LABOR SNAPSHOT: MEETING THE STANDARDS

UNCLAS SEOUL 000549

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/K AND EB/TPP/BTA
PASS USTR FOR CUTLER AND KI

E.O. 12958: N/A
TAGS: ECON ELAB ETRD KS PGOV
SUBJECT: LABOR SNAPSHOT: MEETING THE STANDARDS

REF: A. SEOUL 507

B. SEOUL 548

C. 05 SEOUL 3023

D. 04 SEOUL 4843

E. 05 SEOUL 3880

F. 04 SEOUL 4149

G. 05 SEOUL 2601

SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY

SUMMARY AND INTRODUCTION
--------------


1. (SBU) This is the final report in a three-part series on
labor-management relations in the ROK. In previous cables we
described the major players (Ref A) and current issues (Ref
B). We now focus on whether Korean labor laws meet the core
labor standards contained in the Trade Promotion Authority
Act of 2002 (TPA). As set forth below, the ROK Constitution
and laws that govern labor and employment provide substantial
protections that apparently meet or nearly meet all five
standards. END SUMMARY.

CORE LABOR STANDARDS
--------------


2. (SBU) The TPA sets forth that one of the USG overall
trade negotiating objectives must be to promote respect for
worker rights and the rights of children consistent with core
labor standards. The Act defines those standards to be: (A)
the right of association; (B) the right to organize and
bargain collectively; (C) a prohibition on the use of any
form of forced or compulsory labor; (D) a minimum age for the
employment of children; and (E) acceptable conditions of work
with respect to minimum wages, hours of work, and
occupational safety and health.

RIGHT OF ASSOCIATION
--------------


3. (SBU) Workers in the ROK have a Constitutional right of
association (Article 21) and the right to form or join trade
unions (Article 33). This right is further spelled out in
the 1997 Trade Union and Labor Relations Adjustment Act
(TULRAA),which states that a labor union can be formed by an
organization or associated organizations of workers for the
purpose of maintaining and improving their working conditions
and enhancing their economic and social status. The
organization will not be regarded as a labor union in cases
where an employer or other persons who act in the interest of
the employer are allowed to join; in cases where most of its
expenditures are supported by the employer; in cases where
activities are aimed only at mutual support or improvement;
in cases were those who are not workers are allowed to join;
and in cases where the groups' aims are mainly directed at
political movements.


4. (SBU) The OECD in 1996 expressed concern that public
servants and teachers could not organize unions in Korea.
The situation has changed significantly since then. In 1999,
about two-thirds of civil servants obtained the right to join
workplace associations to consult with management on working
conditions and grievance handling. Teachers obtained the
right to join trade unions (but not to strike) under a
separate 1999 law. In a law that went into effect on January
28, 2006, the National Assembly recognized lower grade (below
grade 5) public servants' right to organize, bargain
collectively, and negotiate collective agreements. The law
applies to approximately 75 percent of government employees.


5. (SBU) However, the Korean Government Employees Union
(KGEU),with 140,000 members, and the Confederation of
Government Employees, with 70,000 members, have refused to
register under the law because it does not apply to all
public servants and does not allow the right to strike or
take other collective action. The International Labor
Organization (ILO) maintains that public servants should,
without distinction, have the right to form and join
organizations of their own choosing and that Korea's total
exclusion of public servants of grade 5 or higher is a
violation of the right to organize. Diverging from the ILO,
the OECD said that Korea has followed through on its
commitment to allow trade unions endowed with bargaining
rights.


6. (SBU) There is also an issue regarding restrictions on
the right to strike among sectors that deliver "essential
services," such as railways, gas, electricity and water, oil
refineries and supply, hospitals and other medical services,
and telecommunications. In these fields, industrial conflict
is subject to compulsory arbitration, which the ROKG has said
is necessary to protect national security and guard against
economic loss. The ILO, however, has argued that the
restrictions should only apply under conditions of "imminent
threat to the life, personal safety or health of the whole or
part of the population." The labor reform roadmap (Ref B)
suggests that instead of requiring compulsory arbitration for
industrial actions involving essential public services, the
law should be changed to require minimum services in areas
where complete work stoppages would threaten the safety,
health and daily lives of the public. Collective action in
other circumstances would be permitted.


7. (SBU) In addition, international organizations have also
criticized Korea for the detention of trade unionists.
Overall, the number of detained trade unionists has declined.
In 2004, the number of arrested trade unionists declined to
71 from 165 in 2003. Although government figures for 2005
are not yet available, it appears from press reports that
between 20 and 30 were arrested last year. The Minister of
Labor assured us in June 2005 that, in recent years, all
arrests were the results of workers' acts of violence,
"behavior that is not tolerated in any other OECD member
country" (Ref C).


8. (SBU) The OECD and ILO have also expressed
freedom-of-association concerns over employers' payment of
full-time trade union officials. As discussed Ref B,
employers currently pay full-time union workers, even though
they only work in the union office. This practice will end
January 2007. The government's labor reform roadmap would
allow employers to pay their union officials within certain
limits.


