South Korea’s newly formed integrated special municipalities – encompassing areas like Daegu-Gyeongbuk, Daejeon-Chungnam, and Gwangju-Jeolla – are poised to offer foreign-invested enterprises exemptions from standard labor laws, including provisions for paid public holidays. The change, embedded within legislation establishing the municipalities, has drawn criticism from labor advocates who allege it represents a circumvention of existing worker protections.
The core of the controversy lies within Article 215 of the special municipality legislation, which explicitly excludes foreign-invested companies operating within these regions from the stipulations of Article 12 of the Employment Promotion Act concerning employer obligations to develop efforts to hire older workers. Companies located in economic free zones within the municipalities will be permitted to convert legally mandated paid public holidays into unpaid days off, subject to approval by the Economic Free Zone Committee. The legislation also contemplates expanding the permissible duration and scope of temporary worker dispatch arrangements.
The move to weaken labor protections for foreign-invested firms is ostensibly aimed at attracting investment and stimulating economic growth within the newly consolidated regions. However, critics argue that it creates a two-tiered labor system, effectively establishing “labor law-free zones” where worker rights are diminished. Participatory Solidarity, a labor advocacy group, has characterized the legislation as a “scheme to evade labor laws.”
The exemptions extend beyond holiday pay. The legislation also removes requirements for these companies to actively promote the employment of older workers, a provision enshrined in the Employment Promotion Act. While the legislation allows municipalities to offer employment subsidies to foreign-invested companies that *do* hire older workers, This represents presented as a discretionary incentive rather than a legal obligation.
The legal definition of “older workers” in South Korea is defined as those aged 55 or older, while “pre-older workers” are those between 50 and 55, according to the Employment Promotion Act. The government, as outlined in the Act, bears responsibility for eliminating age-based discrimination in employment and fostering an environment that promotes the hiring and job security of older workers. However, the new legislation carves out an exception for foreign-invested firms within the integrated special municipalities.
The National Assembly passed the special legislation for the Jeolla-Gwangju integrated special municipality on February 24th. Similar provisions were included in the legislation for the Daegu-Gyeongbuk and Daejeon-Chungnam regions. The legislation now awaits implementation by the respective municipal governments.
