Asia-Pacific employment law bulletin 2024

South Korea

President Yoon’s policies

South Korea has now passed the two-year anniversary of the election of President Yoon Seok-Yeol, who ran on the promise of introducing more business-friendly initiatives with respect to labour and employment laws and their enforcement. To date, we have not seen substantial changes in the law in this regard, largely because a majority of National Assembly members belong to the opposition party. We have, however, seen some notable actions. One example is that President Yoon’s administration introduced a Presidential Decree to require labour unions to disclose their financial statements from 1 January  2024. This Decree is generally seen as favourable for businesses because it requires the labour unions to provide some transparency in relation to their operations.

Labour audits

In the post-Covid era, the Ministry of Employment and Labour (MOEL) has resumed its regular labour audits of companies. Prior to the pandemic, the MOEL conducted an average of over 25,000 labour audits on Korean companies each year.  We expect the MOEL to resume their audits in this range in 2024 and going forward. South Korean companies should expect to be audited around once every three years.

Labour reforms

Since June 2022, the Yoon administration has announced a reform of the labour market which is primarily aimed at flexible working hours. The MOEL announced the “69-hour work week” in March 2023, but the policy was criticised for not reducing the number of hours working hours, and potentially even leading to longer working hours. Based on the results of the National Survey on Working Hours, conducted from June to August 2023, the South Korean government announced a revised policy direction on 13 November 2023, stating that flexible working hours will only be applied for certain industries and occupations, with the 52-hour working week remaining in force. A new plan for working hours is expected, which will specify detailed plans for reorganisation through dialogue between employees, management and the government.

Supreme Court ruling on 52-hour work week

On 7 December 2023, the Supreme Court issued a notable ruling regarding the 52-hour work week. As background, Korea operates on a 40-hour work week (eight hours, five days a week) and, with mutual agreement between the company and employee, non-managerial employees are allowed to work up to 12 hours of overtime, night-time, and holiday work (collectively ‘overtime’) per week.  More specifically, if an employee works more than eight hours a day, the company must pay the employee 150% of the employee’s ordinary wage for the overtime work. Further, if an employee works more than 12 hours of overtime per week, the company and its representative(s) may be liable for criminal sanctions.

In its ruling, the Supreme Court held that it did not find a violation of law when an employee worked for more than eight hours a day for four consecutive days (in this case 49.5 hours), but then gave the employee the rest of the week off, as long as the total hours worked in that week was less than 52 hours and the total hours of overtime work was less than the statutory limit of 12 hours per week.  We expect that the MOEL will adopt guidelines going forward that are consistent with this Supreme Court ruling.

Looking forward

The National Assembly elections, which take place once every four years, are scheduled to be held in April. These elections have the potential to impact the current make-up of the National Assembly, which, as noted above, is currently dominated by the opposition party and which, in turn, may have an influence on South Korean policies on labour and employment law and its enforcement.

Kim & Chang: Matthew Jones, Cho Beom Kon, and Yehjin Jo