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South Korea president says labour reforms vital, urges unions to cooperate

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South Korean President Park Geun-hye on Tuesday called for a stronger push to revamp the country's rigid labour structure, urging the country's politically powerful trade unions not to stand in the way of reform.

[SEOUL] South Korean President Park Geun-hye on Tuesday called for a stronger push to revamp the country's rigid labour structure, urging the country's politically powerful trade unions not to stand in the way of reform.

Last month, Ms Park called for "major surgery" on Asia's fourth-largest economy, citing labour practices as a key area in need of sweeping reforms along with the public, education and financial services sectors.

The government wants to make wages more dependent on function and performance than seniority, make it easier to hire and fire workers, and to shorten working hours that are among the world's longest. It plans to submit amendments to labour laws for parliament's approval later this year.

South Korea has relatively low unemployment of around 3.5 per cent. But, there is a large wage divide between regular and temporary workers, and between those working in the big conglomerates that dominate the economy, and smaller companies.

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However, youth unemployment hit a 16-year high of 10.3 per cent in the first quarter, edging down to 9.9 per cent in the second quarter. "We are in a situation where failure to reform would be self-destructive," a presidential statement quoted Ms Park as saying during a regular cabinet meeting. "There is no future in our nation if our young people lose hope and give up dreaming," she said.

The country's five main business lobby groups issued a joint statement on Monday welcoming the government's push for labour reforms and vowing to cooperate with its economic revival efforts.

But unions are resisting proposals to revise labour legislation saying they are too harsh on workers and that any reform measures should be adopted after full discussion with labour and in exchange for more sacrifice from employers.

One of South Korea's two nationwide labour groups has boycotted reform negotiations with the government and business, while the other this week returned to the table with a list of conditions.

Unions represent just 10 per cent of workers in South Korea but are politically powerful. Labour-management relations are more harmonious than during the violence-prone 1980s.

Ms Park said unions should speak for the entire workforce. "The labour unions should not cling to the established interests of the 10 per cent, regular workers at large companies, but should turn their ears to the tearful appeal by the other 90 per cent - workers and job-seeking youths," Ms Park said.

REUTERS

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