[New Year’s Address] Kyungshik Sohn: "2026, Golden Time for Korea’s Economic Transformation... Labor Regulations Must Be Addressed First"

New Year’s Address by Chairman of the Korea Employers Federation
Emphasizes the Need for a Management Environment to Boost Corporate Vitality
“Korean Entrepreneurship Will Lead Economic Leap Forward in 2026”

Kyungshik Sohn, Chairman of the Korea Employers Federation, stated in his New Year’s address on December 29 that “2026 must become the first year in which the Korean economy overcomes crisis and achieves a grand transformation and a new leap forward.” He emphasized that eliminating labor market regulations must come first, underscoring the need to create a dynamic management environment that can boost corporate vitality.

Marking the arrival of the Year of Byeongo (Byeongonyeon), Chairman Sohn designated 2026 as the “golden time for a national transformation” and called for accelerating structural reforms. He said, “As AI technology brings rapid changes across industrial structures, countries around the world are racing to introduce support measures for their domestic companies to secure advanced technologies,” and stressed, “It is essential for us as well to establish a dynamic management environment that can encourage innovation and a spirit of challenge among our companies.”

To this end, Chairman Sohn identified the elimination of rigid labor market regulations as the top priority. He stated, “We must make working hour regulations more flexible in line with changes in industrial structures, and in advanced industry R&D sectors, create a performance-oriented work environment.” He also pointed out, “The wage system should shift from a seniority-based model to one focused on job roles and performance.” He added, “Enhancing labor market flexibility can help resolve conflicts between extending the retirement age and providing jobs for young people.”

Kyunghwan Sohn, Chairman of the Korea Employers Federation. Photo provided by the Korea Employers Federation

He also highlighted the need to modernize labor-management relations. Chairman Sohn said, “Our labor-management relations, which are rated among the lowest in the world, are an obstacle to national competitiveness,” and insisted, “Labor and management must abide by laws and principles and engage in dialogue and compromise.” He further argued, “We must address the reality that companies have fewer means to respond compared to the powers of labor unions, and guarantee a reasonable right to countermeasures at a level comparable to competing countries.”

Regarding the amendment to the Trade Union Act, scheduled to take effect in March, he expressed concerns about potential confusion in the industrial field. He said, “Companies are greatly concerned about the legal ambiguity of the amendment, which expands the scope of employers and the definition of labor disputes,” and requested, “The government and the National Assembly should sufficiently reflect the voices of companies and prepare supplementary measures.”

Additionally, Chairman Sohn urged a shift in economic policy to boost corporate vitality. He stated, “Unnecessary regulations must be boldly removed so that investment and innovation can flourish in advanced sectors such as AI, semiconductors, and robotics.” He added, “Corporate tax and inheritance tax should also be improved to the level of competing countries and operated from the perspective of strengthening national competitiveness.”

In conclusion, Chairman Sohn mentioned the resilience of the Korean economy, which has overcome numerous crises, and emphasized, “Entrepreneurship will lead the Korean economy to a new leap forward in 2026 as well.” He continued, “The Korea Employers Federation will do its utmost to create a management environment where companies can focus on investment and employment, ensure stable labor-management relations, and promote social dialogue.”