Recently, the labor negotiations regarding performance bonuses at Samsung Electronics concluded successfully with active government mediation. However, the labor union of Samsung's non-semiconductor DX division is protesting against receiving lower bonuses compared to the semiconductor (DS) division, and this discontent is spreading to other companies such as Kakao, LG, and Hyundai Motor.
Aju Economy spoke with Im Seo-jung, a legal advisor at Hwawoo Law Firm and a former vice minister of the Ministry of Employment and Labor, who has over 30 years of experience in the field, to discuss the essence of the situation and his views on recent labor issues.
Im stated, "As global competition intensifies, we must question whether it is appropriate to demand that a significant portion of operating profit be directly linked to labor performance. This could lead to feelings of relative deprivation among workers in small and medium-sized enterprises and the younger generation."
He added, "The method of unilaterally determining performance distribution by companies can no longer be sustained. The performance bonus system must not undermine long-term competitiveness, and corporate performance should also be approached from a social responsibility perspective." Below are excerpts from the interview with Im.
- SK Hynix has provided employees with performance bonuses exceeding 100 million won, intensifying labor disputes over bonus calculations in large companies like Samsung Electronics. Although a government-mediated agreement was reached, what impact do you foresee on the wage systems of small and medium-sized enterprises and the industry as a whole?
The recent debate over performance bonuses is not merely about how much more one receives. It raises a fundamental question about how our society shares corporate performance and based on what criteria. However, the demands from the Samsung Electronics union regarding performance bonuses have sparked significant social criticism beyond simple labor disputes.
After experiencing a prolonged period of poor corporate performance and structural crises before the recovery of the semiconductor market, we must question whether it is appropriate to demand that a significant portion of operating profit be directly tied to labor performance. Furthermore, the issue of social equity felt by the general public cannot be overlooked. The wage gap between regular employees in large corporations and those in small and medium-sized enterprises is already considerable, potentially leading to feelings of relative deprivation among workers in smaller firms and the youth.
That said, we should not view workers' demands for performance distribution negatively. The previous method of unilateral determination by companies can no longer be sustained. The solution lies not in competitive amounts or power struggles. Transparency in the criteria for calculating performance bonuses is necessary, and the bonus system must not undermine long-term competitiveness. Additionally, corporate performance should not be seen solely as a labor-management issue but should also be approached from a social responsibility perspective. The issue of performance bonuses is not simply about giving more or less.
Labor rights are important, and so are shareholder rights. However, what is more crucial is social acceptability and sustainability. Both labor and management must move beyond merely asserting their rights to consider the future competitiveness of the company and the balance of society as a whole to create a healthy performance-sharing model.
- Discussions surrounding the Yellow Envelope Law (amendments to Articles 2 and 3 of the Labor Union Act) are heating up. In particular, if the 'expansion of the employer's scope' is realized, it is expected that primary companies will have to negotiate directly with subcontractor unions, leading to significant confusion in the field.
The core of the Yellow Envelope Law consists of three main points: first, expanding the scope of employers; second, broadening the scope of labor disputes; and third, limiting liability for damages related to disputes. Among these, I believe the most immediate and direct impact on industrial sites will come from the expansion of the employer's scope. Until now, our labor law system has judged employer responsibility based on the employment contract relationship.
In other words, rights and obligations have been structured around direct employment relationships where wages are paid and personnel authority is exercised. However, the amended law expands the concept of employer based on actual influence or control. This could lead to significant changes in the traditional labor law structure. Ultimately, what companies will need after the Yellow Envelope Law is not just a simple legal defense strategy but management capabilities to adapt to the new labor relations order.
The government will also strive to ensure that the system quickly takes root in the industrial field and operates in the direction of bridging gaps and fostering coexistence, but this will not be easy in a situation where distrust between labor and management runs deep. In this regard, minimizing conflicts in the field while creating realistic solutions will become increasingly important.
- The introduction of AI and automation is rapidly changing the nature of jobs. With an increasing number of workers in 'legal blind spots' such as platform workers, what measures can be taken to address the dual structure gap in the labor market?
The spread of AI, robots, and the digital economy can widen the gap between high-skilled and low-skilled workers. Jobs that are difficult to categorize under traditional employment concepts, such as platform workers, special employment workers, and freelancers, are rapidly increasing. The growth rates of industries and companies are also diverging significantly. While some large corporations are generating high profits and providing performance bonuses, small and medium-sized enterprises are simultaneously facing labor shortages and low productivity issues.
In this structure, wage disparities and gaps in employment stability are bound to widen. I believe it is necessary to establish a special committee under the President or the Speaker of the National Assembly to improve the dual structure of the labor market. This committee should include not only labor experts but also experts in economics, industry, fair trade, social security, and education and vocational training to provide neutral assessments and solutions. Subsequently, labor and management, along with stakeholders, should participate in discussions to create a social consensus. A key task will be to enhance the productivity and payment capacity of small and medium-sized enterprises while expanding minimum social security and labor rights protections regardless of employment type.
Discussions on the labor union system and representation issues should also be included, along with strengthening job retraining and transition support systems in response to AI transitions. The state and companies must jointly support the movement between jobs that are disappearing due to technological changes and those that are being created.
This issue cannot be resolved through short-term measures every time there is a change in government. Addressing the dual structure of the labor market is not just a matter of reconciling interests between current labor and management; it is also directly related to opportunities for future generations. Therefore, it should be approached as a national task to enhance the sustainability of our economy and labor market, transcending the short-term interests of the government and labor.
