Korea Labor LawPresent to Malaysia Embassy In Korea

2013 March 20th

Maven Song / Labor Attorney

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Expectation

Embassy As an Employer • Labor Standard Act ++ 70%• Trade Union and Labor Relations 20%

As an Advisor to Malaysia Investors • Labor Standard Act ++ 50%• Trade Union and Labor Relations 20%

As an Advisor to Malaysian Work-ers

• Labor Standard Act ++ 50 %• Trade Union and Labor Relations 20%• Act on Foreign Workers’ Employment,

Etc. 0% - contract, visa, protection, permit - reentry, return, social security insurance

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Law Structure Malaysia Korea (Special Law)

• Employment Act 1955 • Children and Young Persons Act

• Labor Standard Act• Wage Claim Guarantee Act• Act on the Protection, etc. of Fixed-Term and

Part-time Employees• Act on the Protection, etc. of Dispatched

Workers• Equal Employment Act

• Trade Union Act 1959• Industrial Relations Act 1967

• Trade Union and Labor Relations Adjustment Act

• Act on the Promotion of Worker Participation and Cooperation

• Employee Provident Fund Act • Employee Retirement Benefit Security Act

• Social Security Act 1969• Workmen’s Compensation Act 1952

• Industrial Accident Compensation Insurance Act

• Employment Insurance Act

• Occupational Safety and Health Act• Factories and Machinery Act 1967

• Occupational Safety and Health Act

• No ‘BUMIPUTRA’ Policy in Korea

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Rules of Employment Requirement • Mandatory to prepare for

Workplace• Report and File to MOL

Contents • Working Hours , Wage• Allowance, Retirement, Severance• Bonus, Expenses, Education• Protection, Safety and Health• Industrial Accident, Etc

Preparation • Collective Consultation - w/Majority Composed Union - Otherwise w/ Majority workers

Conflict with Collective Agreement or Law

• MOL Order the Amendment

Conflict with Labor Contract • Apply ‘Advantageousness Idea’

Unfavorable Change • Need Employees’ Collective Consent - Subject Group - Collective Method

Company Logo Foreign mission as Employer

Korea Labor Law Scope

• LSA - 5 or more Workers Employed Business - Apply Partial to fewer than 5 Employed - Not to which Employs only Relatives - Not to Domestic Workers • Social Insurance - All Business Employing Workers

Legal Responsibility • Territorial Principle• Vienna Convention - Article 33 - Article 41 ①• Private International Act - Article 28• Supreme Court Restrictive theory of Sovereign immunity - 97Da39216 (US Army Vs. Employee)

Immunity • Vienna Convention - Article 22 ③ - Article 31 ①• Supreme Court - Absolute theory of Sovereign immunity - 89Nu4765 (France Embassy Vs. Union) - 96Da16940 (Jaire Republic Embassy Vs. Landlord)

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Vienna Convention Article 22 ③

The premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution

Article 31 ① A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administra-tive jurisdiction, except in the case of:

Article 33 ③ A diplomatic agent who employs persons to whom the exemption provided for in paragraph 2 of this Article does not apply shall observe the obliga-tions which the social security provisions of the receiving State impose upon employers.

Article 41 ① Without prejudice to their privileges and immunities, it is the duty of all persons enjoying such privileges and immunities to respect the laws and regulations of the receiving State.

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Private International Act Article 28 (employment Contract)

(1) In case of an employment contract, even if the parties choose the applicable law, the protection, given to the em-ployee under the mandatory provisions of the country of the applicable laws designated under paragraph (2), shall not be deprived.

(2) In case the parties do not choose the applicable law, irre-spective of the provisions of Article 26, the employment con-tract concerned shall be governed by the law of the country where the employee habitually provides his service. In case the employee does not habitually provide his service within one country, the law of the country, where the business office of the employer who hires the employee located, shall govern.

