The Increase in Part-Time Employment:

Challenges for the Trade Union Movement


 

KIM Yoo Sun

1. Trends in the Labour Market

The pace of the changes in the labour market in Korea has accelerated since the eruption of the exchange crisis in the late 1997 and the subsequent erection of the regime of IMF conditionality and structural adjustment.

Unemployment rate soared to 8.4% in the first quarter of 1999. While it has dropped slightly by the middle of the year, some new features, such as long term unemployment and youth unemployment, are beginning to set in as permanent fixture.

The ranks of temporary or day-hire workers make up 52.1% of the total wage-earning employees. Part-time workers who work less than 36 hours per week have a 9.5% share of the total employment.

The various changes in the labour market point to an expansion of the ranks of workers who are engaged in 'atypical', 'non-standard', or 'irregular' employment.

The changes in the labour market has also accompanied a dramatic change in the income of workers. The labour share of the national income has declined from 64.2% in 1996 to 59.0% in 1998.

Unionionisation rate or union density has dropped to 11.5% in December 1998 December; while only 5.6% of women workers -- mostly found in small or micro enterprises in atypical types of employment -- are organized into unions.

The rapid increase in unemployment and the expansion of atypical types of employment have alerted the trade union and labour movement in Korea to the paramount challenge of unemployment and the urgency of need to build institutions and mechanisms to protect and unionize the 'irregular workers'.

2. The State of Part-time Employment

The Increase in Part-time Employment

According to the findings of the National Statistical Office report, Economically Active Population Survey, the number of part-time workers, who work less than 36 hours per week, rose by 40 per cent in the space of one year, from 505,000 (3.8% of total waged employees) in 1997 to 721,000 (5.9%) in 1998. In terms of gender, the figures for male workers rose from 118,000 (1.5% of the total waged employees) to 256,000 (3.4%), while the figure for female workers rose from 387,000 (7.5%) to 465,000 (9.9%). (The share of women workers in the part-time employment dropped from 76.6% in 1997 to 64.5% in 1998.)

By status, the permanent part-time workers increased slightly from 27,000 to 38,000. Those people working part-time in temporary employment rose from 213,000 to 284,000. The workers who have to renew their job contract daily -- the day-hire employment -- rose from 264,000 to 399,000. These figures show that those workers who work part-time in regular employment (on permanent basis) make up just over 5% of all part-time workers.

According to the NSO Report on the Employment Structure Survey 1997, people who regarded him- or herself as part-time worker numbered 1,039,000 (9.1% of the total waged employees) in September 1997. In view of the recent trends, part-time employees in September 1999 can be assumed to be at least 1.5 million.

The noticeable difference between the findings of the two surveys reflects the existence of the so-called 'quasi-part-time workers'. Many workers are employed "as" part-time workers, but are, in fact, "made" to work just like any other 'regular' (or full-time) workers. The employment "status" of "part-time" worker becomes the grounds for differentiated treatment in employee rights and welfare by the management. This has become a prevalent trend especially in the adverse economic conditions which have put workers in severe disadvantage in their relationship with the employers.

A survey of part-time workers by the KCTU-affiliated Korean Federation of Commercial Workers Unions found that the average weekly working hours of "part-time" employees of department stores was 46.1 hours -- no different from "regular" employees. 59% of them worked more than 8 hours per day and 6 or 7 days per week. Those who worked less than 35 hours per week were limited to 27%, while those who worked more than the statutory weekly work-hour of 44 hours amounted to 61%. In fact, around 25% of the employees worked over 56 hours (exceeding the legal maximum over-time work).

The Causes for the New Trend

The primary cause for the rapid growth in the part-time employment lies in the mutually enforcement of labour market flexibility by the government and employers. Employers have sought to suppress the increase in regular employment and resorted to expansion of part-time employment in their pursuit for labour cost savings, flexible employment adjustment, and elastic response to shifts in the business demand.

One cannot, however, overlook the supply side cause. According to the NSO Economically Active Population Survey, among the part-time workers who work less than 36 hours a week, those who took the job because of the lack of choice in the absence of job opportunities -- the "involuntary part-time workers" -- rose from 120,000 (23.8%) in 1997 to 377,000 (52.3%) in 1998. The increase in "involuntary part-time employment" in the one year period (of economic crisis) was caused by scarcity of jobs. This is reflected in the figures for "voluntary part-time workers": this category was reduced to 344,000 (47.7% of the part-time workers) in 1998 from 384,000 (76.2%) in 1997.

The Part-time Employment Abused

As noted above, the part-time workers who are employed on temporary basis -- for period less than 1 year -- or hired on daily basis make up 95% of the ranks of part-time workers. One would, then, expect that the "period of service" for most of the part-time workers would be less than 1 year. The NSO Report on the Employment Structure Survey 1997, however, reveal that around 70% the part-time workers have worked in their current jobs for more than 1 year. This indicates that 'temporary' part-time employment is only a nominal phenomenon. The reality is that employers hire workers for "temporary" "part-time" jobs over an indefinite period and making them work just like "regular" employees -- giving rise to an abusive employment practice.