- There is ongoing social discussion regarding the legal extension of the retirement age and the continued employment system. From the perspective of companies, concerns about labor cost burdens and the encroachment on youth jobs are significant. Do you believe that extending the retirement age without introducing a wage peak system or job-based pay system is feasible?
As the age for receiving national pension benefits rises to 65 by 2033, the current legal retirement age remains at 60. This creates a so-called 'income gap period.' However, many companies in our country still have a wage system that is heavily based on seniority. As years of service and age increase, wages also rise. While it is generally true that older workers accumulate experience and skills, there are concerns that productivity and wages may diverge due to factors such as health, job characteristics, and adaptability to technological changes.
This is why discussions about wage peak systems or job-based pay systems continue to arise. However, extending the retirement age without such systems is realistically challenging. Ultimately, sustainable solutions should not be approached as a binary issue of extending retirement age or not, but rather in the context of balancing the entire labor market. We must protect the lives of older workers while also safeguarding opportunities for the younger generation and considering the sustainability of companies.
- With the Lee Jae-myung administration in power, labor inspections by the Ministry of Employment and Labor have become much more sophisticated and stringent compared to the past. The focus on the abuse of comprehensive wage systems and wage arrears has expanded. What 'labor inspection trends' should companies pay close attention to in order to manage legal risks?
Recent changes in labor inspection policies indicate that the philosophy and methods of inspections themselves are undergoing significant changes, not just an increase in the number of inspections. Since the Lee Jae-myung administration took office, the title of labor inspectors has been changed to labor supervision officers, and the workforce is expected to expand from about 3,000 to 5,000 next year. However, what companies should focus on more than the numbers is the change in inspection methods.
In the past, inspections were primarily regular, but in the future, there is a high likelihood that unannounced inspections, planned inspections, and integrated inspections combining industrial safety and labor will be expanded. Particularly, there is a greater possibility that legal actions will be taken immediately based on the severity of violations, rather than first providing opportunities for correction as in the past. This means that for companies, the approach of 'responding when problems arise' may have limitations.
Therefore, companies must establish a system for ongoing checks on working hours, wage system operations, appropriateness of comprehensive wages, workplace harassment response systems, and safety management systems. Ultimately, the future trend of labor inspections will depend on how precisely companies are required to operate their human resources and labor management.
- Social dialogue through the Economic and Social Council (ESC) often stalls. What do you think are the reasons for the increasing difficulty in finding common ground between labor's participation and the government's mediation proposals? Do you believe a 'new framework for dialogue' is necessary to overcome this?
I believe there are several structural reasons why the ESC has not been achieving results as expected. First, there is the issue of representation, second, the issue of the implementation structure after agreements, and third, the deep-seated mutual distrust among labor, management, and the government. Social dialogue should ideally be a process of designing a shared future rather than merely adjusting short-term interests.
If the limitations that have been raised regarding the ESC, such as improving representation, enhancing operational methods, and strengthening the implementation of agreements, are addressed, significant progress can be expected. However, simply changing the name of the dialogue body or creating a new organization will not automatically resolve the issues. Fundamentally, a change in the perception of social dialogue among labor, management, and the government is necessary. Additionally, the government and the National Assembly must also make efforts to respect the results of social agreements and reflect them in policies and legislation.
- The number of 'NEET' youth has recently surpassed 400,000, reaching an all-time high, highlighting the ongoing issue of youth employment. Additionally, human rights violations and fatalities among foreign workers continue to occur annually, negatively impacting South Korea's international reputation.
The issues of youth employment and foreign workers may appear to be separate issues at first glance, but they actually represent structural problems within our labor market. The recent increase in 'NEET' youth exceeding 400,000 cannot be viewed simply as an economic issue. There are various reasons, but fundamentally, the number of jobs that young people want to pursue is decreasing, and the dual structure of the labor market is also a contributing factor.
There remains a significant gap in wages, benefits, and working conditions between large corporations and small and medium-sized enterprises, as well as between regular and non-regular workers, and young people's perceptions of work are changing. The younger generation now values the meaning of work, work-life balance, growth potential, and fairness more than simply having a job for survival. However, the current labor market still largely retains the structures of the past industrialization era.
Ultimately, both the government and companies need to change their roles. The issue of foreign workers also extends beyond mere human rights concerns to encompass our industrial structure and workforce policies. Many industries, including agriculture, manufacturing, construction, and caregiving, have become difficult to sustain without foreign labor. Issues such as restrictions on changing workplaces, language barriers, lack of information, inadequate living conditions, and insufficient safety management contribute to repeated human rights violations. In particular, the recurrence of industrial accidents and fatalities among foreign workers must be taken very seriously.
It is no longer feasible to view this as merely an issue of individual employers' misconduct; it may be a structurally connected result of outsourcing dangerous work, inadequate safety training, poor communication, and management blind spots. This can be evaluated as a labor rights issue in the international community and can affect South Korea's international reputation. A shift in perspective is needed to view foreign labor not just as a source of labor supply but as members of the labor market, and there is a need to consider improvements in the workplace mobility system and rights protection mechanisms.
Basic infrastructure such as housing, safety training, and interpretation support should also be strengthened, and the industrial safety management system should be improved to reflect the characteristics of foreign workers. Future labor policies should expand to include not only those within the existing labor market but also those outside or on the margins.
* This article has been translated by AI.
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