News & Statements

COVID-19 Crisis: KPTU Statement on New Stability Measures announced 22 April


Measures announced by the 5th Emergency Meeting on the Economy are not enough to address the employment crisis

- The many blind spots in the government's employment and business stability measures raise questions as to whether they will be effective.
- The lack of consultation with the KCTU and its affiliates is likely to be a continued problem. KPTU calls for real social dialogue.

On 22 April, the President's 5th Emergency Meeting on the Economy agreed to "measures for employment and business stablisation to overcome the jobs crisis." Given the many limitations of existing policies, KPTU has been demanding improvements together with KCTU. Some of these demands were reflected, but the new measures are still not sufficient to be called the 'extraordinary measures' the government has promised.

First, the labour movement has continued to demand a moratorium on dismissals and other employment security measures. It is true that the government has strengthened conditions to maintain employment placed on companies receiving financial support. It also plans to add conditions to address corporate immorality and require that profits are shared with the public upon normalisation of business. This is because if support for businesses does not lead to the maintenance of employment, it simply means placing all the burden on workers while only bailing out business owners. The government's policy must be strengthend further and develop in a direction that enables the public and workers to participate in the management of companies that receive support. Nationalisation of essential key industries should also be considered.

Unfortunately, it is unclear whether the policy the government announced today will actually be effective in employment retention. Given the low level of support, small and medium-size businesses already in the process of adjusting workforce levels still prefer layoffs. Large corporation have relatively more capacity to maintain employment. It is subcontractors that are the problem. For this reason KCTU has demanded that requirements for maintenance of employment should apply to a company's subcontractors as well, but such conditions were not included. In addition, unless a prohibition on dismissals is first enacted before companies receive financial support there will continue to be employers who do not apply and go forward with layoffs.

In particular, there is the issue of temporary agency or labour suppy subcontractors whose main source of profits come from taking part of the labour costs paid by lead companies. In regards to thse companies, the announcement of a new system of employment retention loans, which will allow these companies to receive funds in advance is meaningful. But the problem remains that there is still the possibility that these companies will simply not apply and choose to dismiss employees instead. For this reason a moratorium on dismissals applying to these companies is important. And in the case that employers fail to apply, there there must be a procedure for workers to apply for and receive employment retention support directly, rather than through their employers.

In the cases of specially-employed (dependent self-employed/misclassified) and freelance workers, the fact that employment stability support has been increased is positive, but the total amount is still low, the applicability norrow, and conditions for applying too strict. The implementation of local support measures has already shown that there are many workers for whom it is hard to demonstrate income and loss in profits due to the way in which they are contracted. It is up to the government to uncover the problems in the existing measures and resolve them so all these workers can receive the support they need.

In addition, social service workers such as caregivers for the elderly and disabled are still without support. These workers have faced a dramatic loss in income because they cannot be matched with care receivers, but they have not been dismissed so cannot qualify for unemployment insurance or employment retention support. Because they pay into unemployment insurance they do not qualify for the support for specially-employed and freelance workers. Most are low-wage women workers.

While employment is currently the most urgent task, guaranteeing a minimum wage level for low-wage workers is also important. The government's measures include support for labour costs for companies that sign agreements on employment employment retention. But the condition of this support also requires s to accept a loss in wages. There are some workplaces where this will be necessary. Such requirements should not be made uniformly, however, as it means that workers already receiving near the minimum could be forced to work for less than minimum wage. Minimum wage workers should not be asked to accept a wage cut as a condition for maintaining their jobs.

KPTU welcomes the fact that groundhandling and duty free stores have now been included in the list of 'special employment support sectors' along with air transport. Layoffs are occuring at an explosive rate in groundhandling where the majority of workers are employed precariously through subcontracting companies. But still more must be done. Subcontracting companies like KO (Asiana baggage and cabin cleaning) and EK manpower (Korean Air cabin cleaning) have announced redundency plans. These workers are falling through the holes in the government's policies. The local labour department must step forward to stop these layoffs and carry out monitoring and enforcement.

In addition the fact that the governmet did not announce designation of the Yongjong (Incheon Jung-gu) region as an employment emergency zone is highly regrettable. Many industries related to aviation are concentrated in this area and all are in crisis. The local economy has already collapsed and workers who have lost their jobs are leaving, putting further pressure on service establishments and self-employed businesses in the area. It is hard to understand the govenrment's reticence to implement a regional policy.

Finally, KPTU welcomes the measures annouced to create public sector jobs and jobs for youth people. Unfortunately, most of the jobs to be created are temporary, making the policy insufficient. Despite wide public agreement that public healthcare facilities and staffing levels should be increased such measures were not included. An increase in public servants specialising in social welfare is also needed to ensure the delivery of support programmes. KPTU recognises that given the severity of the current situation it is necessary to create even temporary jobs. However a system needs to be put in place to assertain were permanent jobs are needed and can be created.

We consided the measures coming out of the 5th Emergency Meeting on the Economy to be only initial measures announed due to the urgency of the situation. Clearly, they must not be the end. Of course holes will appear in the implementation of all policies. In addition to the deficiencies pointed out, others will become clear in the policy rollout. To address these problems and develop further policies the government must engage in the labour-goverment consultations and social dialogue that KCTU and KPTU have been demanding.