The Discriminatory Wages

The Labour Standards Act, in Article 25 paragraph 1, stipulates that "Working conditions for part-time workers shall be determined on the basis of relative ratio computed in comparison of their working hours with those of full-time workers engaged in the same kind of job at the pertinent work place".

But, according to the Ministry of Labour's Part-time Employment Situation Survey, only 14.1% of the companies paid the part-time employees the same hourly wage as comparable full-time employees within the same company are only 14.1%. 62.4% of the companies surveyed determined the hourly wage rate of the part-time workers on the basis of the "going" hourly wage level for part-time workers in the same industry.

According to the Korean Labour Institute's "Study on the Diversification of Employment Patterns", the companies which answered affirmatively to the question, "hourly wage of part-time workers who possess similar level of qualification and experience (as comparable regular employees in the company) is higher than comparable regular employees" were limited to 9.0%, while 22.3% paid at the "same" rate/level. 68.7% of the companies surveyed paid the part-time workers at a "lower" rate/level. According to the study by the Ministry of Labour, noted above, part-time workers in 63% of the companies benefited from the company's regular wage increases (applied to all employees). Only around 25% of the companies made 'bonuses' and 'allowances' given to "regular" employees available to part-time employees. According to a study done by the KCTU-affiliated Korean Federation of Hospital Workers Unions, only 9.2% and 9.9% of part-time workers in hospitals had the benefit of over-time penalty rate and 'end of service' allowance, respectively.

Non-existent Welfare Benefits for Part-Time Workers

The Ministry of Labour survey found that companies which provided annual leave to "part-time" workers were limited to 35%, monthly leave 49%, maternity leave 33%, nursing leave 29%, menstruation leave 42%. These leaves are statutory leaves stipulated by the Labour Standard Act. The relatively high provision of monthly leave is explained by the fact that it includes the 12% of companies which provided remunerative substitute for monthly leave. The monthly leave, therefore, was provide in substance only in 37% of the companies surveyed.

A study by the Korean Confederation of Trade Unions found that annual leave was provided to 9% of part-time workers, monthly leave to 17%, maternity leave to 4%, menstruation leave to 17%. The KFHU survey found that annual leave was made available to 6% of part-time workers, monthly leave to 14%, menstruation leave 9%, while no part-time worker was provided with maternity leave (0%). More surprisingly, 92% of the part-time workers employed by hospitals were not aware of the fact that the provisions, stipulation, and regulations of the Labour Standards Act applied to part-time workers.

The Ministry of Labour survey found that only 58% of companies subscribed to Industrial Accident Compensation Insurance on behalf of their part-time employees. Availability of other social insurances to part-time workers were even lower: only 30% of companies took out Employment Insurance, 24% Health Insurance, and only 17% of companies contributed to the National Pension Programme for their part-time employees. The KCTU survey found different but similar trend: 22% of part-time workers benefitted from industrial accidents compensation insurance, 4% employment insurance, 22% health insurance, and 9% the pension programme. Among the part-time workers in the hospital sector, 21% had employment insurance subscription, while only 1 to 2% had access to 3 other social insurances.

Trade Union Attitudes Towards Part-Time Workers

According to the survey conducted by the Korean Labour Institute, the 32% and 36% of companies answered that they were bound to seek a prior agreement with trade unions before undertaking redundancy dismissal or introducing flexible working hour system, respectively. (These have direct effect on the "regular" employees.) But on issues of hiring temp-agency workers, part-time workers, temporary workers or fixed term contract workers, only 5 to 12% of companies were committed to seek a prior agreement with the trade unions. Only 5% of companies were obligated to seek prior agreement with trade unions in part-time workers, while 85% of companies were free to decide unilaterally to hire part-time workers without even an obligation to notify the unions.

The Ministry of Labour study found that 18.2% of trade unions surveyed opened the membership to part-time workers in their constitution. However, the companies in which the trade unions had part-time workers as their members were limited to 1.1%. Only 0.4% of par-time workers were trade union members while 12.9% of the part-time workers expressed the "willingness to become a union member in the future".

According to the same study, 44% of the trade unions surveyed did not answer the question asking "the trade union measures for part-time workers". 21% answered that they would or should demand the company management to consult with the union when part-time workers are hired, 11% called for the change of status to regular employees, 10% focused on improvement of working conditions for the part-time workers, 8% opposed the hiring of part-time workers, and 4% opted to promote part-time workers to join the unions.

The survey findings reveal that the trade unions are either disinterested or lack concern for part-time workers and address the issue of part-time workers from the view point of regular employees. At the same time, the trade unions appear to hesitate or remain inactive in encouraging part-time workers to join them.

