Agreement by Labor, Management & Government on Improving the Labor Market – Tripartite Commission agreement of Sunday, September 13, 2015

I. Vitalizing Youth Employment through Cooperation between Labor, Management & Government
1. Efforts to expand youth employment
2. Reinforcement of social support
3. Employment promotion consulting body for the youth

II. Correcting the Dual Structure of the Labor Market
1. Mutual growth by means of win-win cooperation between contractors and subcontractors, and between large companies and SMEs
2. Employing irregular employees and improving the discrimination correction system
2-1 Establishing healthy order in employment
- The Tripartite will prohibit unreasonable discrimination, hire regular employees for regular and continuous jobs as much as possible, refrain from using too many irregular employees just to save on labor, and work to reduce the number of irregular employees voluntarily in the mid to long term.

2-2 Leading role of the public sector
- The government will lead improvements to the employment structure by extending the current plans to convert the status of irregular employees currently engaged in regularly continuous work to regular employment (65,000 by 2015). The government will also vitalize its subsidy program to support private companies that hire irregular and regular employees.
- The government will strictly enforce guidelines to state-owned companies that are changing outsourcing companies engaged in cleaning, security, meal services, etc. for the sake of employee job security and working conditions, and review methods to promote long-term subcontracting.

2-3 Improving effectiveness of the discrimination correction system

-The government will strengthen auditing to correct discrimination and introducing a system of punitive penalties and compensation.

2-4 Strengthening protection of irregular employees
- Labor and management will implement measures for job security and improvement of working conditions for irregular employees, and work to enact relevant legislation as quickly as possible. The government will enforce labor auditing in order to prevent the use of “passion pay” (lower pay than minimum wage), unfair dismissal of employees during or upon expiry of their probationary period, etc.

2-5 Promoting job security for short-term employees
- The Tripartite will implement a joint fact-finding investigation, receiving opinions from specialists along with participation by relevant labor and management, and then prepare options for reflecting agreed items in regular National Assembly Session.
- Additional topics to be discussed: effective term and the number of contract renewals for short-term employees, the jobs for which dispatch is permitted, fields where irregular employment shall not be offered (such as those involving safety and the protection of life), the labor union’s power of attorney to apply for correction of discrimination, clarification of criteria to distinguish between dispatch and outsourcing, restrictions against dispatch being non-applicable to the top 10% of employment positions in terms of income, application of severance pay, etc.

3. Vitalizing the labor market
- Labor and management shall maintain job security by proactively coping with environmental changes, make personnel management efficient to minimize manpower reductions, and to make efficient operation possible of labor market internals such as wages and working hours.

3-1. Job security through establishment of reasonable HR management principles
- Labor and management shall create a culture of employing regular and direct employees as much as possible, and establishing reasonable HR management principles to provide security for existing employees and increase employment of new young people.

3-2 Clarification of standards and procedures for termination of employment contracts
- The Tripartite shall work on measures to improve all aspects of employment contracts through participation with labor, management, and relevant specialists to improve labor practices in personnel operations. Before the introduction of these improvements, the Tripartite shall establish an equitable evaluation system to minimize disputes and prevent abuse of the new system, and clarify the standards and procedures regarding establishment and termination of employment contracts according to law and judicial precedent. The government shall not unilaterally implement any measures but shall engage in sufficient consultation with labor and management.

3-3 Strengthening efforts for job security in times of managerial dismissal
- In cases where reduction of employment becomes necessary for managerial reasons, management shall make efforts to minimize such reductions through preventive measures such as wage and working hour adjustments, job transfers, business suspensions or leaves of absence, occupational training, etc. Labor shall work together with these efforts, and government shall improve its support by reorganizing the employment security project.

3-4 Clarifying procedures required for managerial dismissal
- Efforts to avoid dismissal shall be concretely stipulated in detail, with examples, in the Labor Standards Act, and a reemployment system shall be implemented in reality.

III. Strengthening the Social Security Net
IV. Resolution of Three Issues to Eliminate Uncertainty
1. Clarifying the ordinary wage system
1-1 Towards resolution of conflicts and disorder at many companies regarding issues related to ordinary wage, the Tripartite has decided to legislate the concept of ordinary wage and clarify standards regarding excluding allowances paid according to wage characteristics on the basis of the Supreme Court ruling of December 18, 2013.
(1) Definition
- The term “ordinary wage” means all kinds of money that the employer has determined to pay to the employee periodically and uniformly for his/her contractual work, regardless of how such payments are termed.
(2) Excluding allowances
- Ordinary wage will not include allowances to be paid differently according to individual employee’s particular situations or regardless of the work quantity or quality. Details will be defined in Enforcement Regulations.

* Exemplary allowances to be regulated in Enforcement Regulations
① Insurance premiums for employee health, security for the aged, and safety.
② Bonuses not yet fixed in terms of whether to pay or how much to pay according to employee achievement and other additional conditions.
③ Allowances to be paid later according to company business performance.

1-2 Labor and management will work together to simplify wage compositions and clarify payment conditions to prevent time-consuming disputes regarding payments included in ordinary wage, maintaining stability in employee income, and contributing to company productivity.

2. Revising laws and systems to reduce actual working hours
2-1 To decrease the practice of long working hours and advance the labor culture, the Tripartite will actively work together to reduce working hours to 1,800 hours per year on average for all industries by the end of 2020.

- The Tripartite will work together to legislate working hour issues as soon possible, improve the labor culture to assist married couples and reduce working hours, and extend the productivity-improvement movement throughout society.

2-2 Holiday work included in extended work
- Holiday working hours are included in extended working hours, as one week covers 7 days, and weekly working hours will be 52 hours (40 hours in weekly standard working hours + 12 hours in extended working hours).

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