9. (SBU) Further, the OECD and ILO have criticized Korean
law for disqualifying an organization for union status if
persons who are not workers are allowed to join. Rather than
exclude dismissed and unemployed workers as a matter of law,
the OECD and ILO maintain that unions themselves should be
able to determine the qualifications for union membership.
The roadmap would change existing law so that membership in
enterprise-level unions would be limited to those who are
employed by the enterprise. Qualifications for membership in
non-enterprise based unions, meanwhile, would be decided by
the unions themselves.

RIGHT TO ORGANIZE AND BARGAIN COLLECTIVELY
--------------


10. (SBU) Workers have constitutional and statutory rights
to organize and bargain collectively. According to Article
33 of the Constitution, "to enhance working conditions,
workers shall have the right to independent association,
collective bargaining, and collective action." The TULRAA
elaborates that it is an unfair labor practice to dismiss or
treat a worker unfavorably because he has joined, attempts to
join, or tries to organize a trade union. The trade union
representative has the authority to bargain and make a
collective agreement with the employer's association for the
trade union and its members. The parties have a statutory
obligation to bargain in good faith. Unjustified refusal or
delay of the execution of a collective agreement or of
collective bargaining is an unfair labor practice, under the
TULRAA.


11. (SBU) International organizations have criticized Korea
for not allowing multiple trade unions at the enterprise
level. The government initially prohibited the practice out
of concern for inter-union rivalry and the loss of time and
resources for the employer in bargaining with several unions
at the same company. The law will change in 2007 to allow
multiple unions (Ref B).


12. (SBU) Additionally, the ILO has also criticized Korea
for requiring persons who assist trade unions and employers
in collective bargaining or in cases of industrial conflict
to register in advance with the government. The roadmap
proposes that the third-party assistance reporting and
penalty provisions should also be abolished.

PROHIBITION OF FORCED OR COMPULSORY LABOR
--------------


13. (SBU) Article 12 of the Constitution prohibits forced
labor. The TULRAA states that an employer shall not force an
employee to work against his own free will through the use of
violence, intimidation, confinement, or any other means by
which mental or physical freedom of workers might be unduly
restricted.


14. (SBU) In practice, forced or compulsory labor is mainly
a problem in the context of the ROK's sizable sex trade. In
2003, the government estimated that around 330,000 women were
involved in the industry. We understand from government and
NGO contacts that the domestic sex trade is run largely on a
debt bondage system. That is, women entering the sex trade
are encouraged to borrow money in order to purchase clothing
and accessories, or even the opportunity to work in a
particular location. The debt rapidly grows so that the
women, even if they want to stop work, are compelled by the
debt (and threats to use legal and extralegal means to
collect) to continue working. The government in 2004 passed
sweeping legislation aimed at eradicating this industry (Ref
D). The laws strengthened the penalties associated with
prostitution and trafficking, and provided a support
structure, including legal, medical and social assistance,
for women trying to escape. The laws appear to have been
somewhat successful in raising awareness of prostitution as a
crime and in helping a number of women eradicate their debts
and retrain into legitimate vocations. However, prostitution
and trafficking, and the coerced labor behind much of it,
continues to be a concern (Ref E).

CHILD LABOR PRACTICES AND MINIMUM AGE FOR EMPLOYMENT
-------------- --------------


15. (SBU) The TULRAA provides that minors under the age of
15 shall not be employed in any work. However, such minors
may work with an MOL employment permit certificate, but only
if compulsory education (which is mandatory through middle
school) is not impeded. For each minor worker under the age
of 18, an employer must keep at each workplace a copy of the
minor's family register verifying his or her age and a
written consent of his or her parent or guardian. Neither a
person with parental authority nor a guardian may enter into
a labor contract on behalf of a minor. A person with
parental authority, a guardian, or the Minister of labor may
terminate a labor contract, if the contract is deemed
disadvantageous to the minor. Work hours of a person between
15 and 18 may not exceed seven hours per day and 42 hours per
week, except that work hours may be extended for one more
hour per day and six more hours per week by agreement of the
parties. (This provision is gradually being revised to lower
the total permissible hours per week to 40. Currently,
businesses with over 300 workers must abide by the new
standards. The rest will phase in through 2011.) Minors may
not work in a pit, unless authorized by Presidential decree.
The ROK has ratified ILO Convention No. 138 on Minimum Wage
and Convention No. 182 on the Worst Forms of Child Labor.
Child labor is not considered to be a problem in the ROK.

ACCEPTABLE CONDITIONS OF WORK: WAGES, HOURS, AND SAFETY
-------------- --------------


16. (SBU) The Minimum Wage Act establishes a Minimum Wage
Council that determines the minimum wage each year in
accordance with the cost of living, wages of similar workers,
labor productivity, and distribution of income. In 2005, the
Council set the minimum wage at 3,100 won (3.18 USD) per hour
and 24,800 won (25.45 USD) per day. This was an increase of
9.2 percent from the previous year. Workers earning the
minimum wage may have difficulty providing a decent standard
of living; however, most blue-collar workers earned
significantly more than the minimum wage.


