© YONHAP News

The government’s plan to extend the flexible work hour system is emerging as a key point of contention, as policymakers move forward in an effort to ease the adoption of a 52-hour workweek imposed in July. With labor unions strongly opposed to the move, however, conflict over the revision of the system only intensifies. 

Choi Bae-geun(최배근), economics professor at Konkuk University, examines the controversy surrounding the extension of the flexible work hour system. 

As we can surmise from the name of the system, employers can add or reduce the working hours of employees when necessary and remain within the legal workweek limit. 

Under the current flexible work hour system, companies may increase working hours during busy periods and cut back when there is less work, as long as employees keep their working time under an average 52 hours a week. Such flexibility is allowed for up to three months. Reflecting complaints from businesses, however, the government plans to extend the time limit to six months or one year.

As Professor Choi explained, regulations in their current form allow employees to work more in busier weeks or months and work less in off-peak seasons so long as the average does not exceed 52 hours in a week. 

In accordance with a revision to Korea’s Labor Standards Act, public and private companies with 300 or more employees started to cut their maximum weekly working hours from 68 to 52 on July 1. But the new labor policy soon faced criticism that it failed to properly reflect the reality of some industries that require greater work volume. As a supplement policy, the flexible work hour system was introduced. 

The main point of contention is the time frame of the system. Currently, flextime is restricted to between two weeks and three months. But some companies say that three months is just too short and have asked for greater flexibility.

Many firms in Korea depend on low-wage employees who work long hours. Such firms characterize the shorter workweek system and the three-month limit as constraining their competitiveness, adding they may even have to close their business. 

Also, some companies require sustained periods of heavy work followed by relatively slower periods. These businesses say that different industry standards should be taken into consideration when implementing the flexible work hour system. 

Some companies are calling for extending the time period of the system to counter what they believe to be weakening industrial competitiveness caused by a 52-hour maximum workweek. Indeed, several key economic indicators, including job numbers, have been quite discouraging. Reflecting these concerns and the reality of the Korean economy at present, policymakers agreed on November 5 to extend the flexible work arrangement system within the year. But the decision is drawing a strong backlash from the labor community. 

Under the current system, those whose working hours exceed 52 per week over a three month timeframe are entitled to extra overtime pay. But if the three-month ceiling is extended to one year, for instance, employers are exempt from providing overtime pay as long as weekly average working hours stay at or below 52 over the course of a year. 

This would mean a decrease in wages for workers despite their extra effort in the hopes of overtime compensation. 

The Korean Confederation of Trade Unions estimates that the extended work hour system may result in a 7 percent decrease in income. The organization is also concerned about workers’ health when forced to deal with a heavier workload.

Labor unions argue that the extension of the flexible working scheme will normalize longer hours of work without overtime pay and possibly lead to deterioration in workers’ health. This runs counter to the reasons behind the 52-hour workweek, which include limiting overwork and on-the-job accidents as well creating time for personal growth and friends and family.

As the business and labor communities are in clear disagreement over this issue, it may be worthwhile to see how other countries have implemented similar systems.

The German case deserves attention. German employees have working time accounts, just like bank accounts. When they work overtime, the time is saved on their accounts. The saved time can be rewarded with paid vacation or monetary compensation later. 

I don’t think it is desirable for the government to apply the flexible work hour system to companies too strictly. 

Rather, labor and management could reach an agreement on their own flexible management of work hours and the appropriate level of compensation for overwork because employees, like employers, also recognize the need for work more during busy times.

In addition to the German case Professor Choi just explained, workers in the U.K. must not exceed an average of 48 hours a week over a seventeen week period. But exceptions can be made under a labor-management agreement. In France, the flexible work hour system can be extended to a maximum of one year through a collective agreement, but average working hours over a twelve week period should not exceed 46. 

These countries set a certain limit on longer working hours while fully implementing labor-management agreements. For Korea, it is necessary to learn from these cases and reduce the side effects of extending the flexible work hour system.

The key is to provide proper compensation to employees when they work overtime. In many cases, laborers themselves want to work more. They could be allowed to choose the hours they prefer to work, under an agreement between labor and management. But again, they should be paid overtime, either in the form of paid leave or money. Labor and management can surely reach a compromise on this point.

An advisory council was launched on November 22 with the purpose of seeking dialogue in economic, social and labor affairs. Major discussion topics of the multilateral council include the flexible work hour system and stimulating job growth across several industries. We’ll have to wait and see what new measures are crafted and if they will have the intended positive effects on the economy.