Economic Sector Issues Joint Statement Urging Suspension of Mandatory Legislation on Labor Directors in Public Institutions

Joint Economic Sector Position on the Amendment of the Act on the Operation of Public Institutions for the Introduction of the Labor Director System

[Asia Economy Reporter Kim Hyewon] As the National Assembly pushes for legislation mandating the introduction of the labor director system in public institutions, the business community has called for a halt to the legislative process.

The Korea Employers Federation, Korea Chamber of Commerce and Industry, Korea Federation of Small and Medium Business, and Korea Federation of Medium-sized Enterprises issued a joint statement on the 25th during the National Assembly's Planning and Finance Committee's Economic and Fiscal Subcommittee, expressing concerns over the proposed amendment to the "Act on the Management of Public Institutions" that mandates the introduction of the labor director system in public institutions, and requested the suspension of the legislative process.

These organizations stated, "Considering the confrontational labor-management relations in our country, if the labor director system is mandated in public institutions, the board of directors, which is the highest decision-making body in management, is highly likely to be transformed into a site of labor-management negotiations and conflicts," adding, "Ultimately, the side effects will be passed on as a burden to our citizens."

They also warned, "The labor director system in public institutions may not increase operational transparency but could instead encourage reckless management and moral hazard," and "It is clear that the labor director system in public institutions will eventually act as pressure for the introduction of the labor director system in private companies, and the labor sector is already openly advocating for the application of the labor director system not only to public institutions but also to private companies."

Furthermore, they diagnosed, "Ultimately, the labor director system will further deepen the imbalance of power between labor and management, which has already tilted toward labor following recent amendments to the Labor Union Act," and "It is highly likely to act as a major source of instability that hinders investment and employment expansion."

These organizations emphasized, "Legislation such as the labor director system, which does not fit the reality of our country and has significant impacts on our society, should not be hastily processed without sufficient review of side effects or national consensus during the legislative process," and urged, "We hope the National Assembly will fully consider these points and listen to the business community's request, which is doing its best to overcome the economic and employment crisis caused by COVID-19, and suspend the legislative process."