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Definition

Malaysia KoreaContract of Service Labor Contract

Rest Day Weekly Paid Holiday

Apprenticeship InternshipProbation Period

Employee Worker

Inspecting Officer Labor Inspector

N.A Workers’ Representative

Constructive Dismissal N.A

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Source of LawLabor Laws • Compulsory Provisions

- Penalty - Enforcement Levy• Optional Provisions• Do not provide the Cookie Cutter Formula• Define the Minimum Legal Boundary

Rules of Employees • Prepared by Employer• Terms and Conditions• Disciplinary Measures• Unfavorable Modification Rule

Collective Agreement • Union Collective Bargaining

Labor Contract • Terms and Conditions

Bylaws of Labor-Management Council

• Managerial Discussion / Resolution• Grievance Handling Procedure

Other Laws • Constitution • Civil Act

Apply ‘Advantageousness Rule’ in Confliction

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Employee Consent Matters

Matters Consent Type

Managerial Dismissal §24• Consult with Workers’ Representative• In 50 days Advance

Using Leave as Compensation of Ex-

cessive working hours §57

• Written Consent of Workers’ Repre-sentative

Substitution of Paid Leave §62• Written Consent of Workers’ Repre-

sentative

Night / Holiday Work to Female and

Child

• Consult with Workers’ Representative

Unfavorable Change to Rules of Em-ployment

• Collective Majority Consent - Related subject group decision

Deemed Working Hour §58 • Written Consent of Workers’ Repre-sentative

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Hiring 1Requirement Provisions and ConsiderationContract Type • Regular Employee

- Unfixed Term• Irregular Employee - Fixed Term - Part Time - Dispatched / Contracted Worker• No Formal Apprenticeship Contract

Females and Minors • Minimum Age (LSA §64)• Prohibition work (LSA §65) - Pregnant or Female from Dangerous work - Female from Dangerous to Pregnant

Probation • Contract with Reserved right of Voidance - Still Require Lawful Dismissal with lower standard• No Clear Provision on Terms - Practically 3 + 3 Months• No Advance Notice required on Dismissal

Foreign Workers • Act on Foreign Workers’ Employment, Etc.

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Hiring 2Legal Requirements Provisions and Consideration

Equal opportunity • Gender, Social Class, Race, Nationality,,,

Elimination of Intermediary Ex-ploitation

LSA §9 : Shall not Intervene in Hiring process for Profit

Written Particulars in Contract • Wages (Method of Calculation, Pay-ment)

• Contractual working hours• Holidays • Annual paid leave• Probation Period if applicable

Prohibition of Interference with Employment for ex-Employee

LSA §40 : Shall not communicate Black list

Preserve the Documents for 3 years

LSA §42 - Registry of Workers - Labor Contract

Termination Notice Period in Con-tract

• Malaysia EA 1955 - 4-8 weeks - Liable to Both Parties • 30 days at Employer side

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TerminationTypes • Dismissal

- Managerial Reason - Disciplinary Action - Low Performer - Define at Rules of Employment• Retirement - Age - Contract Term - Voluntary Resignation

Legal Requirement • Restriction on Dismissal, etc. (LSA §23) • Notification (LSA §26, §27) - 30days Advance or pay - Written for reason and date - Exceptions• Restriction during Maternity / Sick leave

Procedure and Process • Should define at Rues of Employment

Remedy Action • Raise a Motion to Labor Relations Commissions• File a Civil Action - Strong Enforcement Power - Can expect Provisional Disposition

Constructive Dismissal • Not Applicable in Korea

Dismissal for Managerial Reasons

Labor Standard Act Article 24 and Judicial Rulings Urgent necessity in relation to the business Efforts were made to avoid dismissal Fair criteria for the selection of those persons subject to dis-

missal - ex) Older, Performance, # of Dependents, Irregular staff,, Informing the workers’ representative 50 days in advance and

consulting in good faith Report to MOL as Specified in LSA Presidential Decree

Labor Standard Act Article 25 Preferential Re-employment

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WagesBasic Principles (LSA §43) ① Full Direct Cash ② ③

④ Fixed day at least once per monthDefinition • Ordinary Wages

• Average WagesAllowance • Overtime (50% additional)

• Night work (50% additional)• Holiday work (50% additional)• Other benefits (Food, Car,

Family,,)Social Security Insurance Employer’s Contribution - Not Wage

Lawful Deductions Union Fee, Advances, Miscalculation,,

Overdue Payment Surrogated Payment by Government

Emergency Payment LSA §45 : Reasons prescribed in Decree (Childbirth, Disease,,,)

Business Suspension Allowance LSA §46 : 70/100 Average Wage

Bonus • By Contractual - Part of Wage• By Discretionary - Not Wage

Wage Determination

Wages Non-Wages

• Regular and continual bonuses

• Severance pay (post-paid

wage)

