© YONHAP News

Under the current flexible work hour system, businesses may increase working hours during busy periods and cut back when things are slower, so long as employees do not exceed an average of 52 hours per week within a certain period. Representatives from labor unions and the private sector have recently agreed to extend that period.

The agreement was a positive outcome produced by a presidential council launched last November to seek dialogue in economic, social and labor affairs. Today, we’ll discuss potential changes from the extension of the flexible work hour system with economic commentator Chung Chul-jin.

The 52-hour workweek policy went into effect in July last year. Under the system, the government cut maximum weekly working hours to 40, plus 12 hours overtime. Following a grace period, the 52-hour workweek cap was to be fully implemented across all sectors and firms this year.

But it turned out that Korea was not fully prepared for the shortened workweek. While employers complained of rising labor costs, employees who wanted to work longer hours to earn more money were unhappy. To cope with potential problems caused by the 52-hour workweek, the flexible work hour system was introduced as an alternative.

The flexible work hour system emerged as a supplementary policy to reduce possible ill effects of a 52-hour maximum workweek. The business community argued that a three month timeframe is just too short, and asked the government to extend it. Labor unions, on the other hand, were opposed to the extension, arguing that companies might exploit the system by increasing work hours on their own authority so workers may face lower incomes and increased health hazards.

To narrow the gap between these two sides, an advisory council called the Economic, Social and Labor Council was established in November of last year. After nine rounds of grueling negotiations, the multilateral council finally agreed on February 19 to extend the maximum period of applying flexible working hours to six months from the current three.

Companies insisted that the period be extended to one year, but they eventually agreed on the six-month expansion. In regards to income and health concerns, the labor community set some preconditions, including a mandatory 11-hour rest period for overworked employees.

For instance, if a person works overtime until, say, midnight, he or she needs to take a break until 11 a.m. the next day. As the three-month ceiling has been extended to six months now, employers are exempt from providing overtime pay as long as weekly average working hours stay at or below 52 over the course of six months. So, workers may face a dip in income, despite their hard work in hopes of overtime pay. However, the recent agreement does call for establishing a proper device to prevent workers from overworking and wages from falling.

The new agreement reflects concerns from both business and labor. In the revised system, companies can maintain a period of heavy work for up to six months. If the period exceeds three months, companies may schedule working hours every week, not on a daily basis.

In addition, the agreement has provisions to help prevent the misuse of the flexible work hour system. For example, in an effort to protect workers’ health, employees have to rest for 11 consecutive hours between working days.

Employers must come up with measures to preserve wages and report those measures to the Labor Ministry. If not, they will be subject to financial penalties. Mr. Chung now talks about the significance of the recent agreement.

Different interest groups have often held negotiations to reach a compromise, but rarely are substantial results achieved. Significantly, the presidential council has managed to strike a deal, a rare and notable example of promoting dialogue and compromise among different groups. The agreement will hopefully serve as a model for resolving other controversial issues, including the reform of the national pension system, through a social consensus.

The agreement may serve as a sort of touchstone to resolve social conflict over various contentious issues, such as uneasy labor-management relations. After tireless negotiations across several rounds, each side was able to extract concessions from the other, reaching a dramatic compromise in the very last-minute. However, the agreement is not without limitations.

The labor community says the six-month expansion may lead to an undesirable situation that working hours can be extended to more than 60 hours a week for three consecutive months, exceeding Korea’s overtime standards. This runs counter to the very reasons behind the 52-hour workweek, which include limiting overwork.

Also, although companies are required to provide measures to preserve wages, the measures may end up being too vague as the government cannot meddle in every detail of business operations.

Under the agreement, companies may extend working hours to 64 hours a week for three consecutive months. This raises concerns about workers’ health when forced to deal with a heavier workload. There are also questions about the ability or willingness of companies to craft a feasible plan to preserve workers’ wages.

The 52-hour workweek was initially scheduled to go in to effect from January this year following a six-month grace period, but the government extended the effective date to March 31. 

It appears far from certain that the regulation will go into effect next month, however, as ruling and opposition parties have different perspectives of the flexible work hour system. Worse yet, bitter partisan conflict has crippled the National Assembly. 

But what’s most important is that the extension of the flexible work hour system should not deviate from the foundational idea of establishing a 52-hour maximum work week.

The flexible work hour system has become such a big issue that it seems to be obscuring the original intent behind the 52-hour workweek. The shorter workweek was introduced in order to improve the nation’s extremely harsh labor environment and create time for family and personal growth. But now, more focus is being paid to its alternative, that is, the flexible work hour system.

At a time when the economy is slowing down and the society is not yet ready for drastic change, the flexible work hour system is aimed at a soft landing of the 52-hour workweek by better reflecting the reality of some industries that require greater work volume. But we should bear in mind that the ultimate goal of the policy is to improve working conditions and quality of life for the people.

Korea has the second-longest average working hours in the Organization for Economic Cooperation and Development’s work-hour rankings, at 2,052 hours a year. Korea decided to enforce a shortened workweek with the hopes of normalizing better work-life balance for the people. 

It is hoped that the recent agreement on the extension of the flexible work hour system will achieve this goal.