17. (SBU) The ROK is currently transitioning from a 44 hour
to a 40 hour work week. Businesses with over 1,000 employees
switched July 1, 2004, and businesses with between 300 and
1000 employees switched on July 1, 2005. The implementation
dates for the remaining employers are as follows: 100 and 300
employees (July 1, 2006); 50 to 100 employees (July 1, 2007);
20 to 50 employees (July 1, 2008); the remainder will switch
prior to 2011 on dates yet to be determined. By law,
employees are entitled to holidays, monthly paid leave,
annual paid leave, and for women, menstruation leave,
maternity leave, and nursing leave. A worker who has an 80
percent or higher attendance rate in a given year is entitled
to 15 days of paid leave.


18. (SBU) The Industrial Safety and Health Act promotes the
safety and health of workers by establishing standards on
industrial safety and health. The Act charges the government
with responsibility for establishing industrial safety and
health policy and the business owners with the responsibility
of observing standards for the prevention of industrial
accidents. Companies that employ 100 or more workers must
appoint a person to be in charge of safety and health
management. The company must also establish an industrial
safety and health committee comprised of an equal number of
workers and employers. If there is an imminent danger of an
industrial accident, or if a serious accident has occurred,
the business owner shall take necessary measures for safety
and health, including suspension of operations, until work
can be resumed in accordance with safety requirements.
Workers who sustain injuries due to occupational accidents
may receive compensation in accordance with the Industrial
Accident Compensation Insurance Act.


19. (SBU) Nevertheless, Korea's accident rate was rather
high. According to the Korea Occupational Safety and Health
Agency, there were 2,825 fatalities in 2004 related to
industrial accidents. The government recently introduced a
plan to publicize and impose sanctions on work places that
have a high rate of accidents. In July 2005, the Ministry of
Labor said that construction companies with high accident
rates would be restricted from bidding for government
projects.


20. (SBU) Conditions of work appeared to be most problematic
for foreign workers. There are over 400,000 foreign workers,
mostly illegal, who come from China, Bangladesh, Mongolia,
the Philippines, Thailand, Nepal, Vietnam, Indonesia, Sri
Lanka, and Pakistan to work in the ROK. Most are employed to
perform Korea's "3D" ("dirty, difficult, and dangerous")
work. The issue of foreign worker safety drew national
attention in January 2005 when eight Thai women were
paralyzed from working with toxic solvents at an electronic
parts factory. The Ministry of Labor subsequently conducted
inspections in 5,000 workplaces and initiated several
prosecutions for industrial safety violations. The Ministry
is also developing legislation that would extend the
provisions of the Industrial Safety and Health Act to illegal
foreign workers so that they can get the same legal
protection to which Korean workers are entitled.


21. (SBU) Working conditions for foreign workers are likely
to improve as the government continues to implement its new
permit system for foreign workers (Ref F, Ref G). Under the
new systems, permit holders may only work in certain
industries and have limited job mobility, but generally enjoy
the same rights and privileges, including the right to
organize, enjoyed by domestic workers. By August 2005,
14,800 workers had entered the country through the new
system.

OECD SCRUTINY OF ROK LABOR REFORM
--------------


22. (SBU) Since the ROK joined the OECD in 1996, the OECD's
Employment, Labor and Social Affairs Committee (ELSAC) has
monitored Korea's progress in light of commitments made by
the ROKG "to reform existing laws on industrial relations in
line with internationally-accepted standards, including those
concerning basic rights such as freedom of association and
collective bargaining." According to the OECD's 2005 review,
Korean authorities have taken a number of important steps to
meet their commitments, most of which were taken between 1996
and 2000. As of 2002, the OECD had concerns about the
following remaining issues: prohibition of multiple unions
at the enterprise level; denial of civil servants' right to
organize; prohibition in principle of employers' payment for
full-time trade officials; the broad definition of "essential
public services," where public servant actions were
restricted; prohibition for unemployed or dismissed workers
to become or remain trade union members; and the requirement
for notification of third parties to industrial disputes.
The OECD also reported that authorities were arresting trade
unionists for activities that would be considered legitimate
union activities in other OECD countries.


23. (SBU) In its 2005 review, the OECD noted the passage of
the public servants' law and the development of the roadmap
as "important developments." ELSAC commented that the
roadmap, if fully implemented, "would imply that Korea
reaches the desired international labor standards in most of
the items surveyed through the OECD's monitoring." The OECD
said that it had "no doubt of the political determination on
the part of the (Korean) government and the main political
parties to push through this reform agenda by the end of
2006."

COMMENT
--------------


24. (SBU) Organized labor has achieved tremendous progress
in securing worker rights and benefits over the past 20
years. Through the mid-1980s, the Korean government brutally
oppressed the labor movement. Now, as set forth above, the
ROK meets or nearly meets all the core labor standards, as
defined by the TPA. The OECD notes that passage of the
roadmap would likely bring the ROK substantially in line with
international labor standards. Ironically, it is organized
labor that is most critical of the roadmap (Ref B) and most
likely to interfere with the near-term achievement of this
milestone.
VERSHBOW