• Paid holidays and annual leave

• Allowance for suspended work

• Monetary payment for benefit

- Price-linked allowance

- Commuter allowance

- Family allowance

- Other established practice

• Monetary payment made as a to-

ken of courtesy, goodwill, or favor,

such as allowance for condolence

or congratulations

• Expense reimbursement

• Dismissal allowance

• Accident Compensation

• Suspended work compensation

during leave for Industrial Accident

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Wage Definitions

Ordinary Wage Average Wage

Contractual Salary

- Uniform

- Periodic depends on Purpose

. Daily, Weekly, Monthly

Calculated at Specific occasion

- Daily Average in recent 3 months

- in case Lower

Apply to

- Overtime, Night Allowance

- Replacing Dismissal Notice

- Unused Annual Leave Payment

Apply to

- Severance Pay

- Suspended Work Compensation

- Unused Annual Leave Payment

- Accident Compensation

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Retirement Pension PlanRelated Law Employee Retirement Benefit Security Act (ERBS)

Retirement Pension Plan• Enacted 2005 December• Revised 2012 July

• Types - Defined Benefit Plan (DB) - Defined Contribution Plan (DC) - Individual Retirement Plan (IRP)• Restricted Interim Payment (ERBS Decree §3)• Managed by Outside Financial Agency (Pension

Trustee)• Lump-sum upon Resignation or Pension from

age 55Severance Pay System- Abolished Article LSA §34

• Lump-sum upon Resignation• Flexible Interim Payment• Pre-determined Amount• Managed by Company

Employer Contribution • for Each year

Legal Requirement • Establish the Pension Regulation• Consent of the Workers’ Representative for New

Type introduction or Change the Type• Permission from MOL to be the Pension Trustee

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Working HoursStandard

Exceptions • Flexible Working Hour System (LSA §51)• Selective Working Hour System (LSA §52)• Deemed Working Hour (LSA §58)

Overtime (LSA §53) • 12 hours per week• Special Overtime with approval of MOL• Exception by Business type (LSA §59) - Transportation, Medical, Entertainment,,,• Total Exemption of the Working hour rule (LSA §63) - Agricultural, Marine Product Cultivation,,,

Weekly Paid Holiday Average one or more holiday per week (LSA §55)

Protection • Minor (LSA §69, §70)• Female and Pregnant (LSA §70, §71)• Exception - Permission from MOL - Workers’ Rep. consent or Employee request

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LeaveAnnual Paid Leave • Right to request Annual Paid Leave LSA §60

• Right to request Unused Annual Paid Leave Al-lowance LSA §61

• Promoting the use of Annual Paid Leave LSA §61Maternity Protec-tion

• Maternity Paid Leave (90 days) - Korea : Current Employee Only - Malaysia : Responsible to ex-Employer (9 Months)• Child Care Leave • Paternity Leave

Holidays • Legal Holidays - Weekly Paid Holiday by LSA §55 - The Labor Day (May 1st)• Public Holidays - Can be substituted by Annual Leave upon agreement of Workers’ Representative §62

Sick Leave • Practically Consume Annual Leave First• Need to define at Rules of Employment

Menstruation Leave

Allow Non Paid leave upon Request (LSA §73)

Annual Leave Comparison

Malaysia EA 1955 Korea LSA

• 8-16 days by # of years Served

• Substituted at

- Holiday Act 1951

- National Holidays

• 15days for workers with last year• 1 day per month for workers served • Add 1 day for each 2 years service - Max. 25 days• Substitution of Annual Leave §62 - Order to use on Particular day upon agreement of Workers’ Representative §62• Promoting the unused Leave §61• Unused Annual Leave Allowance §60 - 3 Years’ Claim right - Include the already occurring Allowance into Average Wage for Severance Calculation

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Sick Leave Comparison

Malaysia EA 1955 Korea LSA / IACIA

• 14-22 Paid days by # of Years

Served

• 60 days Paid Hospitalization

- Holiday Act 1951

- National Holidays

• Ruled by Rules of Employment

• Industrial Accident Compensation Insurance Act - Wage replacement Benefit § 52 . 70/100 of the Average Wage• Injury-Disease Compensation Annuity §66 - After 2 years from Accident, If the Employee is still under recovery and cannot continue to work, the employment can be Terminated by paying this Annuity

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Disciplinary MeasuresTypes of Punishment • Warning

• Demotion• Job Suspension• Transfer• Wage Reduction• Dismissal

Justification • Reason• Fair amount of Severity Level• Disciplinary Action History - Opportunity of self Improvement• Due Process and Procedure - Opportunity of self Defense

