Precarious Work of Korea

The expressions ‘non-standard work’ and ‘non-regular work’ are generally used rather than ‘informal economy’ and ‘precarious work in Korea. Some people regard temporary and daily workers as non-standard workers. But others define non-standard workers, estimate their scale and the wage differential between standard and non-standard workers. The non-regular workers protection law (Act on the Protection, etc., of Fixed-term and Part-time Employees, November 30, 2006) took effective on 1 July, 2007. The Act was established to solve the problems of job insecurity and discrimination against non-standard employees, it has become lost only after two year has passed. According to the Act, the period to use fixed-term workers should be limited to 2 years and then the workers with more 2-year service shall be hired as regular workers. The legislators passed the Act to solve the problems of job insecurity and discrimination against non-standard employees. However the result was the contrary of the intention. The first negative impact is that employers tend to terminate the labour contract with the fixed-term workers before the two year. The second negative impact is that employers tend to outsource the departments or lines to contractors and cut their relationship of direct employment from the fixed-term workers, who will do the same jobs in the same workplace, but hired by different employer (contractor). Also, it is noted that employers create a new job category and dispatch the fixed-term workers to new lines or departments which have different standards of promotion and wage on the basis of "No-fixed-term" contract. Recently there is a critical debate on the extension of period for fixed-term contract to avoid en masse dismissals of fixed-term employees. It must be noted that the non-standard workers could be more protected by loosening the legal protection for standard workers. Relative to standard workers, non-standard workers can be more easily dismissed and hired, and they can be paid lower wages and fringe benefits. The labor cost of a non-standard worker is lower than that of a standard worker. Dismissing standard workers especially requires a great deal of money and effort because of the workers’ legal protection. Although standard workers at organized establishments are paid more than those at unorganized ones, non-standard workers at organized establishments are paid less than those at unorganized ones. Labor unions heighten standard workers’ wages but, in response to this, employers substitute standard workers with non-standard workers and lower non-standard workers’ wages. Therefore, if labor unions turn to their appropriate place, wage differences between standard and non-standard workers are narrowed and employers do not substitute standard workers with non-standard workers.