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Viewing cable 06SEOUL4194, KOREA PASSES NON-REGULAR WORKER BILLS

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Reference ID Created Released Classification Origin
06SEOUL4194 2006-12-07 08:44 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Seoul
VZCZCXYZ0002
RR RUEHWEB

DE RUEHUL #4194/01 3410844
ZNR UUUUU ZZH
R 070844Z DEC 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 1797
INFO RUEHBJ/AMEMBASSY BEIJING 1707
RUEHKO/AMEMBASSY TOKYO 1806
RHHMUNA/CDR USPACOM HONOLULU HI
RUALSFJ/COMUSJAPAN YOKOTA AB JA
RHMFIUU/COMUSKOREA J2 SEOUL KOR
RHMFISS/COMUSKOREA J5 SEOUL KOR
RHMFIUU/COMUSKOREA SCJS SEOUL KOR
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP//
UNCLAS SEOUL 004194 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV PREL KS
SUBJECT: KOREA PASSES NON-REGULAR WORKER BILLS 
 
 
SUMARRY AND COMMENT 
------------------- 
 
1.  (SBU) After two years of delays and debate, the ROK 
passed three labor bills to address wage and benefit 
discrimination against non-regular workers who comprise more 
than one-third of the workforce in Korea.  Although the bills 
layout a clear path for non-regular workers to become regular 
workers after completion of a two-year contract, the bills 
continue to receive opposition from the second largest trade 
union umbrella group as well as the Democratic Labor Party 
(DLP) who both feel the bills will only cause the number of 
non-regular workers to increase and allow employers to 
exploit wide loopholes that were never closed.  The passage 
of the bills in the current political climate marked a win 
for the Roh administration as the ruling Uri Party and 
opposition GNP Party came together in support of the final 
affirmative vote, leading some pundits to speculate that 
there is still some chance left for the Roh administration to 
pass key legislation.  END SUMMARY AND COMMENT. 
 
2.  (SBU) The National Assembly approved three labor bills on 
November 30 after discussions between labor, management and 
the government dragged on for the last two years.  The bills 
that go into effect starting in July 2007 ban companies from 
discriminating against non-regular (part-time or temporary) 
workers whose duties and productivity are comparable to 
regular workers in terms of wages.  Currently, non-regular 
workers' wages are typically half of their regular worker 
counterparts.  Non-regular workers are also rarely afforded 
benefits such as social insurance or pensions. 
 
BACKGROUND ON NON-REGULAR WORKERS 
--------------------------------- 
 
3.  (SBU) The broader issue being contested is the nature of 
non-regular work in Korea.  In their efforts to develop a 
dynamic and robust economy, Korean employers adopted the 
practice of using temporary workers to maintain a more 
flexible workforce.  Temporary workers are not only less 
costly than regular workers, but when work slows down, they 
can be dismissed with no fear of legal repercussions.  The 
result is that the current workforce in Korea is comprised of 
5.45 million non-regular workers, an enormous 35.5 percent of 
the total workforce.  According to Dr. Kim Soh Yeong from the 
Korea Labor Institute (KLI), it was only after the 
International Labor Organization (ILO) pressured the ROK to 
address the disparity between regular and non-regular workers 
that the new bills were proposed.  Kim also suggested that a 
fear of Korean enterprises moving to other Asian markets 
where labor costs are lower was also a factor for the ROKG in 
considering the labor reforms. 
 
POTENTIAL PITFALLS 
------------------ 
 
4.  (SBU) Contrary to the notion of stabilizing the workforce 
in Korea through these bills, many employers are fearful that 
their labor costs will rise as they will now be obligated to 
provide equal wages and equal benefits for all types of 
workers.  Additionally, employers must now convert 
non-regular workers to regular status upon completion of a 
two-year contract or face fines up to $30,000.  With the 
two-year mark looming over an employer's head, opponents to 
the bills fear that workers will be terminated just before 
the two-year point so that employers can avoid taking the 
worker on as a regular employee.  National Assembly 
Representative Bae Il-do, a member of the Environment and 
Labor Committee, voiced this same concern about employee 
terminations but added that it was better to pass these bills 
now than continue to allow the discrimination of non-regular 
workers.  Although workers had high expectations for support 
from the new law, the bills fall short on both wages and job 
security, Bae said.  NOTE:  Bae has the unique perspective of 
being a former labor union founder and president who has 
since left organized labor to join the National Assembly. 
END NOTE. 
 
UNION PERSPECTIVES 
------------------ 
 
5.  (SBU) The largest trade union umbrella organization, the 
Federation of Korean Trade Unions (FKTU) was openly 
supportive of the bills and helped the government rationalize 
the approval of less potent bills that could be delivered to 
the workers now rather than further delaying the debate.  The 
main opponents to the bills are the Democratic Labor Party 
(DLP) and the Korean Confederation of Trade Unions (KCTU), 
the second largest trade union umbrella organization.  These 
two groups share the concern that the bills have opened the 
door for employers to hire even more non-regular workers to 
replace employees on leave due to childbirth or illness. 
They unsuccessfully lobbied the government to add language 
that would have limited the sectors in which non-regular 
workers could be employed.  NOTE:  The day after the bills 
were passed, KCTU organized a large protest on the grounds of 
the National Assembly to show their displeasure with the 
laws.  Reports said that approximately 3,000 protestors 
attempted to enter 
the grounds of the National Assembly but were repelled by 
riot police using water cannons.  END NOTE. 
 
COMMENT 
------- 
 
6.  (SBU) The passage of the bills presents a new challenge 
for Korea's workforce.  Regular workers, backed by their 
unions, will not accept a decrease in wages as employers 
attempt to cut costs while equalizing wages between regular 
and non-regular workers.  Non-regular workers, buoyed by the 
passage of the new laws, must be careful not to demand too 
much in order to avoid putting their employers in a situation 
where the prospect of sharply rising staffing costs forces 
them to make reductions.  On a positive note, the consensus 
on the bills represented a rare meeting of the minds between 
the ruling Uri and opposition GNP parties although 
legislators have not disclosed their motives for the sudden 
willingness to cooperate.  With the current legislative 
session winding down and a number of important budget and 
policy issues still pending, politicians on both sides may be 
doing some "give and take" in order to realize some 
late-session progress on these fronts. 
VERSHBOW