Rules of Employment • Types of Disciplinary Action• Positive List of Reasons• Related Severity to each type• Due Process and Procedure - Disciplinary Committee

Remedy Action by Employee

Remedy Action to Unfair Measures

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Social Security Insurance National Health Insurance

Premium: 5.33% of Wage (2.665% for employer; 2.665% for employee) Mandatory for All Korean Nationals as either the Insured or Dependents

National Pension Premium: 9% (4.5% for employer; 4.5% for employee) Eligible to All Korean Nationals aged 18 – 60 Mandatory for All Employed Workers

Employment Insurance Unemployment benefit: (0.45% for employer; 0.45% for employee) Security & Skill Development: (0.25% ~ 0.85% for employer) Mandatory for All Employed Workers

Industrial Accident Compensation Insurance Premium rate is Based on Type of Industry (Employer is the Subscriber) Around 1 % of wage for office worker Mandatory for All Employed Workers

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Company Logo Industrial Accident

www.themegallery.com

Related law Labor Standard Act Industrial Accident Compensation Insurance Act

Cost Taker Employer Country

Benefits • Medical care• Wage replacement – 70% • Disability • Nursing• Survivor’s• Lump sum• Funeral

• Medical care• Wage replacement• Disability• Nursing• Survivor’s• Injury Annuities• Funeral• Rehabilitation

National Health Insurance Act

Article 53 (Restriction of Benefits)☎ (1) When a person who is eligible to receive insurance benefits falls under one of the following subparagraphs, the Corporation shall not pro-vide any insurance benefit:4. When he receives or is eligible to receive insurance benefits or com-pensations under other Acts and subordinate statutes due to a disease, an injury or a disaster that is related to his business or in line of duty.

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Equal Employment

Related Law • Equal Employment Act

Prohibition of Gender Discrimination

• Hiring §7• Wage and Welfare §8, §9 - Same wage under same business and same value labor• Training, Development , Promotion §10• Retirement Age• Dismissal §11 - Prohibit Predetermined condition such as Marriage, Childbirth,,,

Sexual Harassment Employer’s Duty

• Prohibition at Work §12 - By Superior, Workers or Clients• Implement Education program §13• Disciplinary Action & Care §14

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Female Protection

Restriction on Overtime / Night work LSA §70 §71 §74

Menstruation Leave Unpaid upon Request §73

Health Examination of Pregnant Paid upon Request

Maternity Leave • 90 days (45 after Childbirth)

Child Care Leave• For aged below 6 years• 40% Average Wage from

Employment Insurance• Not allow dismissal on Leave• Return to the Same Work

Reduced Hours of Work • 15 – 30 Hours / week

Paternity Leave • 3 days

Nursing Break • 2 breaks, , per day

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Collective Labor RelationsEmployee Rights • Constitution Article 33

- Independent Association - Collective Bargaining - Collective Action

Labor Union Management • Allow Multiple Unions

Industrial Actions • Justification - Subject Group - Purpose on Working Condition Only - Methods - Timing - Procedural (Voting by Union Members)• Obligation to pay Wage (No work No pay)

Work to Rule Case by case (Belonging to Industrial Action)

Employer’s Right Lock-out – Principle of Equal Weapons

Collective Agreements

Unfair Labor Practice

Mediation / Compulsory Arbitration Labor Relations Commission

Remedy Action Labor Relations Commission

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Irregular Employment Management

Related Law • Act on the Protection, Etc., of Dispatched Work-ers

Part-Timer • Time Proportion Protection

Short Term Contract • Less than 2 years

Dispatched • Less than 2 years• Positive list of Jobs Permitted for Dispatch• Duties of Employer - Sending Employer - Using Employer

Outsourcing • Illegal Contracted Workers

Discrimination Collection System • Equal Treatment compare to ‘Same or Similar Job’

• Justifiable Reason• Remedial Action to the Labor Relations Com-

missionIllegal Cases • Direct Obligation of Employment to the Using

Employer §6 ②

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New Government Strategy

Irregular Workers Protec-tion

• Recommend to rehire as Regular Workers• Prohibit Discrimination • Prohibit Illegal Dispatch / Contract Workers - Hyundai Motors Co. - Emart Co.

Secure Employment • Managerial Dismissal - Higher Standard of Justification - Commitment on Preferential Rehiring• Announce the Employment Disaster Area• Legislate Retirement Age to 60

Shorten the Working Hours • Include Holiday work hours to Overtime Limit

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Thank You