 6 months, 3 months, 2 months, 1 month, or 3 weeks.
3) The working days and working hours for each working day shall be specified. Workers shall be notified of the work schedule before the start of the unit period by specifying the work day by work type and working hours by work day in the work schedule. However, in the flexible working hour system exceeding 3 months, the employer shall notify the employee of the working hours for each working day of the week by two weeks before starting the working day of each week. Working hours in a particular week may not exceed 52, and working hours on a particular day shall not exceed 12. If more than that, an overtime allowance shall be paid.
4) There is no special limitation on the validity of a written agreement. If an expiration date is set, an automatic renewal clause or an auto-expansion clause may be provided if the expiration date has passed.




3. Cases of Use

(1) At a brick factory
“We are using sand, special cement, and water to make differentiated bricks in the factory. In January each year, temperatures drop below 20 degrees below zero, and when the water completely freezes at 20 degrees below zero, which makes it almost impossible to produce bricks. So, workers come to work normally and perform chores such as cleaning rather than producing bricks. But in March, the situation is completely different. As construction starts in earnest, there is no choice but to work overtime due to the large volume of brick orders.” In this company, a flexible working hour system can solve the problem. Workers work 30 hours per week in January, 40 hours per week in February, and 50 hours per week in March. In this case, the average working hours per week are 40, and so the company is not obligated to pay overtime allowance in March, even though their weekly work exceeds 40 hours.

(2) Luxury brand stores
December is peak season, and so customers shop a lot and store workers work overtime. On the other hand, January is offseason and customers don’t go to luxury brand stores, leaving workers with not much to do. In these stores, the introduction of flexible working hours can reduce labor costs and increase work efficiency. In December, during the peak season, workers work 52 hours a week, but in January, the off-season, workers can work 28 hours a week.