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  • Title
    One Year After the Fixed-term Employment Act : Impact and Policy Direction
  • Date
    2009.02.02
  • Attach
  • * This paper was originally released in Korean in the 43rd issue of the Monthly Labor Review published by the Korea Labor Institute in July 2008.
    * Eun, Soo-mi, Research Fellow, Korea Labor Institute


    Ⅰ. Raising the Issue

    Around July 1, 2008, when the anti-discrimination corrective measures prescribed under the Act on Protection of Fixed-term and Part-time Employees became applicable to workplaces with 100 or more employees, the debate on the effectiveness of this fairly recent legislation kicked off in full force. The employers contend that the Act should be eased as it suppresses job creation and exacerbates the business environment. At the same time, the labor sector is calling for an overhaul on the grounds that the Act fails to protect non-standard workers and may even lead to massive layoffs. While both sides agree to revision, their intended directions are completely opposite from each other. By all means, it is tenuous to evaluate a legislation that has only been in existence for slightly over one year. But the analysis of the Supplementary Survey to the Economically Active Population Survey (Korea Labor Institute, 2008; Lee, Byung-hee & Jeong, Seong-mi, 2008) demonstrates the lack of statistical basis for the claim that the Act suppresses job creation. In all fairness, it should be stated that the Act did not generate massive layoffs or only negative consequences - it had both negative and positive effects. But given that there are visible conflicts involving non-standard workers, such as protracted disputes and unfair dismissals, it is highly necessary to assess the impact of the Fixed-term Employment Act and seek ways for further improvement. And with less than one year to go (July 1, 2009) until the corrective measures are applied to workplaces with less than 100 employees, who employ 86% of all non-standard workers, it should be noted that many of these workplaces would find it a challenge to shoulder the costs for such corrective actions or conversion to standard workers. Thus, it is important to seek appropriate support programs for them. This paper evaluates the impact of the Fixed-term Employment Act based on the following questions, and proposes a way forward in terms of policy response. First, is the Act merely a case of bad legislation, one that only reduces job creation? Second, is the Act a piece of bad legislation that exacerbates non-standard workers wage and working conditions and triggers massive layoffs? Third, why are there unending disputes involving non-standard workers? Fourth, what are the elements that give rise to negative views of the Act? Fifth, how can it be made better?