Working Hour Reduction:
Trade Union Challenge and Imperatives

Korean Confederation of Trade Unions

The crisis, precipitated by the financial and currency melt down and aggravated by the ill-advised IMF prescription, is now into the second year. Every sector and part of the society is wilting under the pressure. But, the greatest suffering was reserved for the workers who have lost their jobs without any source of income. Workers who are lucky enough to hold on to jobs are, also, gripped by insecurity because tomorrow it may them who are forced out of jobs in this layoff frenzy.

Workers′ jobs are the very source of their livelihood. Their work earns them the wage needed to support their lives and at the same time provide society the energy needed for development. (And their wage gives them purchasing power which stimulate production.) Loss of employment means the loss of the source of income and a fall to non-personhood. People who have lost the right to work lose the biggest part of their identity as a human being and a social being. The thousands of homeless thronging the subway stations is the very picture of dehumanisation. (Loss of income leads to fall in consumption causing a contraction of production activities.)

Unemployment is expected to worsen this year. There will be more people driven out of their jobs and new workers who cannot find jobs. At the same time, many workers who have jobs - and those who succeed in getting jobs - will be forced into a precariousness and atypical employment situation that provides little or no security.

The companies, unconcerned about and insensitive to the unraveling of the social fabric, are intent on “dismissals on economic reasons” as the central - and in most cases, the sole - component of “restructuring” and “employment adjustment”. The workplaces throughout the country are turned into ruins with waves of mass dismissals, unilateral wage cuts, worsening of working conditions, and malicious attacks on collective bargaining process.

What can we say about the government´s policies concerning the current situation?

The government budget allocation to promote employment or provide relief for unemployed people, and initiate “active labour market” policy is miniscule compared to the scale of the problem. The government as yet cannot begin to design and establish a meaningful vocational training system or the infrastructure needed for employment security.

The heart of the government´s problem is that its economic programme is on the whole “employment destroying” or “unemployment inducing”. The government turns a blind eye to the indiscriminate mass layoffs undertaken by companies. The government believes that layoffs are inevitable and necessary pre-requisite for “recovery”. In fact, it leads the drive with its attacks on the public sector and with its public opinion whip-up. Attempting to produce counter-measures after setting of the mass exodus from jobs is not only unworkable, but totally irresponsible.

Any “unemployment policy” must be based on a coordinated attempt to maximize job or employment retention. There is a need to turn around the government policy - from “unemployment inducing” programme to that of “employment retention”.

Without such a fundamental change in direction, it will not be possible to stem the tide of unemployment and begin to address the social problems associated with unemployment. This is the only way to begin to defend the lives, income, and work for people impacted by the crisis.

The Korean Confederation of Trade Unions believes the effort to reduce working hours lies at the heart of the “employment retention” oriented economic programme. A general reduction of working hours can contribute to the retention of jobs and lead to creation of new jobs. Furthermore, it is the natural solution for employment security in the current production slow-down brought about by the economic recession or depression. It is also a necessary step towards lowering the world record level working hours which has pulverised the lives and health of workers.

Working hour reduction is the corner stone of any effort to meet the challenge of massive unemployment and decapacitating job insecurity. Furthermore, it is the key instrument for enhancing workers´ quality of life which has so long been neglected.

We cannot ignore the opposition to work sharing through working hour reduction. The criticism - coming from some researchers and partisan employers  - points to “questionable” employment effect and increase in labour cost. However, the significance of work sharing in the Korean context is not exactly same as that in Europe. The main concern in Korea, currently, is how to prevent mass unemployment arising from the economic crisis, the austerity-enforcing IMF prescriptions, and the neo-liberal and “market-oriented” restructuring programme espoused by the government and companies. In this context, the primary emphasis of working hour reduction is on the employment retention effect? than the “employment creation effect”.

Work sharing based on working hour reduction makes social sense in view of various economic, social, and political costs that stem from mass unemployment. The employers´ arguments about the “employment effect” and increase in labour cost of working hour reduction are, we believe, willful neglect of social reality and responsibility - and simply a callous refusal to think responsibly.

In the long run, working hour reduction is essential to meet the society-wide challenge to enhance the quality of life of working people.

The Korean economy, for last few decades, has been a story of blind pursuit of an economy of scale based on mass production through massive mobilisation of labour force and prolonged working hours. This has lifted and kept Korea on the top of the list for longest working hours in the world.