Another survey by the Korean Federation of Commercial Workers Unions, however, found a different pattern of attitude among the "regular employees": 39% felt a need to "incorporate demands for working conditions of part-time workers in the unions demand for collective agreement even if there is difficulty in recruiting the part-time workers into the union". 25% called on to "change the status of part-time worker to regular employee and then to prohibit the further employment of irregular workers". 20% stated that "part-time workers should be encouraged to become union members as they are the same workers". However, 16% felt that "part-time workers is a non-issue for unions as they reflect the work force policy of the management". As a whole, the survey found that 84% of the workers looked to the trade unions to develop and undertake pro-active efforts towards the part-time workers.

The various surveys concurred in finding that the part-time workers themselves felt that low wage level -- rather than employment insecurity or changing to regular employee status -- was the most important concern that needs to be improved urgently.

3. Policy Tasks for the Protection and Organization

of Part-Time Workers

A. The Agendas for the Amendment of the Labour Standards Act

1) Restriction on the grounds for hiring fixed-term contract employment: "Fixed-term employment contract which lacks reasonable ground is to be deemed to be null and void and is deemed to be open-ended employment contract"

To prevent abuse arising from the use of successive renewal of fixed-term employment contract, new provisions, such as described here, should be incorporated into the Labour Standard Act: ⑴ "conclusion and/or renewal of fixed-term employment contract shall be grounded on justifiable objective reasons"; ⑵ provisions regulating the maximum total duration of successive fixed-term employment relationship; ⑶ the maximum number of renewals of fixed-term employment contracts; ⑷ provision stipulating that fixed-term contract without reasonable grounds is null and void and that it is to be construed as open-ended permanent (regular) employment contract.

2) New provisions preventing excessive over-time work by part-time workers needs to be introduced: ⑴ real/total working hours (normal + overtime) of part-time worker shall not exceed normal working hours of full-time worker; ⑵ the total overtime worked by a part-time worker shall not exceed one-third of the normal working hours; ⑶ if the average hours worked over a 12 week period exceeds the contracted hours of work by 2 hours, then the average hours of shall become the new contracted hours of work unless the employee in question does not object; 4) over-time penalty shall apply if a part-time worker works more than the contracted hours of work, even if the total hours worked is within the statutory standard hours of work.

B. Major Challenges for the Trade Unions

National Centres

The organizational and campaign capacity of large unions based on the membership of "regular" employees needs to be developed as the foundation or the strength to pursue the demands and interests of all workers -- workers in the small enterprises and all types of "irregular" employees.

The national centres of trade unions need to adopt the creation of legislative protection for irregular employees, amendment of the Labour Standards Act, and the consolidation of the social insurance system as the main focus of trade union movement campaign directed at social reform and changes in the government policies. The trade union movement as a whole need to exert the its full strength to introduce and consolidate minimum wage system as an effective mechanism.

The national centres should encourage and empower member unions to consolidate and expand the collective bargaining agreement provisions on the issue of "irregular" employment; extend the coverage of the collective bargaining agreements to "irregular" workers; introduce provisions to protect "irregular" workers; to remove restrictions in the union constitution or collective agreement which prohibit "irregular" employees joining the union; extension of the "union shop" agreement to cover "irregular" workers. These issues need to be raised in the renewal of collective bargaining agreements and wage negotiations.

The national centres should also undertake a broad union wide and society wide campaign to raise the issues of "irregular" workers. A special booklet outlining the rights and welfare provisions of the labour laws designed to meet the needs and concerns of "irregular" workers should be produced for general distribution. A check-off list of the Labour Standard Act provisions should be made available widely to be used at all levels of the trade union movement to collect and report on the cases of violations. This could be used to mount an effective (and collective) legal action and to develop the issues as society-wide agenda.

The national centres need also to focus on the challenge of organizing the "new" types of workers. Organizing Schools, organizing manuals addressing the specific needs of the new sectors of the labour market should be developed.

Industrial Unions/Industrial Federations

It is paramount for the industrial unions or industry/sectoral federations of trade unions to create and establish a specialized body within their structure to organize "irregular" workers. Furthermore, specially designed programme of activities that can be of direct benefit to "irregular" workers needs to be developed. Basic legal service and education activities can be the starting point. It can extend to job placement and job training activities. Special vehicle organization, such as district unions or branches to organize "irregular" workers. Furthermore, existing enterprise unions needs to amend their constitutions to open the doors or membership to "irregular" workers.

The industry or sector level and regional structures of trade unions need also to start up organizing campaign based on specially trained organizers.

Enterprise-level Unions

Enterprise-level unions needs to take up the agenda of "consolidation of protection for 'irregular' workers. This can take the form of 'increase in the minimum wage' and collective bargaining agreement provisions focusing on the needs and demands of "irregular" workers.

The active collective agreement campaign is the necessary pre-requisite foundation to open the union membership to "irregular" workers and to undertake effective recruitment campaign.