Long working hours has been responsible for high industrial accident rate and extremely high physical and mental stress levels - contributing to family breakdown. Furthermore, long working hours has deprived workers of opportunities for self-improvement through education and training, and opportunities for social and political participation. It has been one of the key factors in the impoverishment of the family and social life of the working people.

The growth strategy based on absolute increase in labour input, however, has reached its limit. Korea faces the challenge of creating a high-value added economy based on high quality labour. This will be impossible without a reduction of working hours. Apart from the economic and developmental challenge, the enhancement of the quality of life for working people is a paramount social and national challenge. This is also predicated on the reduction of working hours.

Work hour reduction is, therefore, more than a simple unemployment countermeasure. Rather, it can become the central motivating force for a fundamental change in the society and national outlook.

The current study was undertaken for a period of seven months from June to December 1998. The study examined existing studies, cases, and experiences of work hour reduction in other countries. It also involved a quantitative survey of working hours in Korea, a research-survey of current working hour practices, and cases of efforts to reduce working hours. The study focused on identifying the special policy needs and practical tasks for the trade union movement to reduce working hours. It also attempted to construct detailed guidelines for a trade union initiative. The findings of the study were presented to a seminar and a workshop, in November 1998 and December 1998, for final fine tuning and preliminary policy examination.

This book is the report of the findings, conclusions, and recommendations of the study. This book is composed of four parts. The first part examines the significance of work sharing and work hour reduction, the second, the cases and experiences of work sharing and work hour reduction in a number of advanced industrialised countries. The third part focuses on work hour reduction in Korea, examining the general work hour situation and actual work practices. This section also provides a review of the cases of reduction in working hours achieved by KCTU unions. The last section presents the various practical and policy imperatives arising from the study.

The first section provides a review of the argument for and against work sharing through working hour reduction. It also focuses on the empirical literature on the employment effects of work hour reduction to identify the theoretical and empirical foundation of the work hour reduction programme. The study found that there is a significant employment effect on work-sharing based on the reduction of working hours. It demonstrates that work hour reduction is an important measure for employment retention and creation, especially in aggravated employment situation.

The second section turns the attention to eight countries - France, Germany, U. K., the Netherlands, Italy, Sweden, Denmark, and Japan - where there have been extensive efforts on work hour reduction and work-sharing. The study found that these countries have adopted jobs considered the most paramount national concerns and adopted working hour reduction to address the problem. The study also found that the governments, trade union movements, and employers in these countries are endeavouring to develop various practical policy measures to bring about a reduction in working hours.

The third part - composed of three sub-sections - looks at the working hour situation in Korea. The first sub-section provides a broad empirical study and analysis of the situation. It examines the trends in working hours, international comparison, the relationship between productivity and working hours, and the changes in working hours brought about by the recent wave of employment adjustment. The second chapter reports the result of the survey on working hours conducted among KCTU unions. The survey focused on the changes in employment levels and quality, wage levels, trends in work hour reduction, and trade union attitudes toward work-sharing and the various measures introduced to deal with the unemployment problem. The third sub-section examines the Hyundai Motors, Inchon Iron and Steel, and the Korean Federation of Commercial Workers Unions as cases studies on efforts to reduce working hours. The study confirms the low level of effort on work hour reduction in Korea, but identified a number of important lessons through the success or failure stories.

The last section deals with policy and practical tasks faced by the trade union movement in pursuing the challenge of working hour reduction. The first chapter examines different types of work-sharing and their significance and methods. In doing so, it identifies the lowering of the statutory working hours stipulated in the Standard Labour Law, reduction of over-time work and work-sharing, increasing rest days and holidays, paid/unpaid leave, early retirement linked to new hiring, and job sharing as significant areas for the trade union initiative.

The chapter also examines the various other issues related to work hour reduction - wage adjustment, employment effect, flexibilisation of working hours, rearrangement of work organisation, and persuasion of union membership towards the policy imperative.

The second chapter of the last section of the book presents some policy and practical guidelines for work hour reduction to be considered for the KCTU programme of action. It calls for the lowering of statutory working hours to 40 hours a week, the enactment of a special law on promotion of work hour reduction, curtailment of overtime work, the establishment of a special fund for wage and income supplementation, and specific industry-wide agreement for additional reduction of working hours to 35 to 38 hours a week as a means to maintain the current employment level.

The book contains, as an appendix, the translation of the French law on working hour reduction (Loi Aubry) enacted in 1998.